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Now That’s What I Call A Compilation

September 30, 2013 Client Tool, Industry Trends 5 Comments

best country everWho doesn’t love a great mixtape? A collection of handpicked songs that represent the best of the best of whatever genre, activity, theme, emotion, season, holiday, or mood those songs embody. And while many music lovers may say that compilations erode the value of the album, it cannot be refuted that compilations provide tremendous value to music consumers and help record labels revive back catalogue whose sales may be waning. And they are great on road trips… and for dance parties… and for introducing music lovers to rarities and unusual sub-genres. They’re just great, got it?

And the business of compilations is doing very well. In fact, The Official Charts Company in the UK reported an increase in compilations sales in 2012 of 7.2%, bringing sales of the format up to 21% of all recorded sales. They are one of the fastest growing sectors of recorded music.

So, you ask, how do you make a great compilation?

That’s easy. You pick a theme, license (for super cheap) the absolute best songs ever to fit that theme, order those songs in the most inspiring and interesting way possible, then create the most beautiful, eye-catching art that will make it stand out from the millions of others on the digital shelf, and price it at just the right price so that consumers see more value in purchasing the album than just a few tracks off the album.

Or you could just call it “NOW That’s What I Call Music.” Those seem to sell well.

In all seriousness, though, there are 4 basic things you need to consider when creating a digital compilation:

Tracklist
The songs — and the order of those songs — are the most important aspect of the compilation. This may seem like a no-brainer, but it is worth emphasizing. You can have the coolest looking “Best of Soul” compilation out there, but if it doesn’t have James Brown on it, it will never sell as much as one called “Worst of Soul” that does have James Brown. Ok, that might be extreme, but I’ve made my point. Do your homework, scour your catalogue for the music that fits, order those tracks in a thoughtful way, and it will pay off.

Title
Unless you already have a strong brand (NOW! or Ministry of Sound), the title of your compilation can have a huge impact on sales. Inserting a few key words that consumers search for will help your album gain some visibility in an already crowded digital marketplace. Do some research. Do people search for “Flamenco Guitar Music” or “Spanish Guitar Music” more? “Swing” or “Doo Wop?” “Christmas Music” or “Holiday Music?” “Songs” or “Music?” “Best” or “Greatest?” Some of this will be trial and error, but running these phrases by Google Trends will prove helpful.

Artwork
How much the cover art of a compilation matters certainly depends on the genre or theme. But in my experience, while artwork matters, it matters to a lesser extent than traditional albums. It is likely that a consumer LOOKING for a nice compilation of “Latin Jazz Music” or “Surf Rock Songs from the 60′s” is ok buying something that LOOKS like a compilation. This means that it doesn’t have to look like a rare work of art, but should look sharp, professional, and not too Photoshop-y. Simple, easy to read text next to an iconic image that conveys the music on the album works very well.

Value
Once you have created a great compilation, don’t ruin it by pricing it incorrectly. Compilations are typically value purchases for music shoppers, which means they look for something with more tracks than a typical album, and at a very attractive price point. 20 songs for $8, 30 for $10 — something in that range. Obviously, mechanical royalties and whether the master recordings are owned or licensed play into this pricing decision, but at the end of the day most compilation buyers want a good amount of music for a low price.

Happy Compiling!

(written while listening to “The 50 Best Country Songs Ever” by Various Artists)

Cut the “Ribbon” on Your Digital Store

February 11, 2013 Marketing No Comments

Ribbon LogoSo you’re a band with a new digital track, T-shirt, or sellable product and you want to get it out to your fans? But there’s a problem. You don’t have a strong digital storefront and your followers constantly have to jump through a series of hoops and login forms to buy your stuff. Well, fear not idle salesmen. Ribbon, a payment startup company that recently closed a $1.6 million seed round, is here to cure your selling woes.

The AnglePad-backed company, based in San Francisco, allows you to sell to fans via Facebook, Twitter, your website, personal blog, or any other social media through a one-page checkout system. Whether you’re looking to sell digital, physical, or service products, Ribbon makes it simple. For digital products, the company hosts all of the files as well as the delivery of the product at the end of every sale. Both physical and service items are given simple checkout pages that can be linked to from anywhere on the web.

So, if you have a strong Twitter base, you can now leverage your feed to sell your swag. Simply include the Ribbon link in your Tweet and your followers will be able to preview and purchase your product directly from your stream. The service also provides sellers the ability to embed a “Ribbon Button” on their website or blog, allowing visitors to purchase items with a click of a button — e-commerce has never been so easy.

But just as e-commerce becomes even more manageable, the letter for digital sales is changing… to F-commerce. With the launch of Facebook in-stream payments, Facebook users now never need to leave the website to make a purchase. And with payment services like Ribbon, this means easier purchasing for your fans from your Facebook page. Paul Wall has already embraced the service, selling songs with the Ribbon Button on his website.

The best part about Ribbon is that sellers only pay the company when they make a sale (5% + 30 cents per transaction). Check out the Ribbon website to create your own account and get more information on the service.

Ladies and Gents, iTunes 11 Has Arrived

November 30, 2012 Industry Trends No Comments

iTunes 11 is here! With a complete redesign of both the iTunes player and the iTunes store, we wanted to point out some great new features that you can use to optimize your listening and shopping experience.

First, let’s start with the player itself. You will notice when you first open iTunes 11 that there is no longer a sidebar, which has been replaced with either more browsing space on an album level or has been turned into a browse by artist/genre area. Now — if you weren’t quite ready to give up that sidebar, DO NOT FRET! You can still access it by clicking on the “View” drop-down and selecting “Show Sidebar.”

A few more big changes you will notice with the player are focused around the album view. Apple’s new album artwork layout offers a great way to quickly browse through your albums while still being able to enjoy all of your colorful album artwork. When clicking on any album, an ‘expanded view’ will appear. Not only does this expanded view show you the tracks of that specific album, but if you click the ‘In the Store’ button on the upper-right corner it will also show you Top Songs, Top Albums, and Recommended Songs [from other artists], all of which you can purchase right from your music library. How’s that for some intuitive up-sell!

Gone are the days of the unknown queue when using iTunes ‘Up Next’ feature. This functionality allows you to access a full list of upcoming and previously played tracks by clicking this button  in the Now Playing window. You can also click the arrow button next to any track and either place the track at the front of your queue by selecting ‘Play Next,’ or simply add it to your queue by selecting ‘Add to Up Next.’

Check out the new design of the Mini Player by clicking the button on the upper-right of your player. You will notice that the player is much sleeker in design, only displaying the track name, artist name, and album artwork. Hover your mouse for Play/Pause, Forward, Back, and Volume Control. And notice that you can now also access ‘Up Next’ and search your library right from the Mini Player.

There have also been some big changes to the iTunes Store. Toggle from your iTunes Library to the store by clicking the ‘iTunes Store’ button on the upper-right of your player. This will take you to a fresh new redesign with bigger showcases, sliding bricks and all around bigger album artwork.

One functionality that iTunes has added to the store is each artist now has a dedicated page. This will contain a Collection page, which showcases all of that artist’s Albums, Songs, Music Videos and Movies along with other artists that listeners have bought. The Artist Info section allows you to browse through the artist’s biography, influencers, followers and contemporaries. Some artists also have a Gallery option, which allow you to view a variety of high-resolution photos from their career.

All of these features make for a robust new store and player. I am sure there is more in store for iTunes in 2013. What do you surmise is coming?

Check out the Apple website for a demo video and more information on these new features.

You Asked, We Answered: Digital Sales Payouts

With streaming constantly under scrutiny for its payouts, licensing fees and revenues, the question of profitability and growth stays fresh in our minds. In that vein, we received the following question from our clients, and to answer it, we requested the professional insight of Tom Wheeley, Senior Director of Business Development.

Why do digital payouts vary so much between DSPs? 

This has been a big topic in the music press for some months now with questions over transparency and clarity into streaming rates. Everybody knows what iTunes’ payouts to labels are. The wholesale rate is set, right. This track gets sold and this is the payback, so why for f&*k’s sake isn’t this the case with streaming payouts, I hear you ask? There isn’t any one reason why per stream payouts are inconsistent; rather it’s down to a number of variable factors. Let’s break this out into freemium (free to the user but funded) services and subscription services, two very different cases but ultimately the same inconsistent result.

1. Freemium Services

Free-to-user music streaming services are by and large funded by advertising. Spotify and Deezer are early examples of this model that sets out to recruit music users to try the service and effectively annoy them with ads until they convert to the premium version i.e. paying a subscription and removing the ads. However, the service needs to pay for the content so that labels that have licensed their music to the service will receive a portion of the ad revenue made. This number will be based on how many plays their content has received (their market share). The thing is, advertising revenue is based on how much ad inventory the service can sell, which in turn is impacted by the number of users on the service. Any fluctuation in ad revenue or market share will affect the payouts to labels. Another freemium method to recruit users that is employed by the likes of Rdio and MOG is the ‘Gas Meter’ approach. This limits the amount of music users can listen to over a period of time and can be funded by advertising, a per play minimum (if services want users get a subscription experience), or both.

2. Subscription Services

Subscription streaming services work in much the same way; it’s just the source of the company’s revenue that’s slightly different. Subscription services don’t tend to agree on fixed per-play rates because it can be very expensive, so instead of fixed payments, content suppliers are offered a pro-rata share of the revenue pool. Here the payout will be affected by the number of subscribers paying a subscription fee and the usage share of a given label. MP3 bundle subscriptions rely on subscribers not redeeming their downloads: for instance if a user purchases a 10-track MP3 bundle and only downloads two tracks — both of which are yours — but does not redeem the remaining tracks in the given month, then the pay out of those two tracks is going to be a lot higher than say a user who downloads all 10 tracks in their subscription. This is due to breakage, which can be described as a product sold — such as a gift card — but never redeemed and therefore entirely profit as the gift card company need not provide a service for an unredeemed gift card. Breakage is evident in streaming too, especially where bundle deals are concerned. If you purchase a tariff with a streaming service bundled in and you only stream 100 tracks in an entire month, then the value per stream will be significantly higher than a subscriber who streams 10,000 songs.

So you can see why per-stream returns are a little all over the place! It’s down to the combination and configuration of a number of factors and is not as clear-cut as selling a download. Remember: access (streaming services) and ownership (à la carte services) are different beasts… but there’s no reason why we can’t all get along.

Digital Music on the Uprise in 2012

It’s no news that digital music has slowly been claiming a solid market share for the industry. But there are still improvements to be made and growth to be seen.

Worldwide sales of digital music grew by 8% last year to 5.2 billion U.S. dollars as the International Federation of the Phonographic Industry (IFPI) announced in London at the introduction of the Digital Music Report 2012. And it’s not over… The digital music market could continue its expansion in 2012.

In relation to global sales in 2011, the share of digital music grew by 32%. The range of relevant licensed online music services grew within the past year from 23 to 58 countries – mainly due to the rapid expansion of services such as iTunes, Spotify and Deezer.

Despite the positive impact, online piracy is still the biggest hurdle to sustainable growth for music on the Internet.”While concrete measures abroad to curb online piracy show first successes, Germany lags more and more in the enforcement of copyright,” lamented Florian Drücke, Managing Director of the Association of Music Industry in Berlin. “It is imperative that conditions for growth in the digital space also be created in Germany.”

The Digital Music Report shows all global sales of downloads, subscriptions and ad-supported online service on an annually basis and provides an overview of the legal music service on the Internet and displays on the market developments. The 32-page report can be downloaded for free here.

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