Posts Tagged ‘Fat J Records’

MySpace vs. iTunes

Friday, April 4th, 2008

My most recent article for The Industry Standard just went up – How MySpace Music could beat iTunes. If you’re interested, please give it a read!

The music industry is something that I’m really thinking about lately with the launch of Fat J Records and signing Cara Austin – so the recent news about iTunes overtaking Wal-Mart and MySpace Music’s launch are both of great interest to me. And there are a lot of things about the MySpace vs. iTunes topic that I didn’t have space to include in my article for The Standard. So I thought I would just list them here, kind-of stream-of-thought.

MySpace logoMySpace Music can beat iTunes by supporting musicians. This is the premise of the article that I wrote for The Standard. Basically, I think that if MySpace Music provides data about the fans that purchase music, ticket and merchandise to the musicians, it can beat iTunes. Go read the article for the whole argument.

CDBaby is a model of how MySpace Music could work. CDBaby is an unbelievable music retailer that caters only to independent artists. And this is what its privacy policy says (these points are directed at buyers who visit the site):

“Only the musician whose music you buy will know who you are. If you don’t even want the musician to know about you, just say so at the bottom of your order form.”

I use CDBaby to sell CDs for Cara Austin, and so far, NOT ONE person has requested that CDBaby withhold their contact information. This is because people who go so far as to buy a CD are usually fans – and they don’t mind the band or artist being able to contact them again in the future.  According to the company’s Website, CDBaby has sold 4,202,465 CDs to customers resulting in $71,482,212 paid directly to the artists.

iTunes is a store, MySpace is a community. I read this quote from someone involved in the deal, and this is a really important point. While there are millions of people who buy music from iTunes, the MySpace community that uses MySpace to discover new artists and read about what they are up to, will be a powerful environment for making a purchase. With the possibility of revenue coming from MySpace, artists will do even more to make sure that their pages are attractive, interesting and compelling. And the community of music on that site is going to get stronger and stronger. Imagine 5 million musicians adding content, video, new songs and new song versions – this is going to be incredibly powerful and impossible for iTunes to rival.

Facebook’s chance to win in this space is shrinking by the minute. Facebook is gaining on MySpace in the social networking space, but Facebook’s support of music is, well, pathetic. They are going to have one shot to try to release a music platform that users will like (and use) but it’s not looking good. With MySpace’s announcement of the support of three of the four major labels, one possibility is that Facebook already has the support of the fourth (but that is highly unlikely and just speculative on my part).

International will be huge. I read that MySpace Music isn’t going to be able to distribute music internationally yet. What? What is the licensing issue with that? My suggestion – sign up all the indies asap and start selling to Japan, England, Australia, and everywhere else that has an appetite for U.S. music immediately – or else that could be a place that MySpace Music will be vulnerable.

DRM free matters, but won’t be the thing that wins it for MySpace. As part of the announcement, MySpace announced that they music that is sold from its music store will be DRM-free. (DRM=Digital Rights Management, it is the protection that Apple places on its files that prevents people from being able to share them.) This is a big deal, but not the biggest, as this will just (finally) compel Apple to follow suit with iTunes.

There is still a perception issue that could cause MySpace some serious problems. MySpace has kind of a seedy image. The site’s design is fairly unattractive, and it’s hard to navigate the social network without running into something that borders on pornography or spam. The company is going to have to do battle against that perception to win back people who have become disillusioned by previous negative experiences with MySpace.

Can Apple prevent iPods from using this service? Technically, I’m not sure if there is a way for Apple to limit the sites from which the iPod can download music, but if users are unable to load music from MySpace Music to their iPods, that would be a serious setback to MySpace. It also would likely cause a revolt among iPod users against Apple, but it would still be a hiccup in the acceptance of the service.

I'm launching a record label

Tuesday, April 1st, 2008

Anyone who has read this blog for any length of time knows that my company Pure Incubation is working on starting lots of companies. You probably also know that when I get to announce the launch of one of them, I am really excited (and usually a bit relieved!)

Fat J Records logoToday I get to announce that my latest project is launching: Fat J Records.

I’ve been working on getting this independent record label off the ground for awhile, but I feel like it’s finally official because I’ve signed my first artist: Cara Austin.

Check out her site here: www.caraaustin.com.

I’ve mentioned Cara Austin here before – because I really like her music – but now I am more than just a fan, I’m her label.

To be honest, I’m still figuring out all the kinks with what’s involved with owning and running a record label. The idea to even start this type of business came from a post that I wrote earlier this year about the music industry and the things that are changing with the way that music is sold and promoted because of the Internet. That post is here if you want to give it a read.

The bottom line about the online music business is that no one has it just right yet, so I figured that I might as well jump in now when all the fun stuff is happening.

One thing that I know for sure is that the Internet is changing the fan/artist relationship, and with that in mind, Cara Austin’s blog has launched on Tumblr. I think that the Tumblr microblogging platform might be just perfect for an artist blog that will likely include a lot of pictures, quotes, and short bits and links, as well as video and audio clips. I’m going to be the primary writer of the blog, and I won’t only be posting about Cara Austin and her musical career, but also about our adventures in exploring the online music industry – so feel free to give a read or follow us there.

Second, I don’t think that the online music business models are going to be figured out by one small independent label working alone. So with this post, I invite all of you to get involved. Do you have ideas about what needs to happen to change the music industry? Why don’t you post them here. Are you an independent record label yourself, or an Internet business that is making the best use of the new music models that are emerging? Let’s work together. Send me an email and let’s see if and how we can collaborate.

The launch of a business is always exciting. But today is particularly thrilling for me as the music industry is all new for me. It’s seems sure to be a wild ride.