‘Tis the season for heartwarming adverts, packed high streets and attempts to break the usual online retail figures. Although the season is based around religious holiday, the notorious commercial factors surrounding Christmas will be keeping the economists busy, thumbing through sales reports and picking up the trends. But 2011 is  a year with much focus on the digital streaming services and new online music stores through Amazon and Google; what will the season bring for the music industry?

There were three articles in Music Week which got my attention this week and all service this discussion. The first very brief announcement covered Spotify’s growing body of paid subscribers, which has reached 2.5 million and still growing. Due to a US launch and its integration with Facebook, it seems things are looking good for Spotify to cut a profit at the end of the financial year. Although the company may rejoice, the success will only cause the many quibbling artists to continue harking about royalties and the devaluation of their product. If Spotify has so many subscribers, why are so many artists still not seeing returns from these services? Craig Hamilton was good enough to point out to me last week, “Some are on points deals (similar to physical deals) and are only getting 10% of digital revenue. Bear in mind that a label could be giving 20% to an aggregator, so artists could be getting 8% (or the label could even be passing on the aggregation costs to the artist!).

The other article discussed ST Holdings removing their catalogue from streaming services after seeing a poor return, including a dip in online sales (which may or may not be blamed on the growth of online streaming). They have now announced that they are working with streaming companies to determine what, if any, better deals could be made available to musicians whilst keeping the consumer happy. Another debate formed around “streams vs sales”; Beggars Group Chairman Martin Mills came out defending Spotify, equating 200 plays to a sale - although admitting that you need to be as popular as Adele to see those numbers. I do worry that there is a sort of nepotism at work between the major labels and the streaming companies, as it seems to be the smaller artists complaining and being squeezed on the deals. The fallout means 200 indie labels are off these services, making Spotify retort to the cue card: If you are getting something from pirates and those who are not your traditional fanbase, it’s better than nothing.

The third announcement addressed Amazon’s Black Friday deals on their music store. As with Amazon’s Cloud Drive and their commitment to pushing the buttons of many of the record labels, they are giving away free music to drive more customers to their service. The likes of Laura Marling, Katy Perry and The Rolling Stones will become the unwitting loss leaders; traditionally a supermarket tactic to sell goods at cost or below to stimulate greater sales in other goods. Going back to what I discussed last week, could digital music be reduced to free media to drive consumption of more physical objects, such as live concerts or merchandising? 

The battle of the gift cards...

So as Crimbo quickly approaches and we complete endless shopping lists, there will of course be the awkward gift card moment - when just nothing else will do! iTunes has always done pretty well in this market, with many choosing to buy a voucher for their iPod-obsessed teen or app-crazy spouse. Spotify will now have their green pieces of plastic gold on retailers’ shelves soon, and Amazon’s already strong online presence will have a new outlet to push. Even Facebook are getting in on the act in the US. X-Factor will make its traditional (yet not always successful) singles chart bid, and the Christmas pop compilations have already started flooding TV advertising and retail shelf space alike, almost as premature as eating a mince pie in November. 

This week we have been assigned several readings from Will Page, including “PRS Report: State of the Music Industry” (2008, 2009 and 2010), “Moving Digital Britain Forward Without Leaving Creative Britain Behind”, “The Long Tail of P2P” and “Spotify - the Stats”. We will also look at David Hesmondhalgh’s “The British Dance Music Industry: A Case Study of Independent Cultural Production”.

When I began working as a freelancer, I kept hearing a common phrase - “Work for free or at full price; NEVER work cheap”. A cheap rate can undermine your working process by eliciting the expectation of a lower quality. Working for free manages expectations and gives you more power and control; working for full price allows clear processes to be defined and quality and turnover to be discussed freely. Yet imagine a musician as a freelancer, independent of major label contracts; it seems that musicians are being forced to work more and more cheaply while still meeting the demands of the paying consumer.

In my last blog post, I discussed the Open Source community and how it works together for the good of a project rather than its financial success. The model allows developers greater collaboration, producing tools for productivity’s sake, although not completely altruistically. Developers create these projects to enhance or even launch their careers, and many go on to (or are already in) full-time employment with software engineering companies, building for commercial ventures. Their “side projects” tend to lead to other ventures from which an income may be made. Whilst writing about this process, I could not help but compare it to the works created by music artists - and how such products were not necessarily made available just to create a revenue stream, but also to enhance or create other opportunities. So is the recorded medium being sacrificed willingly to improve statistics in other sectors? And with many sectors of digital music on the rise, why are artists getting such a poor deal from new retail services?

The economics of the music industry have changed significantly in the last decade. The live industry and publishing sectors have seen growth, recorded sales have declined (although they did flatten out in 2010) and emerging business models have given rise to new revenue streams through ad-supported campaigns. Synchronisation and merchandising deals have served to bolster the recording sector, with the greater use of 360 deals (Page [2010], p.7). Many attribute these changes to the convergence of technology, new music distribution models (such as streaming and online retail) and increased media consumption. According to Page, the industry is not all “doom and gloom” as many commentators state. Digital revenue was up in all three PRS reports (see above);51% year-on-year growth in 2008 represented a boom that continued through 2009 though cooled off slightly in 2010. iTunes is hugely successful and further online retailers such as HMV and even supermarket Tesco have been helping to sector growth. Spotify’s streaming service has seen a significant rise in popularity, citing 2.2m users in 2009, quickly gaining 1m users on launch in the USA in August 2011 and rising to an estimated 3.25m following a deal with Facebook in September 2011. 

Yet this week, John Hopkins demonstrated his strong dislike for Spotify. The streaming service is notorious for poor royalty output in relation to other means of distribution and the number of times the music is accessed: “Got paid £8 for 90,000 plays. Fuck Spotify.”  His sentiments were shared by fellow Twitter users, and soon the debate erupted on Music Week’s comment section. The major labels have been happy to strike deals with streaming services, but the royalty output for artists has been considerably lower than that based on the sale of physical formats. Spotify’s defence focuses on access rather than ‘per stream’ revenue, reminding us they are the second largest digital streaming service in regards to revenue and payout (over $100m) and that at least the artist is getting something, rather than the nothing that online piracy generates. It also has to be mentioned that users do not usually turn to services like Spotify to listen to independents, and it tends to be the indie artists and those without representation who are complaining the most. Hesmondhalgh notes that independents often avoid compilations and the mainstream; Spotify and such services similarly can’t meet the needs of the indie artist as any monetary success is based on popularity and favours the ‘star system’. Physical formats rather than digital sales have remained popular for the indie consumer due to the souvenir nature of the product; these artists often produce more interesting physical products, from limited edition vinyl to letterpress prints. 

Although piracy has been blamed for the overall decline in sales, the industry is also at fault for not adapting to technological change quickly enough and languishing in a submissive ‘something is better than nothing’ mentality. Now that digital distribution is becoming the norm, labels are being held at ransom over participation in online sales and streaming services. A perfect example of this was Apple’s treatment of Coldplay, promising the iTunes launch of the album at one price but cutting the price on release (Knopper, 2009). When the label complained, iTunes replied that the price was set and they could remove it from the store if requested. The album remained, and it became clear who holds the power in online retail. This seems to have created a knock-on effect, and the percentage the artists sees is dwindling. Labels must maintain a good relationship with their new online distributor, so it seems they are willing to work within these pricing models, however reluctantly. Yet the services do drive consumption, which aids the live sector and merchandise - the parts of the industry which can be made tangible and bespoke. So do the majors see digital streaming as a cheap sell off to drive other consumption, pushing products like live events? Is this a devaluation that leads to small term gains? Is this false economy? 

2012 is also poised to be the year of the new online music service - more and more are trying to exploit the digitisation of music sales and distribution. Amazon Cloud Drive, Google Music and Boinc will all look to capture a share of their respective markets. Amazon and Google have a strong user base to work from, while News Corp-backed Boinc will be entering as a relative newbie. But although moving away from the physical formats will lower cost in manufacturing and distribution for the label, the shift to digital formats has seen artists getting a poor deal on digital sales - and an even poorer one on streaming. 

This week I have been charged with three readings: James Boyle’s The Public Domain (Ch. 8), Chris Anderson’s Wired article on ‘The Long Tail’ and Matt Mason’s The Pirate Dilemma (Ch. 5 & 6). The key points I took from these readings were their ideas about the online community, their behaviour and why although the notion of developing, releasing, sharing and copying comes with some negative connotations, there are those who believe in working for a cause rather than for a price.

For many years I have been a huge fan of open source. When I was 18 and built my first home computer, it was run on Linux Ubuntu - the open source operating system. When I couldn’t afford Adobe’s expensive Photoshop software, I turned to GIMP - the GNU Image Manipulation Program. While living in Ireland and working on a Brian Adams concert, I was introduced to the open source audio editing suite Audacity by a colleague who was helping with the advertisements. I’ve used Thuderbird for my email, Firefox for my Browsing, VLC as my media player... the list goes on. The fact is that open source is all around us, helping with our work processes and our media creation and consumption and essentially doing it for FREE. A Union report in 2007 (Mason p.151) claimed over £525m in voluntary work contributions are made every year by the Open Source community. 

The Open Source community is built on a simple set of functions and understandings: create, share with the community to help develop and improve, release the finished version online for download and also publish the code of the final product. But Open Source is not limited to just software. For instance, some people consider meal recipes as open source; they have been posted, amended and redistributed online in much the same way as a traditional Open Source project has. The idea is based on collaboration and development for the sake of the project itself, not an end goal of large profits and global fame. Much like Boyle (p.189) goes on the describe, the sense of creating in a community drives people to work on the projects on their own free time. But with a large social network and many people focusing on the same goals, the burden is shared. 

Not all projects are harmless fun or for general productivity, however. In 2010 a virus was called Stuxnet was discovered in the system controlling the centrifuges to Iran’s nuclear reactors. The worm was intended to shut down the cooling mechanisms of uranium enrichment facilities whilst telling its operators nothing was wrong. So why is this important? Stuxnet is an Open Source virus; the code is out there to download, amend and redeploy. Although the traditional Open Source community is not being blamed for the development of such a weaponised piece of code, it could certainly be a part of the next if such releases and programming become popular amongst the community. As of this week, a new trojan virus linked to Stuxnet named Duqu was apparently detected in a second attack. 

Similar to the Open Source community are those who contribute to a less restrictive copyright mechanism known as Creative Commons. Rather than a single project surrounded by contributors, Creative Commons allows the release of works which would be traditionally copyrighted (music, images, books, videos etc.) and lets them be posted for others to include in their own work without cost - with appropriate credits. It is a more passive collaboration - rather than the ideas of many coming together to create something, a sole creator is offered a library of resources to build from. Creative Commons is actually a non-profit organisation headed by Harvard Law professor and copyright commentator Lawrence Lessig. It is a licence process that Lessig has “made out of private and exclusive rights” (p.184) alongside the Center for the Study of the Public Domain. Boyles describes it as an alternative to traditional copyright, replacing “all rights reserved” for “some rights reserved” (p.182). Yet although it sounds like a more open copyright process, it only streamlines copyright approval features that already exist - the traditional copyright does allow for works to be used with the correct permissions granted. The saying may be “all rights reserved”, but that does not rule out the possibility for traditional copyright holders to grant some freedom of use. 

So what does Creative Commons give us as media producers? Much like our discussions around Open Source and the public domain, Creative Commons becomes a tool of the community. Rather than a replacement for traditional copyright, it is an amendment to make available some creative actions (copying, editing, posting) as long as certain rules are met. Copyright comes with lots of negative connotations, often through misunderstanding of its processes or the inherent legal implications of misusing it. The concept of Creative Commons developed to circumvent certain out-of-date copyright laws, allowing those who use relatively new technologies such as the internet an easier way of maintaining rights while granting creative freedom. Commons is an attempt to make some works more accessible to the creative industries, letting them manipulate and produce in a “remix culture” manner. 

I have focused much of this post on the creative communities and their open platforms - Commons and Open Source. In the readings from Anderson and Mason we also look at changes to online distribution and the online consumer. Anderson gives us insight into the model of distribution and how digitisation and online enterprise are changing it. Storage is cheap, and computer and internet speeds continue to increase; according to Moore’s Law, they will only continue to grow. This has allowed us to create vast online sales catalogues of media goods, eliminating the restrictions created when items formerly went “out of print”. 

The Long Tail economic theory has always been fascinating. Although we often discuss how success for an artist in the industry is to have one release that sells lots rather than lots of releases that sell some, we see that distributors who take advantage of online enterprise and increased technological performance (in speed or storage) have managed to create an income stream from the large percentage of releases that sell only some. The theory has its critics notably from Will Page of MCPS-PRS, who queries whether the Long Tail truly exists on services like iTunes. Anderson has defended his data and postures that although data from mobile music providers may not follow the trend explicitly, the theory does play out in the marketplace. Massive demand, a wide selection and high media consumption all make it possible. Self distribution and marketing are also contributors; along with social media sites and streamlined access to music aggregators, they allow easier access to independent and unsigned artists. 

Community was once defined by those around you; a group interacted locally for particular goals. With ever-increasing interconnectivity, we have all become members of a different type of community - the online community. Although Open Source communities were around before the internet came to fruition, online features have enabled a far greater range of collaboration than notable pre-internet groups such as the Homebrew Computer Club. Creative Commons has allowed those who wish to distribute their works a simple and streamlined process; rights holders can grant others an alternative licence to the restrictions imposed by traditional copyright law. Our ability to consume as individuals within online social platforms means that niche markets have become as important to distributors as the big hit makers; it is commercially important that those niches represent discussion, sharing and purchasing - enabling the Long Tail. But there can only be so much consumption; so with a rapid rise in material available to discover, what will be the knock on effect, if any, to the “hits”? Will the Long Tail ever simply become an equilibrium? And could it be possible that our new sense of community and development for mostly the greater good will spawn a wider ‘free culture’ movement, circumnavigating major labels and producing merely for the sake of consumption? 

A historic £1.2b buyout finally took place last week when Universal Music Group (who had seemingly backed out of talks) placed a final winning bid for the British music institution EMI and its recording division. But with regulatory bodies and the likes of IMPALA waiting to scrutinise the deal and its knock-on effects, is the deal well and truly done?

Anybody who has been following my posts over the past month has seen the deals go back and forth with ongoing speculation and “will they, won’t they” drama. The deal effectively moves EMI’s catalogue and assets such as Abbey Road into the ownership of Universal and French parent company Vivendi. But like all major corporate takeovers, there are still some hurdles to jump. IMPALA (the Independent Music Companies Association) had already spoken out over a large buyout and warned it would oppose any other major label’s attempts to acquire EMI. 

In a Music Week article last week, Charlotte Otter described IMPALA’s concerns and the reasons behind their strong opposition to the deal. IMPALA fear that the combination of EMI and a group such as Universal under the Vivendi flag would give an unfair market share to one label and widen the competitive gap between major labels and independents. Another side effect of the buyout could be the streamlining of departments under the Universal label, meaning potential job losses and possibly closures of some of EMI’s smaller sub-labels. IMPALA have voiced concerns about major label practices in the past, and as the article states, IMPALA have already been looking into Universal’s dealings with Live Nation, the large live events oligarch. 

IMPALA will be turning to the competition authorities to voice these concerns, but Universal stresses that the deal is not simply a move to gain power, but an effort to rescue a brand that it sees as vital to the industry itself and “breathe new life into it.” The Financial Times notes Vivendi CEO Jean-Bernard Lévy’s reminder of the Bertelsmann buyout in 2006 and his claim that this transaction would only help to create a resurgence of the great British icon. Universal CEO Lucian Grange added “We’re not bankers; we’re not private equity. Music runs through our veins” - addressing concerns surrounding EMI during its ownership by Guy Hands and his private equity firm Terra Nova. Many artists felt the corporate style of management and funding brought in under Hands’s reign led to a stifling of creativity. These issues caused artists like the Rolling Stones and Sir Paul McCartney to walk away from the label. 

These concerns are valid, and some have raised other pressing issues. James Ashton of the Evening Standard sees the greater threat to the UK’s creativity as a nation without a major music label. EMI’s talent for finding new artists and making them stars has launched many successful British acts. Now the power will lie elsewhere, with dictation coming from HQs in the USA. Again, a valid concern, but the UK has produced lots of talent without EMI. And will EMI’s directive of finding and nurturing such artists be diminished, or will its new owners demand it as part of the package they have purchased? 

One asset which the deal does not seem to threaten is Abbey Road Studios. Celebrating its 80th anniversary during the weekend of the buyout, Universal was clear to state their intentions for Abbey Road. In an article for The Independent, Grange stated:

"Abbey Road Studios are a symbol of EMI, a symbol of British culture, a symbol for the creative community. This is a historic acquisition and an important step in preserving the legacy of EMI Music. As an Englishman, EMI was the pre-eminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years."

We must also remember that Universal did not buy up EMI in its entirety. Only the recording division of EMI has gone to Universal, with the bid for the publishing side going to joint-led Sony-ATV Publishing. If regulators are happy with the move, Sony will become the largest publishing company in the sector - something IMPALA is also concerned about. The EMI catalogue is very valuable, and this seismic shift may be what the competition authorities are particularly worried about, both in the USA and EU. IMPALA’s American equivalent A2IM (the American Association of Independant Musicians) and their president Rich Bengloff stood alongside their European counterpart, stating: 

“The increased concentration of copyright ownership, historically, has always hurt the independent label community in terms of achieving economic parity and market access. We join our European Impala Independent music label colleagues in their concern over this acquisition and await more detail."

All that we know for sure is that where there were four, there are now three - the major labels and their ongoing battles for market share have entered a new phase and competitiveness between them will now be higher than ever. How Europe and its competition authorities will favour this new structure is yet to be seen, and the importance of the objections IMPALA and many similar voice may raise is not yet known. There may yet be some twists in the road ahead for the Sony-Universal-EMI love triangle...

This week’s readings are from Mark Deuze (Media Work) and Keith Negus (Music Genres and Corporate Cultures) on the interconnections between the workplace and our personal lives and how the cycle of production and consumption is converging on so many aspects of our everyday lives. They also discussed the implications of corporate intervention in the media industries.

Many of us take everyday media for granted. The digital revolution has made access to media such as music, games and films easy, and the rise of home computing and the internet has offered us a streamlined connection to it. This has brought big business into play and has created a much tighter corporate structure around the creative industries. How does an industry historically based on creativity, fickle consumer trends and risk taking suddenly become constrained by formulated corporate analysis and predictions?

To discuss this, we have to look first at the way we consumed then and the way we consume now. Before the late 1990s, consumption of media was generally in two forms: a physical medium (a CD, a newspaper, a video tape) or a broadcast (TV, radio, cinema). Our means of distributing media, be it creative or news journalism, were restricted by the technology at hand. With the popularity of the gramophone and home playback devices during the 1920s, a means of media production, sales and consumption was born. This industrial process was encouraged not solely by those involved in the music industry, but also by those involved in consumer electronics. EMI (Electric and Music Industries) was initially rival companies Columbia Gramophone and The Gramophone company. Sony is famous for its electronic products today, but its conception was via the Tokyo Tsushin Kogyo company, famous for its work developing transistor radios. Sony (alongside Phillips) were also industries leaders in format creation, creating the CD, MiniDisc, DVD and Blueray.  

For these companies, controlling the production (music, film, games, etc.) as well as the means of its consumption (technology) was a no-brainer. Essentially, the large firms became responsible for the output of much of the commercial media, releasing it on formats requiring the purchasing of hardware goods. Their earnings from the music industry itself were minor in comparison to their other business ventures, but as technology improved, consumption increased and so did the need for production. Personal playback devices became the norm with the introduction of the Sony Walkman; cars began to have stereos built in as standard and eventually the consumption of media began to invade many more aspects of our personal lives. 

With the introduction of the CD in the early 1980s, the physical format shifted from the analogue domain to the digital. The move was significant and eventually lead to increased issues with piracy due to the ease in which they could be duplicated and later ripped and shared using the new household commodity of the home computer and the introduction of the internet. New means of digital distribution began to emerge and online enterprise drove innovation. This gave greater power to the consumer and meant distribution was not only driven by marketing through advertisement and airplay, but by virtual “word of mouth”. Huge digital libraries began to grow, some by legal means such as iTunes, some by illegal, such as Napster. Organising large personal collections became simpler, and they could even be carried around in your pocket with mp3 players such as Apple’s iPod. Like Deuze (p.15) describes, technology began to aid organisation and allowed people to consume all the time (p.30). People were given new ways to gather and consume, as well as share and discuss, outside the traditional controls on the mainstream media. 

Although much power was given to the consumer in regards to choice, the personal computer became the proverbial “Trojan Horse” (Deuze p.37) for other services to invade the home and become new tools in distribution. YouTube, Soundcloud, Bandcamp, Twitter, Facebook - all these services give us ways to consume as we have discussed, but they now give the public their own ways to distribute and socialise. These businesses tap into a seemingly un-endless stream of creativity, made up of millions of contributors. Giving the public the ability to upload their talent has enabled them to become part of the industrial process of creation rather than just being for consumption. This is effectively free labour for media sites which encourage people to put their creative works online. 

The convergence of technology to amend this cycle of creation and consumption has also lead to new means of networking around particular media. Content has birthed many online communities (Deuze p.76). World of Warcraft is an example of a MMORPG creating not only a devout following but an interacting community that generates ongoing revenue through subscriptions and in-game purchasing. Facebook and Myspace were driven by sharing personal information, media such as music and video and linking to articles and news stories which may be interesting to those in their social circle. This networked socialising has also allowed for greater data analysis of web statistics, also known as web analytics. This data has become a valued commodity and is a main stream of income for companies such as Facebook. The data we share and the media we watch becomes a statistic, which in turn drives decision making for those companies who purchase that information or focus on a demographic of interest. 

This form of statistical analysis comes to suit the more historically recent corporate structure of the industry. Trends can be analysed and so can their consumption. Although sitels like Google Analytics can give out basic information on visitors, sites like Next Big Sound give comparative data to other artists and also work off social media network trends.  Labels can assess risks with data relating to demographic, locations where the artist may be popular (through popular view counts and sharing in that country) and by what medium their fanbase use to listen to the works (streaming, downloads, CD purchasing, etc.). These statistics can also aid in the management of production and consumption as Negus (p.47) discusses. Although the use of tools like Nielsen Soundscan are still important for monitoring distribution and sales figures, analytics are able to define popular trends and therefore aid in market predictability and can be important deciding factor on how much development and budget are available to a rising artist. 

Consumption is at its highest, and media can be created, marketed and distribution at low or no cost by anybody with the correct tools at home. Yet the keys to mainstream media outlets (including new internet marketing tactics such as AdWords and targeted advertising) and grand advertising budgets are still held by those who can afford it. For the artists, becoming popular online through self marketing and distribution is just as difficult as being discovered and signed in the traditional sense - though live music performances and demo tapes. For the labels, statistics like web analytics and Soundscan provide some comfort and aid in their predictability, but can also be seen as a way to avoid risks and potentially miss something or someone that could have made a significant impact through their talent alone, not just the amount of views they have on YouTube. 

I’ll leave with with a little video from Frank Zappa and his thoughts on how the music industry was changing and what his concerns were... (he goes in a weird tangent after 2 mins, but a fun watch). 

This week’s Music Week article reminded me of the ongoing problems over at EMI. The storied buy-out has been dragged out since Citigroup took control of the label from Terra Firma in February of this year. The latest reports claim that Warner Music owner Len Blavatnik has walked away from the bidding after a $1.5 billion offer was rejected by Citigroup. Bidding remains ongoing, and in an effort to recoup their £2.2 billion loss, Citigroup are willing to split the business for multiple buy-outs. So what will be left of the label when the feasting frenzy is over?

Let’s clarify who allegedly wants what: Warner Music is interested mainly in EMI’s extensive and historic music catalogue. KKR and Bertlesmann-owned BMG Rights Management is going after the publishing wing. Sony has asked for more time to whip up interest amongst its investors and is currently rumoured to be bidding on the publishing side only. Universal walked away last week after becoming the front runner in the negotiations but then apparently losing out in bidding to Blavatnik.

EMI CEO Roger Faxon was desperate not to split EMI and believes keeping it together will enable its overall value to grow. He has been rumoured to be integrating strategies between the divisions to make the split more difficult. But with no buyer willing to take on EMI as a single entity, the split looks likely. If a Warner bid is to be revived, it is likely EMI will cease to be a brand in the US market. If Sony acquires the publishing side, it will likely merge it with its own extensive works and those newly acquired from the Michael Jackson estate. 

It is also unclear where the likes of Abbey Road would lie if a split were to occur. Almost a year ago, the famous studios were under threat, with rumours of closure and sell offs. After a campaign by music fans and celebrities to safeguard the British institution, EMI held onto the site and considered touting the studio to third-party investors. Now, while its parent company dissolves, the first purpose built recording studio may find itself the unwanted furniture in the publishing v. catalogue divorce proceedings. But to many, Abbey Road is as historic and important as the 114-year-old label itself. From the technological discoveries of Alan Blumlein in the 1930s to The Beatles and Pink Floyd recordings in the 1960s, the building has a rich and important history of British innovation and creativity – one which should not be simply cast aside.

The bidding wars and rumour mills will continue while the staff and talent at EMI wait nervously for the final outcome. The Rolling Stones, Queen, Sir Paul McCartney and more recently Robbie Williams have left the label, the latter citing the ongoing turbulence as a factor in his departure. It’s difficult to see an ending that will be happy for all, especially for the likes of Terra Firma and Guy Hands who are still reeling from losing control. EMI, a brand and a symbol of the British music industry, may be torn apart and condemned to history. 

Last week, I discussed how the record and tech industries were venturing into the world of cloud computing for digital music distribution. In recent weeks we have seen the arrival of Apple’s iCloud and the leaked Google Music Locker, and we have been aware of Amazon’s Cloud Drive for a while. We have also discussed the recent integration of popular social networking site Facebook with Spotify. 

This week’s report from the cloud comes from Charlotte Otter with the impending arrival of new cloud and and online streaming service Boinc. In her article, she looks at a service with some very bold claims in how it will work. 

According to Otter, and later backed up by Boinc’s promotional video, the company is willing to pay out 70% of its revenue to artists, as well as royalties for each play. A huge promise to make when Spotify are synonymous with struggling to implement a reasonable payout structure to artists. Even more interestingly, Boinc are willing to pay royalties for any media played after being converted/imported into their platform. They don’t care where the material originally came from; its playback on their service will lead to a royalty being given. They also state they will not ask for subscription fees, there will be no adverts and users can listen as much as they like. It sounds similar to iTunes Match, but nobody is quite sure how Apple will broach the subject of illegally sourced material on their service and whether it’s a honeypot trap.

What the revenue stream is to make this possible is difficult to guess at this point, but they have already received significant investment. According to Otter, “News Corp invested $9.2m (£5.6m) for a 23% stake in Boinc in April 2010 and a further $2m in March, as part of a $77m funding round led by the charity foundation, the Wellcome Trust.”

But what must be astonishing/worrying to the likes of Amazon and Google, who are yet to secure licenses from several of the major labels, is that this new and untested service has already secured licences with Sony and Warner - the two labels the two rivals are yet to secure. Google has currently secured a licence with EMI and are in ongoing talks with Universal but not the others. Amazon simply haven’t bothered at all. Spotify have their licences, but have been known for disputes and are regularly falling out of favour with musicians and songwriters over payments. So how have Boinc achieved this on a service that isn’t planning to launch until 2012 and has no prior history in mass online distribution? They do have a powerful investor in News Corp, although this may also be thought of as a potential stain on their early reputation (due to the recent scandals in the UK and abroad). Is this another episode of a multinational media company willing to invest in music streaming services to exploit a potential revenue, or possibly just another data mining exercise using music as bait? 

It will be an interesting few weeks and months as more information about these services becomes available. I’m sure the marketing of Boinc will begin to go into overdrive as the its launch draws nearer - they are already using “Boinc’ing” as a verb and further innuendo is bound to follow. Even as a platform under development, the promises being made are sure to worry its rivals and the buzz it will create should secure a strong market penetration. No pun intended... 

The essential product being sold by the record is creativity: The use of the imagination or original ideas, especially in the production of an artistic work. Given that definition, are the rules surrounding sampling and copyright actually helping or harming the music industry?

I first would like to discuss the second reading of Mark Katz - “Listening in Cyberspace”  -and his ideas of a medium as Rivalrous and non-rivalrous. His statement of an idea as a non-rivalrous medium is important throughout this discussion of copyright and sampling. By nature, the mp3 as a digital format is a non-rivalrous form; it can be copied and transferred and not a bit of information will change. This form has allowed it to be misused and distributed freely online through Peer-2-Peer (P2P) networks and directly from user to user. This distribution, a clear breach of copyright, has yet to be successfully controlled, in particular due to the millions of “criminals” and the belief of many that what they are doing isn’t even wrong. The problem the industry faces is not only finding a suitable control without alienating their consumer base again, but educating further generations so they understand their actions. Like many copyright issues, the rules are just too blurred.  

Before the issues of mass piracy through P2P and the mp3 and before the so call “Napster Moment”, the music industry was part of a different kind of copyright battle. Sampling had become popular through new technologies and the emergence of genres based on the technique of capturing, manipulating and looping other works. This musical recycling was not a new phenomenon, but had evolved over 50 years of experimentation and innovation. Imaginary Landscape No1 (1939) by composer John Cage was an early example of this creativity. The Music Concréte (1948) movement followed, and with the arrival of analogue tape new forms of recording, sample manipulation, and significantly, composition became available. Synthesis technology gave way to new sounds and creativity, and with the popular uptake of the Moog synthesisers, the two methods of sound creation began to amalgamate. The Mellotron, the earliest form of keyboard triggerable sampler, became synonymous with the psychedelic movement of the 1960s. The Fairlight CMI digital sampler/sythesizer was hugely popular in the late 1970s and was fashioned by the likes of Peter Gabriel, Herbie Hancock and Kate Bush. The 1980s were dominated by digital samplers from the likes of Akai and Roland. The industry was booming and emerging genres emerging such as rap and electronica were leading the demand for such technology. 

Although sampling had been around for around half a century, it wasn’t until it had reached huge popularity and a mass market that it started to upset the commercial music industry. Although laws were in place during all of these movements, the 1988 copyright act stated that a “substantial part” must be copied before there is a breach (Section 16(3)(a) CDPA); something many people who went to court cited as unclear. It wasn’t until the Biz Markie vs. Gilbert O’Sullivan case (Grand Upright Music vs. Warner Bros, 1991) that a significant case of copyright infringement begin to effect the way samples were being used. The case itself had a huge effect on hip hop production and soon lead to the industrialisation of sample licensing and clearance. Although right to protect his copyright, Gilbert O’Sullivan regretted the court action and wished it could have been avoided. 

In the first reading from Mark Katz, Music in 1’s and 0’s, he intends to outline three well-referenced cases of sampling and manipulation of commercial works - Notjustmoreidlechatter, a work by composer Paul Lansky, Norman Cook’s usage of Camille Yarbrough’s “Take Yo’ Praise” for his track “Praise You” and the sample concentric composition of Public Enemy’s “Fight The Power”. 

Katz begins with a case study that focuses on creativity rather the difficult matters of copyright infringement. In a style resembling the era of Music Concréte utilising the modern day technology of digital sampling, his experimental work stemmed from his work on the C-Mix language and his musical background. His experiment with algorithmic landscapes of sounds lead to his famous Notjustmoreidlechatter - a piece comprised of speech played as if were music. This lays the benchmark for this conversation in relation to creativity vs. copyright in the sampling world. Could every voice in this composition be subject to a copyright infringement?

It is interesting that Katz moves on the the Norman Cook case study next; I believe the evolution in sampling came with Public Enemy, so I’m going to review it first. 

Katz describes Hip Hop production from 1989 - Public Enemy’s “Fight The Power”. The track contains multiple samples from other works, but these were broken down into such small pieces and looped or manipulated to distract you from the original piece of music it came from; there was no intention to steal. It was popular at the time to ‘borrow to create’ and to hark back to your influences. If you read the list of the artists sampled in this tack, there is certainly a note of pride in the black musicians featured: James Brown (and his drummer Clyde Stubblefield), Uriah Heap, Bob Marley, Guy, Trouble funk and others. This sample culture existed up until such cases as Biz Markie vs. O’ Sullivan and De La Soul vs. The Turtles. 

The Norman Cook study is a little more open and shut. It sounds far too over analysed, and it was also interesting to note the animosity towards Camille Yarbrough by the author and other critics. Yarbrough was happy for the sample to be used, was content with the creative context and, although it had a racial undertone and a personal meaning to her, she believed its message of “Praise” was being constructed in a new but decent way. Although the medium had changed slightly, it still had the same message. For Norman Cook, it served its purpose as a means to his creativity. 

The person I feel for the most is Clyde Stubblefield (aka the Funky Drummer). He is believed to be the most sampled person in commercial music. It is interesting to note that he has never received a penny from performance royalties for anything that the sample is used on (as a session musician he received a one-off fee). As he is the creator of that pattern and no other musician is in the loops he appears in, many believe he should be the sole owner of that piece and its copyright. But the copyright is not owned by him, nor by the artist he was playing for, James Brown. It is the label who own the copyright and it is they who are protecting their “product” in many of these cases.

Paul Miller’s text In Through the Out Door expresses similar beliefs in regards to “the idea” and the digital world’s exchange and engineering of ideas. Although his writing is eccentric, he is essentially trying to reach the conclusion that ideas are the stem of creativity and that those ideas should be open for manipulation and sometimes improvement so they can evolve into a new form. Can these thoughts and ideas be subjected to law and copyright? A brilliant discussion on NPR’s Science Friday programme evaluates the concept of copyrighting ideas. To hear it, click below:

NPR Science Friday - Digital Music Sampling: Creativity or Criminality

What is still unclear to me is the decision-making process behind sample clearing. I looked to Anne Harrison’s Music: The Business (p.228) for some answers. Although she gives a good account of where to start and what to do, the decision making is somewhere between the label, the artist and if third party, the songwriters and publishers. But one thing is clear: all samples must be cleared, no matter how manipulated or unrecognisable the used sample is from its original. I would like to know who really holds the power in these situations. The licensing and purchasing system of sample clearance irks of an industrial process that capitalises on a popular creative technique. Although the protection of works is important, fair use would be a mitigation factor for many of these cases, especially where works are not being purposely “stolen” or misrepresented. A blanket policy of “clear or be sued” is a simplistic attitude and one that damages potential creativity for those with a genuine artistic use. Was this due to a genuine need to protect, or did the industry spot a chance to monetise the process of sampling?

Many of those who are creating music with samplers will tell you that they are simply trying to be creative in the same way that person who played that drum pattern or that guitar part were. To hear many interviews with DJs and artists on this subject, I suggest you watch the “Copyright Criminals” documentary. 

(This is only the trailer but the full documentary is on youtube - the irony...)

As part of my Online Enterprise module, I have been asked to discuss Oxford creative cultural industries and the local clusters that have a significant impact on their economy. 

Oxford is well known for its academic stature, beautiful landscape and dreaming spires. It is a city reknowned for inspiring great writers and designers alike and is steeped in a rich history of creativity. Today, Oxford is a city for not only the classical arts but also the modern creative cultural industries such as game design, music, fashion and software engineering. But one of the greatest and oldest creative mechanisms in Oxford is its publishing sector.  

Oxford University Press (OUP) is to many the Mecca of publishing houses. It began its life in the print world during the 15th Century, initially printing bibles and scholarly media. Printing at the time operated primarily in London and select areas, so Oxford had to apply to the Crown to establish itself as an official printer. A century passed before Oxford was allowed the privelege to print what it liked. This was the beginning of Oxford’s publishing industry.

As its economy grew and publishing restrictions beagan to diminish, the attraction to Oxford as a printing hub escalate, particularly given the ease of access to academics and authors from the University. Overseas trade spurned growth in the early 20th century, and as the war had an effect on British trade, businesses in London had to shift to Oxford. Towards the end of the 20th century, further opportunities opened up with the convergence of technologies and the arrival of online enterprise. OUP is currently the worlds largest University press, printing approximately 6000 titles a year and employing over 1800 people (65% of whom live in Oxfordshire). A study by Oxford Inspires - The Economic Impact of the Cultural and Creative Industries in Oxfordshire - revealed that OUP had an annual turnover of £578m in March 2009. In addition to OUP, other major publishing groups such as Macmillan, Blackwell and Elsevier base a great deal of their operations out of Oxford. The total annual turnover for publishing in Oxford was believed to be £1.27bn in 2006, according to The Oxfordshire Publishing Cluster – Initial Scoping Study.

Although publishing is a key part of Oxford’s creative cultural industries, there are other growing clusters within the city. In a 2010 report by NESTA, The Geography of Industry,  it was highlighted that there were significant layers of overlap in creative industries such as the software, computer games and electronic publishing sectors in cities such as Oxford alongside its already strong publishing industry. According to NESTA, the report aimed to “improv[e] our understanding of the mechanisms through which creative industries contribute to regional innovative performance”. Another report conducted by Europe Innova (Priority Sector Report: Creative and Cultural Industries) has Oxford ranked 13th in Europe’s Top 25 regions for creative and cultural industries employment clusters (Power & Nielsen, p.5). 

Due to the size of the sector, Oxford has also attracted a support network for those in this industry. The Oxford Publishing Society (OPUS) aims to create a forum for members of the publishing industry in the city. It hosts networkng events and talks for its members and  encourages those involved to meet, share ideas and exchange views. It was founded by some of the largest publishers in Oxford, including Blackwell Publishers, Butterworth-Heinemann, CAB International and Elsevier Science. 

With a healthy publishing sector thriving on one of the best Universities in the world, it is not difficult to see why the academic press has been so successful in Oxford. The scholarly culture and creative clusters work well side by side and as such continue to innovate and expand. It is important to ensure that they continue to thrive and innovate, as the creative cultural industries of new and old are important to local and national economic growth. 

This week I have chosen Tim Ingham’s article on Google’s apparent plan to launch a digital music service set to rival Spotify, iTunes and similar services. The article itself is more about the rumoured announcement  Google music store is imminent, but also leads onto the discussion of how music and the internet are entering a new phase of joint enterprise. 

The integration of popular music services into other platforms is not new, but not until this year has media and music sharing been such a major playing card for sites like Facebook and Google. With media sharing becoming an important element to social networking, this deeper integration may have been inevitable. Digital music streaming services are a major talking point, especially when discussing piracy issues and artist payments (or lack of). So what does Google’s further ventures into these music services mean for the consumer and for industry professionals? 

The dominance of Google and its stronghold on the search engine market have turned “Googling” into its own term. It’s where many of us turn when looking for pretty much anything. We’ve seen how Google has driven media streams in the past: after purchasing YouTube, it went onto link video media into its search results, driving more traffic to YouTube than to any other video sharing website while also increasing Google’s own traffic.. This may give us hints to Google’s implementation, and we must now take into account both Google Music Locker and Google Plus and how they will also play a big part interlacing a music store and/or streaming service into Google’s portfolio. Although neither can be claimed as great successes so far, both have laid a significant foundation for a heavily connected social music environment, without having to adapt to work with third parties (as in the case of the Facebook-Spotify deal). Importantly, especially for those who are concerned about licensing and copyright, this will also link heavily into Google’s cloud computing plans. 

Cloud computing itself has come into the forefront of tech “chatter” over the past week. Apple’s new iOS includes the new iCloud service. Recognising that many Apple users have more than one device, this service stores much of the users’ information on an online server, sharing data and synchronising settings. But it also comes with online storage and the ability to sync your music across multiple devices (but without technically “copying” them to those devices). Amazon has also been in the news with their “Cloud Drive” service, which offers something similar. 

So with three major internet companies suddenly trying to crack the media market, we may see a better marketplace for the consumer as far as “deals” are concerned, although this is likely a bad thing for those aiming to make money by utilising these services to sell music. Currently, Apple has the edge; only it has licensing deals from the four major labels. Google and Amazon are in beta with their services while trying to secure licenses. Apple also is caching the files smartly on devices, giving the users quick access to their music, whereas Amazon must stream each file slowly and manually to the device. Apple also has an avid fan base, multiple successful product lines that can utilise the features and a store in place for purchasing. 

There is still an important question to be answered: “Will it create a viable revenue stream for the music industries?” In regards to cloud streaming, I believe it will be a source of income, though more like the pennies of Spotify than the pounds of the CD. But greater integration of music stores into search engines and social networks could create more paths for music to be purchased legally.