Wednesday, March 4, 2009
The Dancing Made Him Sad
Pancakes was making his usual rounds of the parks, watching summer turn to fall. His mother had given him his name not believing that he would survive. He was eight weeks premature and she thought his eyes looked "just as big as pancakes" when she first laid eyes on him. He paused to watch some boys playing football (the kind you actually play with your feet). He allowed himself a lugubrious moment, imagining the childhood he never had.
He sipped his coffee and listened to his head pound. Too many ales the previous evening. The opening band had been a bit odd. The White Russians -- two Belgian guys, one on drums and the other on guitar, wearing red leather trousers and wife-beaters. They seemed to be missing the point. Or were they? It may not have been art, but it certainly wasn't literature.
Music helped him survive; his body drew power from its energy. Listening to wild, angry boys playing guitar was like weight-lifting to him. He could feel the sinews of his muscles tingle with each power chord. But the dancing made him sad; he could only move that way in his head. Staying motivated was important. By keeping active he could almost will the blood to travel through his veins.
He sipped his coffee and listened to his head pound. Too many ales the previous evening. The opening band had been a bit odd. The White Russians -- two Belgian guys, one on drums and the other on guitar, wearing red leather trousers and wife-beaters. They seemed to be missing the point. Or were they? It may not have been art, but it certainly wasn't literature.
Music helped him survive; his body drew power from its energy. Listening to wild, angry boys playing guitar was like weight-lifting to him. He could feel the sinews of his muscles tingle with each power chord. But the dancing made him sad; he could only move that way in his head. Staying motivated was important. By keeping active he could almost will the blood to travel through his veins.
and now for something completely different...
If you've read this blog before and you're expecting to find my deep thoughts about CD jukeboxes and digital media... fear not! Those deep thoughts continue to flow on my company Web site, encosystems.net. We've got a slick new WordPress blog there called The Industry Insider featuring even more and deeper thoughts about the jukebox marketplace. Go there.
As for this space, I'm taking it in a new direction. Since my first love, and my only real talent, is writing -- I'm going to write. For now, I'm going to keep the format pretty loose. Movie and music reviews, thoughts on current events and business trends, maybe some sports. The name of the blog is Chris Bisha's Blog, so that's what it will be until I figure it more specifically.
As an experiment, I'm going to also offer up some original short fiction of less than 250 words that incorporates approximately 10 randomly generated words. Today's other post, "The Dancing Made Him Sad," is an example of the form. I got that list of words from some random chicks' list on Myspace of the things she likes. Feel free to leave a comment with 10 or so words you'd like to see incorporated into a vignette. I will send you some words if you want to try it out too.
I guarantee this will get interesting...
As for this space, I'm taking it in a new direction. Since my first love, and my only real talent, is writing -- I'm going to write. For now, I'm going to keep the format pretty loose. Movie and music reviews, thoughts on current events and business trends, maybe some sports. The name of the blog is Chris Bisha's Blog, so that's what it will be until I figure it more specifically.
As an experiment, I'm going to also offer up some original short fiction of less than 250 words that incorporates approximately 10 randomly generated words. Today's other post, "The Dancing Made Him Sad," is an example of the form. I got that list of words from some random chicks' list on Myspace of the things she likes. Feel free to leave a comment with 10 or so words you'd like to see incorporated into a vignette. I will send you some words if you want to try it out too.
I guarantee this will get interesting...
Monday, November 3, 2008
Your Friendly Neighborhood Jukebox
The following piece originally appeared in the September issue of Playmeter magazine, a trade journal for the coin-operated amusement industry:
Jukebox music is a shared experience. We can listen to our favorite songs as often as we'd like in our homes and on our headphones, but we are drawn to share music with the communities of people we find at our local taverns.
Traditionally, the music offered on a vinyl or CD jukebox has made a statement about the character of those taverns. Walking into a joint and finding a lot of Gretchen Wilson and Rascal Flatts on the jukebox is very different from finding the juke packed with show tunes. We learn something about the people who hang out there and we are invited, at a cost of three plays for a dollar, to be part of the community.
Recently my girlfriend and I traveled to a small town in Michigan and went to the local roadhouse to watch a Detroit Tigers baseball game with an old friend of mine. Instead of the TV sound, the jukebox was playing. Some guys were shooting pool and experimenting with the new digital machine that had recently replaced the CD jukebox. These fine fellows treated us to about 45 minutes of songs by the metal band Slayer, courtesy of the machine's central server and its "Make Mine First" feature. The barmaid apologetically assured us that this wouldn't have been possible with their previous jukebox. Old-school heavy metal didn't seem consistent with the character of the place.
Reflecting on our experience, it occurred to me that digital jukeboxes subtly, but significantly, alter our location communities. If, via downloading, virtually any song is available at any time, it makes one person's desires more important than those of the community. The character of that community is changed.
If every jukebox offers essentially infinite choices we run the risk of homogenizing the location music experience -- or at least turning the place into somebody's personal slumber party. Personally, I don't want someone to be able to play Justin Timberlake's "SexyBack" at my favorite watering hole, just like I don't want to eat at TGIFriday's when I visit Chicago.
There's no questioning the fact that the rise of digital technology has altered all forms of entertainment. The seemingly unstoppable force of digital music is changing traditional business models. The recording industry is under siege, seeking to defend itself with the blunt instrument of litigation. Music consumers hunger for the convenience and immediate gratification that digital music promises. We can't go back and we can't shut our eyes. Now more than ever it is critical that operators be wise and keep a close eye on the more subtle shifts in the jukebox business model.
Our taverns stand to lose a bit of their unique character with the advent of digital music; that is probably just a sign of the times. More importantly, operators seem to be sacrificing some of the autonomy of their locations, even as they're enjoying a net gain in the cashbox with the new technology. New so-called "intelligent music management" systems claim to select the most appropriate music for a location without operator involvement. With the shift toward cashless, card-based transaction processing, remote collection is becoming a practical reality.
At this year's ATEI trade show in London, I spoke with one digital jukebox music provider who explained that their system automatically updates tracks to fit location profiles. This representative went on to make the claim, "Never again will a customer pick a track that will ruin an atmosphere."
Music content programming has traditionally been the responsibility of the operator. Granted, the music provider I spoke with at ATEI is serving the UK and not the States, but in any centralized system the operator gives up a certain amount of control. In a television interview aired last year, a representative of one domestic jukebox music provider discussed his role in music programming for their entire network. "Our operators don't necessarily know what the hot records are. I'm that guy for all of our jukeboxes." He went on to explain that all the updates to their system are handled remotely.
Another domestic music provider claims on their Web site that they "work hard with the operators to create hard drives that contain the right mix for any demographic group." There are 18 different packages available, and those can be customized within the first 30 days the machine is on location. My sense however, is that most boxes aren't being customized; it's easier and more profitable for operators to allow patrons to program a box themselves with premium-priced, on-demand downloads from the server.
Yet another domestic music provider, as I understand it, still has a majority of its machines on location without patron Internet access to its server. These machines are deployed with hard drives that often contain the provider's entire library of songs. For their Internet-enabled machines, they offer patrons the ability to create play lists away from the location. Interestingly, their Web site describes a new feature of the operating system as follows, "Your jukebox will send you an email to anticipate problems so you can take care of business."
I'm not encouraging technophobia or trying to arouse "Big Brother" paranoia. It is, however, important to be aware that the digital age is bringing profound changes to media-based business models. Digital music is increasingly seen as an advertising-supported proposition in most markets. One domestic jukebox music supplier went so far as to describe their digital jukebox as a "Trojan horse for a media network."
Advertising has become the true prize in the competition for digital jukebox network connections. This focus on delivering a "common denominator" to advertisers will continue to homogenize the location music experience. It will also take vast amounts of information about locations and patrons out of the hands of the operator. Operators should be aware of this and consider the implications.
In another corner of the digital music world there is an interesting new development that may present some new opportunities and alternatives for jukebox music. The major record labels are beginning to embrace the concept of selling DRM-free music. That is, tracks that carry no copy-protection scheme. All four major labels agreed to supply Amazon with unprotected tracks in an effort to create a viable competitor in North America to Apple's dominant iTunes. That initiative is experiencing some success, evidenced by Amazon's announcement of a similar European venture.
In the near future there may be an opportunity for alternative jukebox business models, driven by DRM-free digital music. A proactive trade association like AMOA could conceivably negotiate an omnibus licensing agreement with the publishers and the performing-rights organizations. Such an agreement could be similar to the Jukebox License Agreement, allowing operators to acquire digital music legally from a variety of sources. For instance, tracks could be purchased at a rate determined by the number of jukeboxes licensed to an individual operator. Such an agreement would help operators maintain their autonomy and could bring down the cost of digital music.
The technology exists to support a wide variety of legal alternatives for digital jukebox music. As with most digital music business models, the most difficult hurdle for our industry is licensing. This is a critical time in the history of the jukebox business. Operators have a significant opportunity to work together to preserve the unique character of taverns and other locations. Our local watering holes should be a refuge from the relentless intrusion of advertising and its inevitable cultural homogenization. I want to go where everybody knows my name, not my demographic profile.
Jukebox music is a shared experience. We can listen to our favorite songs as often as we'd like in our homes and on our headphones, but we are drawn to share music with the communities of people we find at our local taverns.
Traditionally, the music offered on a vinyl or CD jukebox has made a statement about the character of those taverns. Walking into a joint and finding a lot of Gretchen Wilson and Rascal Flatts on the jukebox is very different from finding the juke packed with show tunes. We learn something about the people who hang out there and we are invited, at a cost of three plays for a dollar, to be part of the community.
Recently my girlfriend and I traveled to a small town in Michigan and went to the local roadhouse to watch a Detroit Tigers baseball game with an old friend of mine. Instead of the TV sound, the jukebox was playing. Some guys were shooting pool and experimenting with the new digital machine that had recently replaced the CD jukebox. These fine fellows treated us to about 45 minutes of songs by the metal band Slayer, courtesy of the machine's central server and its "Make Mine First" feature. The barmaid apologetically assured us that this wouldn't have been possible with their previous jukebox. Old-school heavy metal didn't seem consistent with the character of the place.
Reflecting on our experience, it occurred to me that digital jukeboxes subtly, but significantly, alter our location communities. If, via downloading, virtually any song is available at any time, it makes one person's desires more important than those of the community. The character of that community is changed.
If every jukebox offers essentially infinite choices we run the risk of homogenizing the location music experience -- or at least turning the place into somebody's personal slumber party. Personally, I don't want someone to be able to play Justin Timberlake's "SexyBack" at my favorite watering hole, just like I don't want to eat at TGIFriday's when I visit Chicago.
There's no questioning the fact that the rise of digital technology has altered all forms of entertainment. The seemingly unstoppable force of digital music is changing traditional business models. The recording industry is under siege, seeking to defend itself with the blunt instrument of litigation. Music consumers hunger for the convenience and immediate gratification that digital music promises. We can't go back and we can't shut our eyes. Now more than ever it is critical that operators be wise and keep a close eye on the more subtle shifts in the jukebox business model.
Our taverns stand to lose a bit of their unique character with the advent of digital music; that is probably just a sign of the times. More importantly, operators seem to be sacrificing some of the autonomy of their locations, even as they're enjoying a net gain in the cashbox with the new technology. New so-called "intelligent music management" systems claim to select the most appropriate music for a location without operator involvement. With the shift toward cashless, card-based transaction processing, remote collection is becoming a practical reality.
At this year's ATEI trade show in London, I spoke with one digital jukebox music provider who explained that their system automatically updates tracks to fit location profiles. This representative went on to make the claim, "Never again will a customer pick a track that will ruin an atmosphere."
Music content programming has traditionally been the responsibility of the operator. Granted, the music provider I spoke with at ATEI is serving the UK and not the States, but in any centralized system the operator gives up a certain amount of control. In a television interview aired last year, a representative of one domestic jukebox music provider discussed his role in music programming for their entire network. "Our operators don't necessarily know what the hot records are. I'm that guy for all of our jukeboxes." He went on to explain that all the updates to their system are handled remotely.
Another domestic music provider claims on their Web site that they "work hard with the operators to create hard drives that contain the right mix for any demographic group." There are 18 different packages available, and those can be customized within the first 30 days the machine is on location. My sense however, is that most boxes aren't being customized; it's easier and more profitable for operators to allow patrons to program a box themselves with premium-priced, on-demand downloads from the server.
Yet another domestic music provider, as I understand it, still has a majority of its machines on location without patron Internet access to its server. These machines are deployed with hard drives that often contain the provider's entire library of songs. For their Internet-enabled machines, they offer patrons the ability to create play lists away from the location. Interestingly, their Web site describes a new feature of the operating system as follows, "Your jukebox will send you an email to anticipate problems so you can take care of business."
I'm not encouraging technophobia or trying to arouse "Big Brother" paranoia. It is, however, important to be aware that the digital age is bringing profound changes to media-based business models. Digital music is increasingly seen as an advertising-supported proposition in most markets. One domestic jukebox music supplier went so far as to describe their digital jukebox as a "Trojan horse for a media network."
Advertising has become the true prize in the competition for digital jukebox network connections. This focus on delivering a "common denominator" to advertisers will continue to homogenize the location music experience. It will also take vast amounts of information about locations and patrons out of the hands of the operator. Operators should be aware of this and consider the implications.
In another corner of the digital music world there is an interesting new development that may present some new opportunities and alternatives for jukebox music. The major record labels are beginning to embrace the concept of selling DRM-free music. That is, tracks that carry no copy-protection scheme. All four major labels agreed to supply Amazon with unprotected tracks in an effort to create a viable competitor in North America to Apple's dominant iTunes. That initiative is experiencing some success, evidenced by Amazon's announcement of a similar European venture.
In the near future there may be an opportunity for alternative jukebox business models, driven by DRM-free digital music. A proactive trade association like AMOA could conceivably negotiate an omnibus licensing agreement with the publishers and the performing-rights organizations. Such an agreement could be similar to the Jukebox License Agreement, allowing operators to acquire digital music legally from a variety of sources. For instance, tracks could be purchased at a rate determined by the number of jukeboxes licensed to an individual operator. Such an agreement would help operators maintain their autonomy and could bring down the cost of digital music.
The technology exists to support a wide variety of legal alternatives for digital jukebox music. As with most digital music business models, the most difficult hurdle for our industry is licensing. This is a critical time in the history of the jukebox business. Operators have a significant opportunity to work together to preserve the unique character of taverns and other locations. Our local watering holes should be a refuge from the relentless intrusion of advertising and its inevitable cultural homogenization. I want to go where everybody knows my name, not my demographic profile.
Friday, March 7, 2008
Broader Broadband Spells Bigger Innovation Ahead
Broadband speeds will get considerably faster over the next four years, according to a research note issued Tuesday by Parks Associates. The Dallas-based group noted that more than 33 million US households will enjoy speeds of 10mbps (megabytes per second) or higher by 2012, a jump from 5.7 million currently. This increased speed is a critical ingredient for continued innovation from companies leveraging internet-based technologies, particularly music, video and game delivery.
Research like this supports my contention that, as we move through the digital maturity process, technology that delivers content to jukeboxes will inevitably change. For instance, faster throughput, higher capacity and greater reliability in the broadband infrastructure will make streaming technology feasible and viable. And as DRM-free, unprotected music files become the industry standard, more digital music options will become available to operators. (I was interested to note that Amazon's MP3 store now offers DRM-free music from all four major labels.)
According to the Parks associates report, just 9% of households are currently wired with 10mbps or faster broadband service. But users are thirsty for extra bandwidth, and ISPs are likely to satisfy the demand. This increased speed will obviously be available to locations, as well. Cable companies like Comcast and Cox are upgrading their cable infrastructure and AT&T is busy laying miles of new fiber in an effort to compete with the cable companies. 10mbps is coming soon to locations on every operator's route.
Fattening pipes will power a continued surge of innovation in music, video and gaming. The next four years will likely see a dramatic shift in technology delivering content to locations. Operators will do well to keep their eyes on this dynamic and rapidly changing environment and be ready to take advantage of new opportunities. Be aware that the contracts and hardware you commit to today might not support the profitable technologies of tomorrow.
Research like this supports my contention that, as we move through the digital maturity process, technology that delivers content to jukeboxes will inevitably change. For instance, faster throughput, higher capacity and greater reliability in the broadband infrastructure will make streaming technology feasible and viable. And as DRM-free, unprotected music files become the industry standard, more digital music options will become available to operators. (I was interested to note that Amazon's MP3 store now offers DRM-free music from all four major labels.)
According to the Parks associates report, just 9% of households are currently wired with 10mbps or faster broadband service. But users are thirsty for extra bandwidth, and ISPs are likely to satisfy the demand. This increased speed will obviously be available to locations, as well. Cable companies like Comcast and Cox are upgrading their cable infrastructure and AT&T is busy laying miles of new fiber in an effort to compete with the cable companies. 10mbps is coming soon to locations on every operator's route.
Fattening pipes will power a continued surge of innovation in music, video and gaming. The next four years will likely see a dramatic shift in technology delivering content to locations. Operators will do well to keep their eyes on this dynamic and rapidly changing environment and be ready to take advantage of new opportunities. Be aware that the contracts and hardware you commit to today might not support the profitable technologies of tomorrow.
Friday, February 15, 2008
Essential Jukebox Qualities
If you're involved with music, check out a site called digitalmusicnews.com. Read their top stories and you'll see that there is a vicious, blood-thirsty battle being waged over how music will be delivered to us and how the interested parties will get paid. Now that jukeboxes are beginning to go digital, they are just a tiny part of this vast commodity market. And keep in mind that digital music is in its formative years; formats will likely change before a standard is established.
How can the jukebox distinguish itself in this cutthroat world of music overload? I believe there are two unique qualities of the jukebox that have established it as an icon of American culture: compelling designs and unique features. Our industry may have lost sight of these qualities in its rush to embrace an evolving technology and an uncertain business model.
Industrial design has always been a vital part of the jukebox music experience. Jukeboxes have a presence in a location and strongly influence its decor and vibe. The Wurlitzer 1015 "Bubbler" is still the undisputed standard-bearer of jukebox industrial design. One of my personal favorite designs is the extremely rare "Yellow Submarine" model that Rock-Ola made to honor the Beatles' beloved cartoon feature film.
Today, the jukebox business is more about selling music and software and less about noteworthy design. I recall jukebox legend Glen Streeter remarking that he didn't want Rock-Ola to be a software company. "I want to build jukeboxes," he told me. Another jukebox luminary, my colleague Joel Friedman, echoed Streeter's sentiments. "The AMOA Expo used to be built around the introduction of new jukeboxes. Manufacturers have gotten away from the glitz and glamor of design. The jukebox has become a glorified radio station. Have jukebox manufacturers forgotten to manufacture jukeboxes?"
In the early 1990's, the industry was in the process of making a wholesale shift from vinyl 45-rpm records to compact discs. The new machines were revolutionary in their incorporation of album cover art into their designs. The sexy new technology and the innovative new graphic element fueled a jukebox renaissance. Sales soared and jukeboxes were welcomed into new upscale locations.
Today's new machines, while technologically advanced, lack a compelling design aesthetic. They tend to have the sterile feel of an ATM, with serviceable and dull cabinets. Their touch screens don't have the tactile intimacy of buttons and they've lost the captivating mechanical element of whirring gears and spinning discs. In a world increasingly dominated by computers, we want our jukeboxes to be warm and inviting with a friendly glow of nostalgia.
Despite their industrial design shortcomings, one of the great promises of digital machines is their potential to harness new technology to enhance the jukebox experience. A good example is TouchTunes' online affinity network, mytouchtunes, that allows users to create and share playlists. But for the most part, the digital jukeboxes available in the US have very similar software platforms, user interfaces and graphic themes. It seems that much of the technology being integrated is in the interest of gathering information about people in order to sell their eyeballs to advertisers.
At ATEI I was introduced to an intriguing new jukebox feature. I visited with Simon Davis, whose company, Soundnet, is a music provider to digital jukeboxes in the UK and Europe. Soundnet has developed a new proprietary technology they call Trackdial that allows customers to select and pay for jukebox tracks using a mobile phone. The technology delivers all the facilities of the jukebox via a WAP-based mobile phone interface. WAP stands for "Web application protocol," and it enables access to the Internet from a mobile phone or PDA (think Windows Mobile). Customers can play the machine from areas currently not served by a coin slot such as sitting, smoking and even in the rest room. Mobile selection allows for multiple simultaneous users, as opposed to one person at a time in front of the machine. No cash is required, as all plays are charged to the customer's mobile phone bill.
Davis talked about how Trackdial can enhance the unique character of a location. "One of the great things about Trackdial is that it can be personalized to the pub, bar or club. Not only will customers receive a message to welcome them and inform them about the service, Soundnet can also create venue-specific track selections to maintain the familiar feel of the location and drive music sales and footfall."
Trackdial also allows customers to purchase tracks and ring tones that are delivered directly to their mobile phone. This could well become an attractive jukebox feature in the US, as labels continue to look for new ways to deliver legal, paid downloads to music fans.
Jukebox music is an event shared by people. We can listen to our favorite song as often as we'd like on our headphones, but we are drawn to share music with the communities of people at our local taverns. New digital jukeboxes need to do more than increase revenues; they need to inspire people and encourage a greater number of plays. In our tech-savvy digital world, pay-per-play location music can do a better job of distinguishing itself from the seemingly limitless noise pollution in our lives. Bringing digital technology into the jukebox world is inevitable, but let's make sure that it has the soul that we love about vintage jukes. In a world of iPod nights, 120-gig hard drives and satellite radio, let's not forget the importance of compelling industrial design and cool features that enhance the shared experience of jukebox music. As Joel Friedman says, "Remember, a jukebox must be a jukebox first."
How can the jukebox distinguish itself in this cutthroat world of music overload? I believe there are two unique qualities of the jukebox that have established it as an icon of American culture: compelling designs and unique features. Our industry may have lost sight of these qualities in its rush to embrace an evolving technology and an uncertain business model.
Industrial design has always been a vital part of the jukebox music experience. Jukeboxes have a presence in a location and strongly influence its decor and vibe. The Wurlitzer 1015 "Bubbler" is still the undisputed standard-bearer of jukebox industrial design. One of my personal favorite designs is the extremely rare "Yellow Submarine" model that Rock-Ola made to honor the Beatles' beloved cartoon feature film.
Today, the jukebox business is more about selling music and software and less about noteworthy design. I recall jukebox legend Glen Streeter remarking that he didn't want Rock-Ola to be a software company. "I want to build jukeboxes," he told me. Another jukebox luminary, my colleague Joel Friedman, echoed Streeter's sentiments. "The AMOA Expo used to be built around the introduction of new jukeboxes. Manufacturers have gotten away from the glitz and glamor of design. The jukebox has become a glorified radio station. Have jukebox manufacturers forgotten to manufacture jukeboxes?"
In the early 1990's, the industry was in the process of making a wholesale shift from vinyl 45-rpm records to compact discs. The new machines were revolutionary in their incorporation of album cover art into their designs. The sexy new technology and the innovative new graphic element fueled a jukebox renaissance. Sales soared and jukeboxes were welcomed into new upscale locations.
Today's new machines, while technologically advanced, lack a compelling design aesthetic. They tend to have the sterile feel of an ATM, with serviceable and dull cabinets. Their touch screens don't have the tactile intimacy of buttons and they've lost the captivating mechanical element of whirring gears and spinning discs. In a world increasingly dominated by computers, we want our jukeboxes to be warm and inviting with a friendly glow of nostalgia.
Despite their industrial design shortcomings, one of the great promises of digital machines is their potential to harness new technology to enhance the jukebox experience. A good example is TouchTunes' online affinity network, mytouchtunes, that allows users to create and share playlists. But for the most part, the digital jukeboxes available in the US have very similar software platforms, user interfaces and graphic themes. It seems that much of the technology being integrated is in the interest of gathering information about people in order to sell their eyeballs to advertisers.
At ATEI I was introduced to an intriguing new jukebox feature. I visited with Simon Davis, whose company, Soundnet, is a music provider to digital jukeboxes in the UK and Europe. Soundnet has developed a new proprietary technology they call Trackdial that allows customers to select and pay for jukebox tracks using a mobile phone. The technology delivers all the facilities of the jukebox via a WAP-based mobile phone interface. WAP stands for "Web application protocol," and it enables access to the Internet from a mobile phone or PDA (think Windows Mobile). Customers can play the machine from areas currently not served by a coin slot such as sitting, smoking and even in the rest room. Mobile selection allows for multiple simultaneous users, as opposed to one person at a time in front of the machine. No cash is required, as all plays are charged to the customer's mobile phone bill.
Davis talked about how Trackdial can enhance the unique character of a location. "One of the great things about Trackdial is that it can be personalized to the pub, bar or club. Not only will customers receive a message to welcome them and inform them about the service, Soundnet can also create venue-specific track selections to maintain the familiar feel of the location and drive music sales and footfall."
Trackdial also allows customers to purchase tracks and ring tones that are delivered directly to their mobile phone. This could well become an attractive jukebox feature in the US, as labels continue to look for new ways to deliver legal, paid downloads to music fans.
Jukebox music is an event shared by people. We can listen to our favorite song as often as we'd like on our headphones, but we are drawn to share music with the communities of people at our local taverns. New digital jukeboxes need to do more than increase revenues; they need to inspire people and encourage a greater number of plays. In our tech-savvy digital world, pay-per-play location music can do a better job of distinguishing itself from the seemingly limitless noise pollution in our lives. Bringing digital technology into the jukebox world is inevitable, but let's make sure that it has the soul that we love about vintage jukes. In a world of iPod nights, 120-gig hard drives and satellite radio, let's not forget the importance of compelling industrial design and cool features that enhance the shared experience of jukebox music. As Joel Friedman says, "Remember, a jukebox must be a jukebox first."
Friday, February 8, 2008
Music Sales Take a Beating in 2007
Album Sales Drop 15 Percent in US
The US-based recording industry suffered a steep decline in 2007. The tracking firm Nielsen Soundscan reported album sales declines of 15% for the year. Nielsen counted albums sales of 500.5 million units during 2007, a marked decrease from 2006 sales of 588.2 million units.
More specifically, Nielsen reported a 19% decline in CD sales, the record industry's primary product. This represents a faster than expected decline of physical-format sales.
Digital albums are also included in the total album tally (10 digital tracks equals one album), although their impact was modest. During 2007, digital album sales increased 53% to 50 million units, and Internet-based physical album purchases were up 2.4% to 30.1 million.
In terms of top sellers, Josh Groban grabbed first-place honors with album sales of 4.8 million, followed by Hannah Montana (3.9 million), The Eagles (3.6 million), and Carrie Underwood (3.2 million).
Similar Story Worldwide
In Canada, album sales dropped 9.5% to 41.8 million units for 2007, according to Nielsen. Digital album sales nearly doubled to 1.98 million units, up from 1.0 million in 2006. Individual digital track sales increased 73% to 25.8 million units.
In the United Kingdom, total album sales dropped 10% last year, according to trade group BPI. British downloads continued to grow, with paid downloads totaling 77.6 million, up 47.7% from a 2006 total of 52.5 million.
According to British publication The Economist, global estimates of the decline of physical-format sales range from a 6% decrease in the UK, 9% in Japan, France and Spain, 12% in Italy, 14% in Australia, down to 21% in Canada.
Universal Commands Top Marketshare
According to album-specific figures released by Nielsen Soundscan, Universal Music now controls a share of 31.9%, up from a year-ago share of 31.61%. In second-place is Sony BMG, with a 24.97% share, down from a year-ago figure of 27.44%. In third, Warner Music increased to 20.28%, up from 18.14% in 2006. Last place goes to EMI which fell to 9.37%, down from their year-ago figure of 10.20%. Interestingly, independent labels improved to 13.48%, up from 12.61% in 2006.
Paid Download Sales Plateauing?
Paid downloads clearly gained last year, though concerns of a plateau remain. According to Nielsen Soundscan, paid downloads reached 844.2 million units in 2007, a 43% jump over the 2006 total of 581.9 million. The 2006 number represents a 65% gain over 2005 sales of 352.7 million paid downloads.
Most worrisome is the fact that absolute gains are showing softness. In 2007 paid downloads increased 262.3 million, just slightly higher than the 2006 increase of 229.2 million. Paid download performance was similarly flat in the UK where absolute gains were approximately 25 million in 2006 and 2007.
In any case, there is general agreement among music industry experts that the increase in paid downloads is not adequately compensating for the decline in sales of CD's.
New Year, Same Problems
2008 isn't starting out any better for the major labels, as first-week sales continued last year's downward trend. For the period ending January 6th, year-over-year album sales were down nearly 4%, again according to Nielsen Soundscan. Specifically, album sales totaled just over 9 million units, 3.7% below year-ago performance. Within that total, physical-format sales of CD's declined 16% to 6.14 million units.
Predictably, the digital story continued to show improvement. Paid downloads jumped 31.9% to 28.4 million, a figure boosted by iTunes Store gift cards and new iPod owners.
There is no denying the music business is embroiled in a massive downturn.
The US-based recording industry suffered a steep decline in 2007. The tracking firm Nielsen Soundscan reported album sales declines of 15% for the year. Nielsen counted albums sales of 500.5 million units during 2007, a marked decrease from 2006 sales of 588.2 million units.
More specifically, Nielsen reported a 19% decline in CD sales, the record industry's primary product. This represents a faster than expected decline of physical-format sales.
Digital albums are also included in the total album tally (10 digital tracks equals one album), although their impact was modest. During 2007, digital album sales increased 53% to 50 million units, and Internet-based physical album purchases were up 2.4% to 30.1 million.
In terms of top sellers, Josh Groban grabbed first-place honors with album sales of 4.8 million, followed by Hannah Montana (3.9 million), The Eagles (3.6 million), and Carrie Underwood (3.2 million).
Similar Story Worldwide
In Canada, album sales dropped 9.5% to 41.8 million units for 2007, according to Nielsen. Digital album sales nearly doubled to 1.98 million units, up from 1.0 million in 2006. Individual digital track sales increased 73% to 25.8 million units.
In the United Kingdom, total album sales dropped 10% last year, according to trade group BPI. British downloads continued to grow, with paid downloads totaling 77.6 million, up 47.7% from a 2006 total of 52.5 million.
According to British publication The Economist, global estimates of the decline of physical-format sales range from a 6% decrease in the UK, 9% in Japan, France and Spain, 12% in Italy, 14% in Australia, down to 21% in Canada.
Universal Commands Top Marketshare
According to album-specific figures released by Nielsen Soundscan, Universal Music now controls a share of 31.9%, up from a year-ago share of 31.61%. In second-place is Sony BMG, with a 24.97% share, down from a year-ago figure of 27.44%. In third, Warner Music increased to 20.28%, up from 18.14% in 2006. Last place goes to EMI which fell to 9.37%, down from their year-ago figure of 10.20%. Interestingly, independent labels improved to 13.48%, up from 12.61% in 2006.
Paid Download Sales Plateauing?
Paid downloads clearly gained last year, though concerns of a plateau remain. According to Nielsen Soundscan, paid downloads reached 844.2 million units in 2007, a 43% jump over the 2006 total of 581.9 million. The 2006 number represents a 65% gain over 2005 sales of 352.7 million paid downloads.
Most worrisome is the fact that absolute gains are showing softness. In 2007 paid downloads increased 262.3 million, just slightly higher than the 2006 increase of 229.2 million. Paid download performance was similarly flat in the UK where absolute gains were approximately 25 million in 2006 and 2007.
In any case, there is general agreement among music industry experts that the increase in paid downloads is not adequately compensating for the decline in sales of CD's.
New Year, Same Problems
2008 isn't starting out any better for the major labels, as first-week sales continued last year's downward trend. For the period ending January 6th, year-over-year album sales were down nearly 4%, again according to Nielsen Soundscan. Specifically, album sales totaled just over 9 million units, 3.7% below year-ago performance. Within that total, physical-format sales of CD's declined 16% to 6.14 million units.
Predictably, the digital story continued to show improvement. Paid downloads jumped 31.9% to 28.4 million, a figure boosted by iTunes Store gift cards and new iPod owners.
There is no denying the music business is embroiled in a massive downturn.
Tuesday, November 6, 2007
Subscription Service for Jukebox Music
New schools of thought in the music industry suggest that a subscription service is becoming a more attractive option for digital jukebox music. Under a subscription model, operators would still contract with a music provider for access to digital music. However, this model would differ from the current one in that the operator would pay a flat monthly fee per jukebox, instead of paying the music provider as much as 20% of gross revenue per box. For this flat rate the jukebox would have access to all songs on the music service. Music would be streamed via a broadband connection. I like this model and think it would have benefits for our industry.
Subscription services are becoming more popular in the broader consumer digital music market. Napster and Rhapsody are now subscription services. I subscribed to Yahoo!'s Music Unlimited service earlier this year. The service costs $6 a month and requires the Yahoo! Music Jukebox player software. As a subscriber I can listen to any of the 2 million-plus songs in their library, streamed to my computer. I can purchase tracks at a reduced price (typically $0.79, $9.99 for albums) which I keep even if my subscription lapses. Purchased tracks can be transferred to a portable device or burned to a CD. I have found Yahoo!'s catalog deep and rich, covering more genres than I knew even existed. It's been rare that I haven't found something I've been looking for. (Note: Since this post, Yahoo! has sold this music service to Rhapsody.)
Record labels, weary of slumping CD sales and the erosion of profits, have seen the writing on the wall for the traditional distribution model and seem to be warming to the idea of a subscription model. Non-traditional label insiders contend that a subscription model is the best hope for a crumbling industry. Legendary producer Rick Rubin, famous for reinvigorating Johnny Cash's career, was recently hired by Sony to co-head Columbia Records and made this assessment of his new employer and the industry in the New York Times:
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Rubin went on to say that he believes the subscription model is the only way to save the music business. He contends that if music is easily available at a price of five or six dollars a month, piracy could be drastically reduced.
For the subscription model to be effective in the consumer digital music market, all the record companies will have to agree. The so-called "big four" -- Sony BMG, EMI, Universal and Warner -- have been in rabid competition for years and haven't shown much willingness to play nice together. We'll see how this plays out.
Any of the current subscription services' music libraries would work for the coin-op industry, but public performance rights would also have to be secured with the performance rights organizations (PROs) -- BMI, ASCAP and SESAC. This would be no small task.
The subscription model would benefit the operator by taking the music provider out of the collection process. The operator would be back in an autonomous relationship with the location. He could set play pricing and commission splits. He could even operate machines on a cash-only basis if he so desired. It would also benefit the music provider by creating predictable revenue streams. Even the record labels might be happier, since music would be streamed to the jukebox with no copy remaining on the juke's hard drive.
Certainly, there are some significant hurdles that need to be cleared before a subscription service is viable for our industry. Encouragingly, an open, third-party music source is the official position of the AMOA. Its jukebox subcommittee is pursuing this option in its ongoing dialog with the PROs.
Check out one of the subscription services and see if you think a version of the model would be good for the coin-op industry. I'd like to hear more opinions on the subject.
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