The talk of a broadband music tax is quite old, at least here in Europe.  It goes back to the Fall of 2006.

As I mentioned back then, it also isn’t a new thing.  Many of us already pay something akin to a music tax in the form of a “rights tax” on reproduction media such as blank cassettes and blank CDs.  There isn’t any difference between a blank CD and a blank Flash drive–both store data.

I think the discussion should be about

• standardising the rules (eg, should all blank media have a rights tax?). [NB: I'm ok if the answer is that there is no rights tax on any blank media]
• discussing how this tax would go to *artists* (instead of the bureaucratic music companies and opaque rights collecting agencies that keep the money for years and, when they finally distribute the money, have allocation rules that are biased towards “mega acts”).

I want quality music to persist.  I want to pay for it.  I just want it to be fairly priced (eg, how ridiculous is it that a a legal download has the same cost as a physical single) and fairly distributed (eg, to the hands of musicians).

What I don’t like about this debate is that the music labels are leading it.  After all, in their dying days the are surely just trying to protect their interests and not those of the artists, those of the music.

The discussion of a music tax should be used to open the debate on how to build a new music industry, not protect the old one; one where the (smaller) artists have a lot more rights and keep more of the revenues.

All the blogs I follow, once in a while, take a reflective step back to comment about blogging or the blogosphere. Here I am doing the same.

This week I had a great discussion with a technology company about the merits of starting a blog for their CEO or a collective blog for the executive team.

We had the classic traditional marketing (control) vs. new marketing (no control) debate. Points discussed included the risk of sending the wrong message; exposure to litigation; discomfort with the fact that, upfront, we wouldn’t know who the readers are; concern about being sucked into a slanderous debate; risk of hacking.

I suggested the following three criteria to decide whether to do it or not:

1. The company accepts that the blog must be from the individual(s)-that it’s not a company blog.

2. The individual(s) is passionate about discussing industry trends

3. The individual(s) will share and discuss their thoughts (aka blog) on their own accord-have the time; wouldn’t need much prodding; would not be expecting to have entries written by ghost writers.

NB: I was asked how many of the top senior executive blogs where ghost written. Without fear of sounding naive, I said I didn’t think any of them were ghost written.

We concluded that, at this time, blogging wasn’t right for the company.

To support the conversation I pulled together some manifestos, pros, cons and ROI frameworks from the likes of Scoble, Seth Godin and Hugh MacLeod which I thought others might find useful. It’s all in a Google Notebook that I made public.

Clue Score = How well an industry has embraced the potential of the Internet.
- Press (newspapers and magazines) A+
- Movie (Hollywood) B
- TV (broadcaster) B-
- Radio C
- Music F

I have been helping media companies think through and execute their media strategies since 1998.

This month I began work on a detailed 8-year forecast of the global market for recorded music. The hardest factor to predict (and I am still struggling with it) is the contribution of digital sales. All the research firms’, consultancies; and music companies’ estimates I have seen say ‘yes’ – they have global music sales recovering as early as 2007 with sales anywhere between 2010 and 2012 exceeding 2006 values.

I began my analyses with this same hypothesis. Alas I am coming to the conclusion it won’t happen. The reason is that the music industry have resisted embracing potential of the Internet.

Music has been visibly online since 1998 when eMusic launched. We are at the end of 2007 and all the music industry has managed to do little. They focussed on minimising the down-side of the Internet (ie, illegal file sharing) instead of maximising the upside (eg, greater ease of sampling and buying, selling back catalogue). Today they are wrestling with iTunes, DRM and, because of market failures, illegal file sharing.  It’s not evident how they can remedy things in the short term.

It made me think that, compared with all the media industries I’d worked with, the music industry has done the least necessary to profit from the Internet.

The press has tried hard. They were quick to put their content online. It took them a while to learn to publish for the web, but most figured out. Of course some titles gave too much away (eg, TIME to AOL) but that’s down to execution. My point is that just about every publisher quickly develop some sort of “web strategy”. They weren’t in denial. Some publishers even bought dotcoms in classified and local directories. Many have embraced blogs. And, recently, some titles are beginning to develop social networks. I give them an ‘A+’.

The movie industry realized early on that they’d be in the same hot water the music business was in unless they did something about it. Viant (my favourite work place) was working with movie studios as far back as 1999 to develop Internet business models. Today there are a variety of ways that you can buy movies — not all ideal but proof that they are experimenting. And, they sure know how to use the web to market their fare. That’s a ‘B+’ in my view (I’d give them a A- if they weren’t still enamoured to DRM).

TV has been a bit of a sleeper but has moved fast this year. Broadcasters used the web to put out loads of program information and, generally, did that well. They even offered show-related chat rooms and forums. And, this year, all the US broadcasters developed broadband portals built around their real asset: video. That earns them a ‘B-’.

Radio has been ignoring the Internet. Stations have little to show other than streaming shows and creating email addresses for their DJs. Most stations, until recently, have been dissing podcasting. I give them a ‘C’ because they were quick to offer streaming but have done nothing of note since.

Brands shouldn’t ask customers what they want.

One of the worst things I can do is ask my wife what she wants – whether it’s an innocuous question about what we should have for dinner or a request for a hint as to what she might consider a good Christmas present. I have been, repeatedly, told that if I had paid better attention to her I’d know exactly what she wants.

Customers think like my wife. Few are willing to answer street questionnaires, take calls at home; fill online questionnaires or participate in focus groups – unless they are paid.

And yet, companies keep insisting. They rather ask than listen. If companies really cared about the customers they should know what they want!

Everyday, all day long, customers are expressing what they want and what they’d like to have improved. All it takes is listening and observation: see how happy the customer is by the time they get to the front of the queue to pay; how much time they spend with the product; how wide they smile then consuming it.

Social media (social networks, blogs, et al.) provides ample opportunities for companies to listen to what customers are saying about their products and services; uninhibited and unaffected by facilitators and stimulus material.

A friend of mine at a leading consumer goods company told me that a sweeping review of blogs, forums and notice boards led to the surprising knowledge that one of their soap bars was used for onanistic practices. My friend dismissed it as an indication of the folly of a few. To make a point I pushed back and suggested they should have launched a bar specially designed for these people’s interests. I argued that, of all the product extensions the consumer goods company had launched over the years, this was one which, at least, had a proven market.

On a similar note, Coke famously chose not to listen to customers, over the summer, as a wave of videos showing Diet Coke bottles spouting geysers when mixed with Mentos began to appear on YouTube (today there are over 6,040 videos with the top 25 having registered over 15.5 million views) and other video sharing sites. At the peak of the craze, Coke’s response was to say “we want people to drink our soda, not play with it.” Mentos on the other hand, embraced it. Belatedly, in October, Coke commissioned the EepyBird Guys, the producers of the most spectacular Coke/Mentos videos, and announced a competition. Alas, they have only attracted 5 entries so far. Read B.L. Ochman’s blog for an analyses of this fiasco.

Listen, participate.

Should the EU raise a “music tax” to be paid by broadband and mobile phone users to compensate music labels (akin to the TV license paid in many European countries)?

Earlier in the month, The Register published an article titled “Big labels are f*cked, and DRM is dead — Peter Jenner” .

Peter Jenner is a music industry old-timer (who was Pink Floyd’s first manager and has also looked after T.Rex and The Clash among others), and is Secretary General of the International Music Managers Forum. His voice is as authoritative as it’s brash.

Jenner says the major music labels “raped their whole business model” to cover profit shortfalls and haven’t got the “got the time or energy” to think about the future of their business.

His analysis of the current situation is accurate:
- “digital music pricing has been a scam where the consumer pays for manufacturing, distribution, and does all the work”;
- “DRM, pay-per-download, and per-device restrictions force users to pay multiple times for a single song”.
(which, taken together, in my view, provide individuals an incentive to seek pirated music)

I also suggest that the RIAA (US), MCPS-PRS (UK) and other national rights bodies are shooting themselves in the foot. By punishing new bona-fide Internet-based business models that promote music with over-bearing the regulations and fees common to traditional media (TV, radio, etc.) they are preventing the emergence of legal alternatives and, in the process, helping the illegal outfits flourish.

Jenner’s recommendation is for EU countries to introduce a blanket broadband license of about €4/month to compensate music companies in exchange of them abandoning DRM and them accepting greater pricing regulation.

There hasn’t been enough debate as this recommendation warrants. The clearest thinking has come from Micheal Arrington of TechCrunch who was highly critical.

I think the idea of a broadband fee is quite sensible.

Competition is unlikely to create an environment without DRM and excessive pricing.
- iTunes controls more than 70% of the music download market and is unlikely to soon loose it’s strangle-hold on the market (over 70% of new US cars have iPod docks and six airlines are now talking about supporting it too).
- Microsoft’s has just introduced a new DRM, instead of the one it already had, for it’s new Zune MP3 player.
- Mobile operators are closed networks where there is no competition for like services.

This tax wouldn’t elimate innovation. Music labels would still compete for a larger share of the broadband license. And, anyway, it is already a tried and tested concept. Many countries (eg, Canada, Holland, Germany) charge a “rights tax” on reproduction media such as blank cassettes and blank CDs. This tax would be no different.

Germany and Sweden have already introduced similar taxes to pay for their public broadcasters.

The danger is that other rights holders would demand a similar tax. Movie studios? Book publishers? Phtographers? In the process they might over-tax individuals to the point of slowing down broadband penetration.

CBS Corporation’s President and CEO, Leslie Moonves, highlighted his company’s commitment to develop digital revenues during the Q3 earnings call.

“I want to talk about our efforts in the digital space. New media is a huge opportunity that cuts across all of our businesses and affects everything we do as a premier content company. You guys are always asking us when we’re going to start making money here. While it is still too soon to quantify the impact, I can tell you we expect to generate hundreds of millions in digital revenues in ‘07. We made a number of very significant moves over the quarter to extend the reach of our television programming online.

In October we partnered with YouTube to begin offering short form video streams that include content from the CBS Television Network, Showtime, and CSTV. Meanwhile as I mentioned earlier, we continue to find new platforms to stream our hit content. We’re already offering many of our shows on Google Video, Apple iTunes, Amazon.com, and AOL. Plus we began offering free next-day streaming of 12 primetime series on Innertube, our own entertainment website. We have streamed more than 2 million episodes of our show so far this season and over 3 million related videos. These numbers continue to grow week over week.

[...]Meanwhile, DVR and Internet streaming are only adding viewers. New technologies and platforms make it easy for people to enjoy both programs that air during these highly competitive time periods. We are already getting paid for this incremental viewing on the Internet, and we expect to get paid for DVR viewing next year. “

tags: TV CBS

eMarketeer released a report showing that global ad spending on social networks is expected to reach $445 million in 2006 and nearly triple to $1,125 billion in 2007. They predict that the US will account for about 80% of the ad spend.

In a related article, Google announced that Its 2006 UK revenues are expected to surpass Channel Four’s (*) predicted £800m ($1.5bn) returns.

Since much of the advertising on social networks are contextual text ads like Google’s AdSense (Google owns the ad space on MySpace which eMarketeer estimates to account for 60% of social network ad spend) this all seems to indicate that

1. Social networks are real businesses – some are here to stay;

2. Broadcasters really need to start developing their response to user/viewer migration online.

(*) Channel Four is the UK’s second largest network, with about 9% share of viewers, that airs advertising in the UK (the BBC is paid by though a TV tax).

tags: social networks TV

Two weeks ago The Sun, the biggest selling newspaper in the UK, launched MySun, an interactive service will fell far short of the capturing the potential of social media.

Before I criticize MySun let me congratulate The Sun for this initiative. I can’t understand why other publications are not experimenting with social media. It is becoming apparent that Internet users are expecting much greater participation that, I believe, is the gist behind Web 2.0. Publications need to move away from a pure editorial model.

I think social media is particularly relevant for niche publications, specialist magazines, which have a strong voice (and brand) on topics that are the passion of a select few. Surely, these select few would appreciate being brought together and would have a lot of stories, insights and information to contribute.

Back to MySun. I tried to login before going on holiday but couldn’t because it was down. Today it’s taken me over 15min to register largely due to a very slow email validation process. So far so bad.

Once logged on I didn’t find any of the features that define social networks. I my profile is buried a few clicks away. That means my home page is really not my home page; it’s The Sun’s. “My” page looks essentially like something Yahoo has been offering for a decade: a personalized news page – except that all the news comes from The Sun. The other thing I see on “my” home pages are discussion. Err, these are forums, again, old stuff.

The strangest thing is that I couldn’t see anybody else. I felt all alone. There is no networking here. I don’t know who else is registered. There is no search. A “Take me to” function first gave me a 404 (dead link) and on a second try took me to a Sun’s columnist blog which was very unpersonal.

I couldn’t see any place on “my” home page for my friends. I can’t upload any content though I could blog (to who? who is looking?). The Sun doesn’t even invite me to send scoops or stories the way CNN does with i-report.

So, overall, MySun is a disappointment. It is just a personalized news page, something I have been able to get from Yahoo, Netscape, AOL, Google… hell loads of places, with the enormous disadvantage that all the news I get comes only from The Sun. They have failed to attempt to create a sense of community and shunned any and all content I may have wished to contribute to (and in the process enrich) the newspaper.

Prediction: If MySun is to last, it will need to undergo major changes that embrace social media.

tags: media social networks Sun

The Wall Street Journal (behind their pay wall) reported today on Nielsen/NetRatings figures showing a decline in the number of U.S. visitors at MySpace (4% and Facebook (12%).

The article says it might be due to excessive spam, privacy fears or just a seasonal fluctutation (last September a similar drop was recorded).

I believe all that. It’s too early to call the beginning of the decline of MySpace. But, I think it will come sooner rather than later.

Prediction: Over the next year we will see significant growth in specialist/niche social networks at a cost to the giant social networks. We are going to see birds of a feather flocking together. <=link>

tag: MySpace Facebook

The last 4 months since returning from my first expedition into SecondLife in has seen a flurry of activity in that virtual world with big brands like American Apparel, Starwood Hotels, Reuters, Nissan, IBM, Universal, PA Consulting and artists like Duran Duran and Suzanne Vega creating a in-world presence. This week the first pure SecondLife company, Crayon, announced their launch.

For regular information about SecondLife, I recommend you read Giff’s blog.

tags: virtual worlds SecondLife social networks metaverse