Puttnam’s Law and the threat to the American imagination – latimes.com.

“Puttnam’s Law: It is more acceptable to fail in conventional ways than in unconventional ways. And its corollary: The reward for succeeding in unconventional ways is less than the risk of failing in unconventional ways. In short, you can screw up with impunity so long as you screw up like everybody else.” – Neal Gabler, Senior Fellow at the Norman Lear Center at USC

I know you’re out there talented geniuses and music demi-gods, purveyors of sound and taste.  I know how hard it’s gotten for you to be heard, to rise above the morass, the banal, the dull, the lame, the putrid, but I have faith in you…and your fans are waiting.  Then along comes Zya Music to remind us that Matt Serletic and his brother Dean with their Wall Street partners Bo & Terry are going to set the music world aflame with their venture backed start-up Zya Music.  You might remember Matt as the producer of Matchbox Twenty who set the music world on fire, but I remember him as the clueless executive who buried my Virgin Records America company into the ground with the help of his brother.  Not content to stop there, him, baby brother & the Wall Street boyz are now giving us Zya Music and I quote:

I couldn’t make this shit up if I tried!  As a producer friend of mine said when I showed him this stillborn of a website: “This is exactly what the problem is with this generation…no real skills just nonsense.”  Ironically like Puttnam’s Law states, when vultures have nothing left to pull from the carcass of this company, the Serletic brothers will continue to ride their taste makers coattails of yore into the sunset only to meet with another pair of Wall Street dummies to fleece.

And all of this they will be able to do thanks to you foolhardy artists, musicians, songwriters who continue to wreak havoc on our cultural landscape because you unwittingly play into the hand of Puttnam’s Law.  You’ve been warned!


Pebble: E-Paper Watch for iPhone and Android by Pebble Technology — Kickstarter.

Crowdfunding while not yet part of the investment vernacular, has gotten a major boost from the recent success of the E-Paper Watch by Pebble Technology and its Kickstarter campaign.  What started for Pebble Technology as a funds raising project looking for an initial jolt of capital to the tune of $100,000 over 6 weeks has ballooned to over $6M coming from over 42,000 backers, with nearly a month still left to go before the funding is closed.  I wouldn’t be surprised, when it’s all said and done, if this project closes with over $10M and a 100,000+ backers proving the point that when a product is hot, it’s hot, period.

There’s nothing harder for any start-up than to find seed capital.  It usually comes from family & friends, brave and slightly foolish angel investors.  What distinguishes crowdfunding from buying an equity position into a company and parlaying that position for stock, is how the crowdfunder instead buys into the promise of receiving a tangible reward (be it music, a film, a watch) once funding for a project in question has met its financial objectives.  Should it not, then no funding takes place and the crowdfunder gets his money back to keep or invest elsewhere.  Most crowdfunders invest $20.00 – $60.00 into Kickstarter projects, but this E-Paper Watch has clearly exceeded everyone’s expectations and created a huge buzz for this watch and a windfall for Pebble Technology.  It’ll be interesting to see how Kickstarter doles out such a large amount of cash to a company that’s still very much in its infancy, and with no regulations on how the money should and will be spent.

Naturally if crowdfunding works for the production of a watch, then it will also work for the production of music.  And actually it already has, many many times!!!  Except now here comes the JOBS Act signed into law by President Obama earlier this month and with it comes the heavily reworked CROWDFUND Act (Bill S. 2190), which should allow for small, even micro investors to hold equity (stock) in the crowdfunded companies they support.  The SEC has this under review for the next 9 months before it’s law, so for all of you indie artists who’ve always wanted to have your own label, here’s a perfect opportunity to rally all your musical peers and all your fans to motivate them to own a piece of the label dream with you.  And that my friends are chaordic principles in action!

If you haven’t heard of Allen Stone, that’s OK…you will.  This is after all a music blog.  What I love about Allen is the anomaly, the defiant falsetto, and the timely lyrics of this song.  With America bitterly split down idealistic party lines, equally tugged by the right and the left, Allen is a reminder that all you need is…talent!

Copyright Royalty Board To Set Mechanical Royalty Rates For Digital Music Services | Billboard.biz.

I love the hyperbole of this story.  Leave it to music industry trade organizations to call this a major settlement.  What a crock of sh*t!  After years of acrimonious wranglings, posturing and petulance, all these industry dinosaurs could come up with to bring some semblance of sanity to the digital music licensing process was to rely, again, on the legislative intervention of the Copyright Royalty Board (CRB)…… sigh!

I prefer the frankness of Digital Music News when referring to this ‘historic’ accord:

That said, something did happen here – even if it was in a licensing corner.  In a nutshell, pre-existing mechanical licensing structures related to paid downloads, subscription services like Spotify, and ringtones will largely remain the same, with newer rates established for emerging platforms like mixed-format bundles, locker services, and concepts like Muve Music.  Most involved ‘greater than calculations’ and a rash of complicated percentages and formulas.

Thanks Paul.  In short, if you’re a music publisher, you’re doing better.  Everyone else, get in line, maybe you’ll see some ducats.

How many of you have heard of Muve Music by Cricket Wireless?  Launched in January 2011, this phone bundled with an all-you-can-eat music service topped 500,000 subscribers one year later and they’re adding over 10,000 subscribers a week.  Granted the music is stuck to your phone, but you get millions of song, all readily and easily accessible to play back via the phone.  At $65/month for unlimited talk, text and music playback that’s a good frickin’ deal.  I pay twice as much with AT&T and have no music service in my plan.  The beauty of the Muve Music service is how Cricket Wireless knows exactly what you’re downloading, listening to and how often.  The customer details they have are a gold mine and I hope they’re leveraging that information to keep their costs down when negotiating with labels directly.

It would be so much easier if Cricket Wireless had access to the ToBeDigital exchange I proposed in my previous post.  It’s going to take some time before artists and songwriters trust themselves enough to collaborate on gaining fans and dollars chaordically, however, now that they’ve finally recognized there’s gold in tending directly to them copyright fields they’re much likelier to exploit their copywares by themselves.  A similar idea comes from Ian Rogers, the CEO of Topspin Media, who proposed the construction of a machine-readable, rules based content registry into which content owners can easily opt-in or out after having set up the rules and the prices for the different use of their content.  As Rogers says very eloquently:

The upside to the industry as a whole is massive, developers willing to play by the rules can integrate media into their apps (and pay for the rights to do so) simply, and a true digital marketplace for content governed by market forces, not gatekeepers of large catalogs of content. I strongly believe the net of this will be more money to content owners more quickly than the current course we’re on today. We keep hearing “digital music needs to get to scale quickly for the music industry to succeed”; why wait for one player to scale when you could scale an industry of players?

By “players” he means you artists, you songwriters, you who actually create AND own something.  So what are you waiting for???

In the Battles of SOPA and PIPA, Who Should Control the Internet?

Every now and again a great article, like this one in this month’s Vanity Fair, springs forth from the cabals of cultural journalism to adroitly and accurately summarize what’s in play when it comes to the Internet.  More importantly this is the first time I hear of the forces of Organized Chaos being up against the forces of Order & Disorder.

While some may find this way of framing the battle for the Internet as overly simplistic, I have long argued artists have the best chances for success when they collaborate and cooperate to embrace the chaotic forces of the Internet.  This is how a Chaordic Organization functions as defined by the CEO Emeritus of Visa, Dee Hock:

By chaord, I mean any self-organizing, adaptive, nonlinear complex system, whether physical, biological, or social, the behavior of which exhibits characteristics of both order and chaos or loosely translated to business terminology, cooperation and competition.

* Dee W. Hock “The Chaordic Organization – Out of control and Into Order – 1998

In his amazing book, Birth of the Chaordic Age, Hock provides a blueprint for all artists to follow, one that requires artists to get away from music being sold solely as a product to one that emphasizes the importance of music being consumed as a 24/7/365 global service: A service that does away with sovereignty, drowns out piracy, respects privacy and provides security.  How?

Just like Hock convinced Bank of America to give up ownership and control of their BankAmericard credit card program and turn it into a non-stock membership corporation equally owned by all of its member banks eventually called VISA, I am suggesting all artists worldwide give up on sovereign copyright protectionism and embrace a global copyright exchange, called ToBeDigital, equally owned by all of its copyright bearing members be they artists, labels, songwriters or publishers.

Just like VISA facilitates EFTs (electronic funds transfers) throughout the world, ToBeDigital would facilitate ERTs (electronic rights transfers) granting immediate, redeemable access to music to fans on any playback device once they’ve paid a nominal interchange fee + the value of the music purchased set by the merchant.

For a fraction of what artists pay out today to Performing Rights Organizations (PROs) around the world, not only would artists get paid much faster on what they sell, they’d get paid on everything they sell and do away with weightings which are employed by PROs to assign a greater or lesser monetary value to music performances in broadcast media.

And for music fans there would be nothing but complete clarity, total ubiquity and pure enjoyment.

Louis C. K. and Others Take Stand-Up to the Web – NYTimes.com.

Comedian Louis C.K. sold a full-length performance film for $5.00, that’s right 5 bucks, DRM free as an MP4 file.  Once you buy you get 2 streams and 2 downloads (in 720p HD mind you), and then have to pay again, but if you’ve downloaded since it’s DRM free you can watch over and over again.  That’s 62 minutes of uninterrupted pure entertainment at one-third the price of a physical DVD and with zero creative trespass from the part of a production company or studio.

Louis C.K. knew the content would be pirated and he had this to say about it:

To those who might wish to “torrent” this video: look, I don’t really get the whole “torrent” thing. I don’t know enough about it to judge either way. But I’d just like you to consider this: I made this video extremely easy to use against well-informed advice. I was told that it would be easier to torrent the way I made it, but I chose to do it this way anyway, because I want it to be easy for people to watch and enjoy this video in any way they want without “corporate” restrictions. Please bear in mind that I am not a company or a corporation. I’m just some guy. I paid for the production and posting of this video with my own money. I would like to be able to post more material to the fans in this way, which makes it cheaper for the buyer and more pleasant for me. So, please help me keep this being a good idea. I can’t stop you from torrenting; all I can do is politely ask you to pay your five little dollars, enjoy the video, and let other people find it in the same way.

It’s one thing to rip-off a corporation, another to take from a one-man production company who’s asking you not to rip him off.

RESULT: Over 200,000+ paid downloads for a total of over $1+ million.
PROFIT: $800K free and clear for Louis C.K. to do what he wants with.

Leave it to a comedian, a truth teller, to show all you pseudo-entrepreneurial, creative dilettantes the way forward in this Information Age.  Sure Louis C.K. is just one of the funniest comics working in America today, but that’s the point!  When you can offer us a constant, steady stream of great creative content at a killer price we fans will respond in droves and pay you for it.  I guarantee if and when Louis C.K. puts out garbage for sale, even under the same DRM-free terms, if it’s crap then we fans will clearly let him know.  Fearless, gutsy, assured, unique – all good reasons for why I’m willing to spend my money.

A $0.99/song per download is an outdated charge of the past modeled on physical product.  Fans need AND want an opportunity to discover, share and consume digital music at an affordable price.  If you want your fans to be compelled to consume over and over again, then give them a viable price alternative.  Try $0.25 to 0.33/song per download and see what happens, especially if you offer up fresh, new and different music constantly.  Walk, talk and share with your fans through the creative process from songwriting to producing to recording and mixing and see how they respond – from an acoustic demo, to a fully produced yet unmixed master, to the end result.  This is the closest opportunity fans will have to be right there in the studio with you. And for that privilege the result will be… Ka-ching!

After 244 Years, Encyclopaedia Britannica Stops the Presses – NYTimes.com.

…to figure out that at a cost of $1,500.00 for 32 leather bound volumes they could no longer afford to compete with the free, user generated, 11 years old, encyclopedic website Wikipedia.  It took a decade for a digital phenom to disintermediate a nearly two and half century old business.  Why hasn’t there been a similar, swift change of the guard when it comes to music?

If we credit Edison’s 1886 patent for the wax coated recording cylinder as the start of the recorded music industry, then the business of music today is in its 124th year.  That said mp3 files have been on the internet since 1994, so applying the same disintermediation arithmetic to music means it should have taken about 5 years for the physical consumption of music to go the way of the Dodo bird.  Ironically, 1999 was the music industry’s zenith with global sales topping out at nearly $27B.  Many well known factors (from the failed draconian enforcements of the Copyright Cartels, to the steady adoption of broadband, to the falling costs of technology, to the rebirth of Apple, and the P2P revolution launched by Napster) have since reversed that trend with sales of music dropping steadily every year.

So, again, why is it taking so long for things to change?  Some say CDs are here to stay, that they serve a qualitative and nostalgic purpose.  One good friend, who sells physical CDs online, argues that millions of CD buyers are still out there looking for what he has to offer, and with less competition from brick and mortar stores he’s poised to make a seven figure a year income.  OK, but for how long?  The CD is well on its way to becoming a collectors item and, like the Encyclopaedia Britannica, physically obsolete.

Music fans have spoken, they want 24 hours access to their music wherever they might be, in an easy and cost effective manner.  The way forward is mobile streaming because when fans leave the house it’s their keys, wallet, and cellphone that they take with them.

The Spotify music streaming service is the closest thing they have to that desired ubiquity, but cost for the service and its condescension for indie artists & labels has made for a spotty service.  Spotify is not the future, it’s the staid present under the watchful eye (and ownership) of major labels.  If major labels and their cronies (publishers, PROs, trade organizations) aren’t the agents of change, then why do artists still appear dumbfounded by the fact that change is being spearheaded by TechCos?

What is it going to take for artists to embrace change on their own terms and scale their musical offerings to a global marketplace instead of falling prey to copyright politics defined country by country?

Today your customer is global from the moment you make your music available.  Isn’t it time you started competing and cooperating with each other on a global scale to meet the needs of your fans?  That’s the genius of the Visa credit card: No single owner, no centralized power, no country by country politics, instead a global marketplace defined by a financial exchange between all merchants for the customer and all customers for the merchant.

So why not all artists for the fan and all fans for the artist?