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Hypebot.com Year End Virtual Panel Recap  

Panel LogoWe've asked several industry leaders and influencers to join us for Hypebot.com's inaugural year end virtual panel series. We've asked them to speak openly about their thoughts on "The Taylor Swift Debate", what the introduction of YouTube Music Key and Apple acquiring Beats means for the industry, and we've also asked them to discuss what 2014 meant for their business in 2015. The panelists are listed below. Follow the links to each panelist's respective response. 

TOP POSTS: This Week's Most Read Posts on Hypebot.com 

Getting It Done: The Week In D.I.Y & Indie Music 

REWIND: The New Music Industry’s Week In Review 

Kevin Breuner, CD Baby VP Of Marketing Looks Back On 2014 

Panel LogoKevin Breuner, Host of DIY Musician Podcast, and VP of Marketing, CD Baby joins us today on Hypebot.com's year end virtual panel. As an independent artist, Breuner responds to the current streaming debate saying, "You never know where your fans are going to come from. For that reason, I feel it’s important to have your music in all the places people go to enjoy music, including Spotify. I would hate to find out that someone who hadn’t heard us before, but happen to be at a show, opened their Spotify app in a moment of intrigue, couldn’t find us, and just moved on." 

1) Do you see the current debate questioning the effect of ubiquitous free music online leading to real change, or is the Taylor Swift rift just a short term distraction?

I think it’s an important debate, but I think for independent artists it can be a bit of a distraction from the strategy that has proven most effective for the independent community over the years. I always tell artists that they should direct fans to the places that are most beneficial to building their career and making money. It’s important to note, that when I say "fans," I’m talking about the people that love an artist's music and want to support everything they do.  So if you get an email from my band, you’ll be directed to buy music at cdbaby.com where we make far more money than if we sent everyone to other digital music retail sites. 

That being said, as an independent artist, I’m aware that opportunity and new fans are lurking around every corner. You never know where your fans are going to come from. For that reason, I feel it’s important to have your music in all the places people go to enjoy music, including Spotify. I would hate to find out that someone who hadn’t heard us before, but happen to be at a show, opened their Spotify app in a moment of intrigue, couldn’t find us, and just moved on. It’s a missed opportunity to start drawing a casual listener into the realm of being a true fan. There will always be work to do to make sure that when new technologies emerge, the artist community is fairly represented and compensated.  That being said, it’s also important to remember that music fans have their preferred listening method whether it’s CDs, vinyl, MP3s, or streaming.

CD-Baby-Music-LicensingI don’t think it’s wise for independent artists to alienate large groups of potential fans based on the service the fans like using to listen to music. I don’t want to look at people who are enjoying my music as the enemy (even if it would be more beneficial to me if they used another service). The formula is: Get people listening to your music, turn them into die-hard fans, and direct them to where they can best support your music and career. 

2) How important is the entry of YouTube Music Key and the expansion of Beats Music within the Apple ecosystem? Will they lead to a much larger streaming audience by the end of 2015, or just fragment a steadily expanding user base?

Clearly, with the reach those companies have, there is serious potential to greatly expand the streaming ecosystem. However, to me, it all comes down to execution.  Just because they have deep pockets and seemingly infinite resources doesn’t mean they’ll create an experience that users care about. There are plenty of examples of someone touting something as the “next big thing” only to receive a collective yawn from consumers. How will these services help me enjoy music more than I already do, so much that I would change my habits? Until they are actually available to everyone, I don’t know because I haven’t used them. It’s all just speculation at this point.

3) What big shift or story took place in 2014 that will have a major effect on your business/sector in 2015? How will you feel and field the effects? 

In 2014, we’ve seen serious growth in revenues to artists from sources like publishing and YouTube. It’s exciting for us to help artists connect with revenue that previously wasn’t easily accessible to them. In 2015, we expect that trend to continue in a big way. Doing this work for artists is what get’s us excited to come to work every day at CD Baby. It’s going to be a good year!

Passenger Case Study ’14: The Power of Social Media 

Passenger-Press-Photo-2By Jasmine Nguyen & Pedram Nikfarjam on DashTwo.com

From Australia to North AmericaRarely do we witness a successful infiltrating attempt by foreign artists trying to make it in the United States, with a few exception of Justin Bieber and the likes. Passenger, however, pulled it off almost smoothly and convincingly in 2012, mainly thanks to his major presence in Ed Sheeran’s North American Tour and the release of “All The Little Lights” by Nettwerk Music Group in the same region.

Within the short summer of 2012, the single ‘Let Her Go’ started getting noticed by the public, as Passenger was the opening act of almost all of Ed Sheeran’s tours in North America, Paris, Ireland, Australia, and New Zealand. In order to support this momentum, Nettwerk and DASH TWO collaborated to set up advertising plans for North American & European markets. The primary focus was to increase views on Passenger’s YouTube videos and to capitalize on the attention ‘Let Her Go’ received in selected radio markets.

Passenger-600x450At the end of 2013, ‘Let Her Go’ had 235 Million Spotify Plays (the single’s release date was 7/24/12), compared to rival top hits that actually have less Spotify play times. ‘Let Her Go’ went on to receive 4x Platinum in the U.S., 6X Platinum in Canada, 7x Platinum in Australia, 3X Platinum in Ireland, and 2X Platinum in the United Kingdom.

1.   Main Strategies: Radio Frequency + Supporting Ad Campaigns (2013)

In 2013, ‘Let Her Go’ started taking off on its own and was frequently featured on various radio stations throughout major markets in North America. This was supported by multiple short-flight geo-targeted TrueView campaigns in the next few months.

Between April and June 2013, DASH TWO worked with Nettwerk to run two strategic multi-markets YouTube TrueView campaigns, targeting main radio markets in the U.S. and a few Canadian cities. One campaign (April to June) yielded more than 350,000 impressions with 35,000 acquired YouTube views at a very low cost per click (less than 8 cents per view). The other campaign (April to May) yielded more than 50,000 impressions and 7,500 acquired YT views with an impressive over the roof view-through rate of 16.59%, unheard of for a relatively new musician, and a recorded low cost of less than 5 cents per view. Additionally, we made an effort to place a strategic call-to-action banner on the video itself to lead people to iTunes (free to the YT channel owner). This banner was kept up much longer than our campaigns and received over 90 million free impressions.

On March 8, ‘Let Her Go’ Spotify streams jumped from an average of 2k streams per day up to 25k and remained at that level until July 30 when they took another jump up to 35k. On June 2, ‘Let Her Go’ track sales bumped from 3600 per week up to 4400. From June 9 to June 16, sale records averaged between 7400 and 8600.

Between July and September, DASH TWO worked with Nettwerk to run Facebook Promoted Ads campaigns in specific geo-targeted radio markets, in an effort to build public awareness on Facebook, increase Passenger’s fan base, allow people to share official music videos easily, as well as to grow the YouTube view count via promoted video posts. We ended up with over 500,000 clicks on our FB ads.

The Stickiness Factor: the first 5 seconds of “Let Her Go” made up a very catchy and unique tune which allowed the targeted audience to recognize the song almost instantly. This worked in favor of our TrueView ads – since it is extremely important to capture the audience in the first 5 seconds of TrueView video ads before they could make the decision to skip the ads. It played a decisive role in how the American audience started relating to the song from radio playlists, YouTube videos, YouTube TrueView ads, streaming playlists (Spotify/Pandora), and other mediums.

2.   Facebook Tour advertising (2013) 

In May 2013, Nettwerk and DASH TWO collaborated on a grand Facebook advertising plan to support Passenger’s Tour. The plan featured a 15-market Facebook promoted event campaign and a 5-market YouTube TrueView campaign to assist with the tour publicity and sales. Between May and June ’13, we yielded over 3.5 million impressions, 1.2k clicks from the Facebook campaign alone with a CPC lower than $.49 cents for geo-targeted ads. Our TrueView campaign achieved over 15% click-through rate with 22.5k impressions and 3.5k views, while keeping the average cost at lower than 5 cents per view.

Track and album sales were steady in the weeks between May 5 and May 17. By May 19, album sales suddenly increased by 12% but ‘Let Her Go’ track sales stayed steady. During the same week, CD sale increased approximately 5% from the week before and 9% from two weeks before the Facebook Tour advertising campaign started.

Important strategic decisions during this time period: DASH TWO worked with Nettwerk to start creating specific and focused retargeting lists for Passenger utilizing viewer data from his YouTube channel. This served to capture the YouTube audience early on and slowly build up these lists to be used for later campaigns (Super Bowl Commercial, Today Show). For retargeting, it is always important to start early so that we don’t miss out on any engaged fans that should be included for future campaigns.

 3.   Super Bowl Commercial (2014)    #BestBuds

Critical factor: ‘Let Her Go’ was featured in Budweiser’s Super Bowl Commercial – played after Super Bowl ended but also widely spread pre-Super Bowl on YouTube (Feb 2, 2014). 

Advertising strategies:

Facebook promoted post campaign started running in days leading to the Super Bowl to raise awareness and publicize the song/commercial. Click through link leads to iTunes sale page.

Additionally, we also had a real-time Twitter campaign running simultaneously with the Super Bowl to reach our targeted audience online. Utilizing contextualized keywords relevant to Super Bowl commercials, programs, and announcements during the game, DASH TWO closely monitored and tailored Promoted Tweets constantly to keep up with the game and also push the hashtag ‘#bestbuds’to go viral. Another important strategy was utilizing the retargeting lists we created previously for Passenger and then targeting this audience during Super Bowl week and show time.

Results:

The grand Super Bowl campaign concluded with over 2.2 million impressions and 37.2k engagements in total. Within the YouTube portion alone, we yielded 13,000 views and over 488k impressions for Passenger’s YouTube videos. Our click-through rate for TrueView ads reached another record high of 20.80%, showing that the targeted audience was extremely engaged and responsive to our ads. The Twitter campaign achieved a 747k impressions and 7.2 engagements in total. The result was quite impressive considering this was a live event and we competed against advertisers with much bigger budgets. 

On Feb 2, ‘Let Her Go’ hit the #2 Song on the iTunes Overall chart while the album “All The Little Lights” went up to #11. ‘Let Her Go’ was number 1 on the Amazon MP3 chart for almost 72 hours after the Super Bowl commercial, and ended up beating the Bruno Mars’ single that was played live during the Super Bowl Half Time Show. In addition, Bud Weiser ranked #2 as most Tweeted brand with 394K Tweets and 291K unique authors.

On Feb 8, ‘Let Her Go’ reached its peak Spotify streams with 227k+ streams that one day. On Feb 11, ‘Let Her Go’ was the #1 tagged song on Shazam for that week. ‘Let her Go’ also landed as high as number 4 on the physical CD chart at this time as well #2 on iTunes following Super Bowl commercial, Facebook, Twitter, and YouTube ads.

As of Dec 10, ‘Let Her Go’ has become the fourth most Shazamed song of all time and honored in the Shazam Hall of Fame.

Watch Passenger’s ‘Let Her Go’ official music video here. Download ‘Let Her Go’ on iTunes here

Bandsintown Reveals Most Active, Rapidly Growing Artists of 2014  

BandsintownBandsintown dug deep into their large concert database emerging with a top list of most active, rapidly growing artists of 2014. Using Bandsintown Tracker to see which artists made their mark this year, Bandsintown identified and recognized artists with the Most Tour Dates, Most Countries Visited, and Fastest Growth. American Aquarium, Aly & Fila, Vance Joy topped each category respecitvely.  A further breakdown is illustrated in the infographics below. 

Kudos to multi-instrumentalist and songwriter Zach Deputy and his agent Chris Cate from our sister company Skyline Music for placing in Bandsintown's Top 10 most tour dates of 2014.

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Music Publishing News Roundup 12.19.14: ASCAP, Downtown, Michael Jackson & More 

AscapperryASCAP CEO, John LoFrumento has announced his retirement this week. LoFrumento started his career at ASCAP in 1981 as a controller, the serving positions as CFO, COO, and EVP before becoming CEO in 1997. Since then, ASCAP’s memberships have grown from 70,000 to 520,000 with annual distributed royalties growing from $417 million to $875 million. While CEO, LoFrumento helped introduce popular ASCAP programs like I Create Music Expo, and MusicPro Insurance. Along with President and Chairman Paul Williams, LoFrumento has lead the fight for fair compensation for songwriters in the digital space.

MORE:

The Michael Jackson estate has renewed their deal with BMI. President and CEO Mike O’Neill announced on Wednesday that their deal they have had in place since 1976 will continue for the public performance of all of Michael Jackson’s works. The catalog includes international hits such as “Billie Jean”, “Beat It”, “Black and White” as well as last years posthumous album, “Xscape”. This announcement follows recent BMI contract renewals with writers such as Taylor Siwft and Maroon 5.

Downtown Music Publishing, a top 10 US music publisher,  has signed songwriter Tim James to a worldwide publishing agreement. The writer’s catalog includes current hits such as “The Heart Wants What It Wants” by Selena Gomez and “Can’t Be Tamed” by Miley Cyrus.

Spotify Cares Less about Artists Than IPOs and Taylor Swift Cares About... Taylor Swift 

Taylor-Swift-Spotify-300x168By Tom McAlevey, CEO Radical.FM

Regardless of those truths, streaming will save the music industry and Artists will soon make more money than ever before. Daniel Ek is disingenuous when he claims that Spotify’s “reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy”. Spotify is a corporation. Its reason for existence is to make billions of dollars for its owners through an IPO that won’t help Artists at all, but will profit Mr. Ek handsomely.

Every major music label will also make hundreds of millions of dollars on Spotify’s IPO, and they will not share a penny of that with Artists either, despite having received their shares as a bonus for delivering Artists’ music to Spotify.Spotify did not eclipse Rhapsody and other competitors by being better, there is little difference between On-Demand services.

Spotify achieved its impressive growth by giving music away. Daniel Ek got in bed with the major labels in return for the right to be the first licensed On-Demand music service to offer a free tier. YouTube also benefitted tremendously by offering free On-Demand music, but its licenses were ‘accidental’ as it was not originally intended as a music service. It is Spotify’s massive free tier (which like YouTube pays less to artists than subscription-only services like Rhapsody) which raised the ire of Taylor Swift and her handlers.

 

Spotify-logo-650_0But Ms. Swift has no intention of keeping her music off Spotify any longer than required to extract an acceptable deal. Comments like, “music should not be free, and my prediction is that individual artists and their labels will someday decide an album’s price point” is just posturing for moral high-ground. Swift knows that she gets paid even for plays on Spotify’s free tier. And she has not (yet) complained about YouTube being free. Nor has Taylor Swift or Scott Borchetta griped about old-fashioned terrestrial radio, which not only plays her music for free to listeners, but also pays her via Borchetta’s label exactly... nothing. And despite selling 1.2 million copies of 1989 in its first week, the savvy duo suffers no delusion that there is a rosy future for CD sales. Most of Taylor Swift’s fans don’t even own CD players, hell I don’t own a CD player. In fact, the scathing Thom York critique of a broken music industry wherein he called Spotify “the last desperate fart of a dying corpse would be better applied to the CD.

The truth is that Ms. Swift, like Mr. Ek, is a shrewd business person. Taylor & Co are well aware that streaming represents the entire future of music consumption, including her own. And in that future she would like to make more money per stream than Spotify’s free tier pays. She is okay with the royalties Spotify would pay if it dumped 75% of its user base and retained only the paid subscribers.

Mr. Ek in his turn understands that dumping Spotify’s free tier would remove all advantage over rivals like Rhapsody, Rdio, and Beats. Ironically, dumping free users is exactly what would make Spotify a profitable company with long-term value. But reversing user growth now would reduce Spotify’s 2015 IPO valuation by billions, costing Daniel Ek personal hundreds of millions of dollars short-term, so he put his foot down. 

We live in a money-driven era. Nobody is surprised by stars like Taylor Swift clawing for extra millions. We’re not even shocked when nerds like Mr. Ek become billionaires. But independent Artists just get confused when two One-Percenters have a public lovers’ quarrel. What Artists need is a more honest music industry. Swift and Ek are likely to get richer regardless of when streaming matures. But how will the new streaming music world play out for the ‘regular’ Artists? Media hype aside, they’ll be just fine too. Here’s what will happen...

All-you-can-eat On-Demand services including Spotify and Apple’s forthcoming ‘iBeats’ will soon be relegated to subscription only. They will charge the current $10/month and will eventually replace downloads completely. CD sales in turn will give way to high-end upgrades of On-Demand services offering FLAC streaming at about $20/month to aficionados. Taylor Swift and every other musician will supply all their music to these services because compensation will be fair. Rhapsody already claims to pay Artists three times what Spotify pays per active user.

Smarter music label executives will get wise to YouTube’s free-ride too. The video streaming juggernaut will be forced to pay comparable rates for comparable services. If they choose to continue offering free On-Demand music, they will need to increase commercial load so dramatically that it will drive many users to the dedicated music subscription services. And if kids want to put up with full video ads pre-rolling every song they play on YouTube that’s fine, because the Artists will be fairly compensated for their work. Should Google manage to ‘out-muscle’ demands of fair payments for YouTube plays through underhanded dealings that reward labels but not Artists (like Spotify’s IPO), then Artists will get wise and run away in droves until Google learns to play fair.

Grown-up music consumers who choose not to pay subscription fees will forego full On-Demand just as they always have with FM radio. But excellent Personalized Radio services like Pandora and Radical will completely replace terrestrial radio (which pays Artists nothing) creating a huge windfall for Artists by compensating them for every track streamed, even on ad-supported services. And ALL music streaming services will see a modest increase in Composer Royalties vis-à-vis Artist Royalties, as the latter is heavily favored in most of today’s deals. Virtually all recorded music will soon be consumed via streaming. This scares many Artists trying to make a living in a quickly-changing music industry. And this is what inspired Taylor Swift to call out Spotify’s poorly-paying free tier - she does not want a bad precedent set.

But armed with straight information Artists will demand transparency from Labels. With transparent deals Artists will see a bigger cut of payouts from On-Demand streams. And with a level playing field between On-Demand services, payments from Spotify and YouTube will be much higher. Finally, as free-riding FM music stations are replaced by Personal Radio services that pay for every stream, todays musicians will be better and better off. The music industry has undergone a turbulent transition to an Internet economy, but as the exciting streaming industry matures musicians will begin to partake of their most lucrative era ever.

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