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Keep an Ear Out for Earbits

Earbits LogoAccording to the IFPI (International Federation of the Phonographic Industry) Digital Music Report 2013, the music industry’s global revenues increased by 0.3 percent in 2012. Though this may seem negligible, this was the first time that the industry’s global revenues increased since over a decade ago in 1999.

A major contributor to this growth is said to be the burgeoning popularity of subscription-based, music streaming services such as Spotify. Nevertheless, with the growing number of both free and premium users joining these platforms, many critics of this business model as well as rights owners of songs have condemned these services for paying out minimal royalties.

In the midst of these issues, Joey Flores, CEO of Earbits, has found an opportunity in which artists can generate more value for themselves with this new music consumption model. Earbits initially began as an Internet radio platform for SFGate Radio. Artists who were touring in and/or near San Francisco would actually pay the service in exchange for being exposed to fans located in the area. However, through some bouts of trial and error, Flores developed a new foundation for Earbits in which artists receive promotion and fan data in exchange for users being allowed to stream their songs.

Furthermore, there’s another layer to this model, whereby user streams are powered by a point system called “Groovies” (each song costs 10 Groovies to stream), which fans earn in a myriad of ways. These include creating an account on Earbits (500 Groovies), sharing music with friends on Facebook or Twitter (100 Groovies), and Liking an artist’s Facebook page or joining their email list (50 Groovies). Earbits is also planning to attribute points to attending live shows, buying merchandise, as well as joining Google Hangouts with artists. This type of system makes the foundation of payment a matter of social currency as opposed to a monetary one, which is the basis for other streaming services like Spotify, Rdio, and Deezer.

Though Earbits has moved toward the streaming model, it still has radio-style channels on the service that are curated by the team. Users can blend channels together to form their own, but like all Internet radio, it doesn’t allow for the freedom of interactive streaming. However, it costs no Groovies to listen to the channels, which makes it a viable option for those wanting to listen to music but not have to earn any points. It can also be a useful tool to discover music, and then earn/use Groovies to freely listen to the music that you discover and love.

With this innovative model, it appears that both artists and music listeners can benefit. Artists obtain more data on their music listeners as well as drive traffic to their social media outlets, which can lead to listeners spending money on their merchandise. Music listeners consume the music they want by simply engaging with the artist and the artist’s music via social media. Though only time will tell if this model is sustainable, Earbits offers a refreshing, new look on how artists and fans can obtain value from music consumption.

Too Lazy To Read The 2013 IFPI Digital Music Report?

March 4, 2013 Industry Trends 2 Comments

IFPI_LogoAs many of you may know, the 2013 IFPI Digital Music Report was recently released (all 34 pages of it). In case you do not have time to kick your feet up and soak in the various statistics pouring throughout the report, I’ve put together a cheat sheet just for you.

Note that there are several sections in this report (including digital marketing case studies and further reports on the driving forces behind the digital world). For this post, I am focusing solely on the report’s Facts and Figures.

Everyone here at The Orchard is thrilled to see digital trends on an uptick from 2011 to 2012. It’s an encouraging time to work in the digital space and it certainly allows us to look forward to a solid 2013, continuing this pattern of growth, innovation and international expansion.

Industry

  • Global Digital Revenue: 2011: 5.1 Billion and in 2012: 5.6 Billion (9% increase) which is 34% of total industry revenues
  • Download sales (both singles and albums) increased 12% in 2012 to 4.3 billion units globally which represents around 70% of global digital revenue
    • Digital album sales grew at more than 2x the pace of single tracks
    • 2.3 billion single track downloads (8% increase since 2011)
    • 201 million digital albums sold (17% increase since 2011)
  • In 2011, major international services were present in 23 countries, today they are in more than 100 countries
  • 62% of internet users use licensed music services to download music
  • Subscription services are now more than 10% of digital revenue — with 20 million paying subscribers (growth of 44%)
  • Paying subscriber numbers for subscription services increased by 44% in 2012
  • Pandora accounts for 8% of all radio listening in the US
  • Music industry recovery can be roughly attributed to 3 key factors:
    • Expansion of digital services
    • Improved quality of existing services (due, in some cases, to competition)
    • New ways of connecting

Physical

  • Physical sales decreased in 2011 61% and it is estimated that this number will reach a decrease of 58% for 2012

Performance Rights Income

  • Revenues have grown by 9.3% in 2012 to 1 billion, which accounts for 6% of the total industry revenue globally and 17.8% of global digital sales (and as much as 10% in Europe and Latin America)

Video

  • YouTube has more than 800 million active users globally
  • 9 in 10 of the most watched videos on YouTube are music related

2012 Top Album List – Worldwide

On average 1 in 5 units of the top selling albums (21%) were bought in a digital format with 38% of One Direction’s tween contingent snatching up their album Up All Night digitally.

1. Adele 21 8.3 Million
2. Taylor Swift Red 5.2 Million
3. One Direction Up All Night 4.5 Million
4. One Direction Take Me Home 4.4 Million
5. Lana Del Rey Born To Die 3.4 Million
6. Pink The Truth About Love 2.6 Million
7. Rod Stewart Merry Christmas, Baby 2.6 Million
8. Rihanna Unapologetic 2.3 Million
9. Mumford & Sons Babel 2.3 Million
10. Maroon 5 Overexposed 2.2 Million

2012 Top Singles List – Worldwide

1. Carly Rae Jepsen Call Me Maybe 12.5 Million
2. Gotye Somebody That I Used… 11.8 Million
3. Psy Gangnam Style 9.7 Million
4. Fun We Are Young 9.6 Million
5. Maroon 5 Payphone 9.1 Million
6. Michel Teló* Ai Se Eu Te Pego 7.2 Million
7. Nicki Minaj Starships 7.2 Million
8. Maroon 5 One More Night 6.9 Million
9. Flo Rida Whistle 6.6 Million
10. Flo Rida Wild Ones 6.5 Million

*The first Brazilian solo artist in 5 decades to have a song in the U.S. Billboard Hot 100 chart AND is a client of The Orchard!

95% Of All Downloads Are Still Illegal…

March 7, 2011 Industry Trends 5 Comments

The Digital Music Report states that still 95% of all downloads remain illegal! People are buying more music, but the damage caused by piracy will cost us more than a million creative jobs by 2015.

The international record industry has called on governments around the world to fight stronger against illegal music downloads from the internet. Frances Moore, the chairman of the World Federation of the Phonographic Industry (IFPI), said that countries like South Korea and France have already taken more stringent measures against piracy. Even though the demand for legal songs from the internet is growing, there are still 95% of all downloads are illegal.

The worldwide trend is still going away from the CD and is moving to music files from the internet. In 2010, sales of downloaded music rose by 6% to 4.6 billion U.S. dollars (3.4bn euros). Meanwhile, nearly a third of the total turnover for record companies comes from digital business.

The situation in Germany is still a little different. Germany is still a strong physical market. CDs still made up about 80% of sales in 2010. But the digital market continues to expand. For the past year sales grew by 33.2 percent!

For the first time worldwide a song has hit 10 million legal downloads: “Tik Tok” by U.S. pop singer Kesha was downloaded 12.8 million times. In second place was Lady Gaga’s “Bad Romance”, which was downloaded 9.7 million times.

The industry is looking forward to the future and hopes that the trend of legal downloads will grow. Cloud services just might increase the trend.

About The Orchard

The Orchard is a pioneering music, video and film distribution company and top-ranked Multi Channel Network operating in more than 25 global markets. Founded in 1997, we empower businesses and creators in the entertainment industry.

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