The Album Bundle Wars

A screenshot of the Jonas Brother's Store, where you can album bundle with items such as a tote bag and mug.
A Screenshot of the Jonas Brothers Online Store

It’s been a while, but I’m back to talk about album bundles –because artists and labels are doing everything they can to seize chart positions and earn RIAA statuses.

I’m not going to get into specifics of what constitutes an album bundle because it’s been exhausted.

Instead, I want to take you back to a different time.

A time where bundling an album with a t-shirt or poster meant having a CD, including it in package, and mailing that package to the buyer.

The idea of bundling comes from a time period where creating an album had unavoidable physical cost. If I was making shirts for $7.00 a pop and creating CDs for $1.50 a piece, I needed to make sure that the t-shirt sold at a price that exceeded my expenses, and that the CD was selling for at least the Published Price to Dealer or Suggested Retail Price. The money paid out to performers and writers relied on selling the album at an agreed upon price, and undervaluing the CD affected artist and label revenue.

Now, let’s come back to the present.

The breakdown of units sold overwhelmingly skews towards stream-equivalent sales.

People just really aren’t buying albums –and for good reason.

$9.99/one album v. $9.99/every album.

It’s just not viable for the vast majority of music consumers to buy every new project they are interested in, and that’s why “pure sales” are lower than ever. Even for huge artists.

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RIAA Platinum The Life of Pablo Album Cover

What’s an Album Sale to the RIAA in the Digital Era?

The “Living, Breathing Album”

On February 1st of 2016, the RIAA announced that streaming would contribute to Gold and Platinum certifications for albums. Since 2013, on-demand streaming had already counted towards the Gold and Platinum status of tracks released as singles, but the addition of streaming to “album sales” meant a new chance for artists to achieve the most coveted RIAA awards.

13 days later after the RIAA updated their stance on stream-equivalent sales, Kanye West released The Life of Pablo as a streaming-only, Tidal-exclusive album. Aside from the fact that Kanye had never released an album without physical copies, The Life of Pablo was peculiar for another reason: it received numerous updates weeks after its initial release.

As noted by XXL, Kanye was still updating and changing aspects of The Life of Pablo as late as June 17th 2016, 4 months after the album’s original release date. Some changes were as minor as different EQing. Other changes, like including Vic Mensa and Sia on “Wolves,” were more drastic. Kanye had stated that the project would be a “a living breathing changing creative expression [of] #contemporaryart,” and The Life of Pablo certainly lived up to his claim.

A year after its release, the album would become the first streaming-only album to go platinum (if you ignore the .07% of sales that came from the brief download option offered on Kanye’s site). However, the effect of what a “living, breathing album” would have on RIAA certification going forward was perhaps an even bigger deal for the music industry.

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YouTube Music: Streaming Around The Law

YouTube Music

In November, Google became an even more formidable player in the music streaming market by launching two new services: YouTube Red—an ad-free subscription service—and YouTube Music, an audio-focused version of the YouTube app. With Google’s global audience, YouTube’s movement into the streaming industry is bad news for other giants like SoundCloud, Spotify, and Apple Music. While services like Apple Music and Spotify boast huge catalogs of songs, these industry-focused platforms lack the mixtapes, remixes, and user-submitted tracks that make SoundCloud and YouTube popular. Relying on user-submitted content since the start, YouTube has evolved into a unique position that gives Google far more flexibility with copyright laws than other services. Google blatantly has an advantage –especially when comparing YouTube’s success with the downfall of SoundCloud. YouTube’s massive market share has created a situation where Google is practically immune from the dangers posed by copyright infringement, giving Google an advantage over competing music services. Furthermore, as a video and music platform, YouTube’s ad-free subscription provides value beyond music alone, offering customers an irreplaceable, commercial-free experience on the world’s most popular video platform as well. If YouTube is going to enter the music streaming space legitimately, Google needs to follow the same rules as its competitors.

For $9.99 a month, YouTube Red lets customers enjoy an ad-free YouTube experience while also giving users access to the Google Play Music catalog. In a one-two punch, Google launched YouTube Music shortly after Red, allowing users to stream audio-only versions of videos and explore music more intuitively. With a subscription to YouTube Red (there’s a 14-day free trial for users who download YouTube Music), listeners can use the YouTube Music app to save songs for offline listening, play content in the background on mobile, and stream audio-only versions of videos. For users who already rely on YouTube to fit their streaming needs, audio-only mode is a crucial development. Reducing unnecessary data consumption is essential for customers with expensive cellphone plans, and removing video from streams will save heavy YouTube users GBs of data per a month. Users can still use YouTube Music without YouTube Red, but a free plan prevents mobile listeners from playing audio in the background, limiting the usefulness of the service.

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So Many Packages

Photo from : https://c1.staticflickr.com/9/8231/8394217408_a7a722de3c_b.jpg

Photo from : https://c1.staticflickr.com/9/8231/8394217408_a7a722de3c_b.jpg

It seems silly, but there’s a problem in the United States surrounding online shopping. The rise of services like Amazon have already had a harsh effect on retail storefronts, but now, the problem has reached the postal industry. As noted in a recent article by the Wallstreet Journal, the surge of parcels from online retailers has created new issues for property managers. Aside from the issue of storing an apartment building’s worth of packages, real estate companies now need to devote an increasing amount of their personal funds to handling deliveries. In recent years, different businesses have implemented a variety of solutions to fix this problem. Amazon set up delivery lockers in partner locations across the United States, and the company continues to push the frontier of online shopping with same day delivery and third party parcel services. Services like Fedex and UPS changed the mail industry when they began to deliver mail, and the rise in online shopping presents another turning point for the delivery industry.

Amazon’s same-day delivery service has caused a lot of controversy since its launch. In a Forbes article from June, Tom Ryan quotes some generally differing responses to Amazon’s move. According to Chris Petersen

“It is a differentiator that will be difficult to replicate because it requires substantial infrastructure, systems and processes which are not easily created overnight. … If there ever was a wake-up call for brick-and-mortar, this should be it. If you can’t match free same-day delivery, you had better deliver over-the-top customer experience in your stores.”

Petersen seems to believe that store-front operation in major cities will face the wraith of Amazon’s new delivery service the quickest. Amazon has already set up warehouses in some of the country’s most active delivery locations, and same-day delivery will certainly put increasing pressure on box stores and general stores to compete. However, rural areas will continue to maintain during this explorative period in the delivery industry. Amazon does not yet have the infrastructure to offer these expedited shipping options everywhere. That being said, rural retailers should certainly contemplate how they might compete in the future.

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A Pay-Optional Culture

Napster Logo

The introduction of the internet to mainstream culture changed content distribution fundamentally. Napster’s notoriety made the public aware that the web could be a tool for sharing audio, video and text files across the world, but slow internet connections prevented P2P sharing from becoming an efficient replacement for purchasing content.

The print industry was hit hard by this change. The online news space became crowded with free options, and print publications –especially local ones– were too slow to adjust. Web advertisements grew in importance as the overall revenue from print ads declined with decreased circulation and subscriptions. A 2015 Pew report graphs the sad state of affairs in terms of annual revenue generated by newspapers both online and in print. Total revenue is down, and online advertisements are not generating enough profit to offset the money lost from print advertisements.

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Amateur DJs Are Keeping Music Alive

Photo from http://cdn.slashgear.com/wp-content/uploads/2011/07/numark_idj_live_2-580x426.jpg

Photo from http://cdn.slashgear.com/wp-content/uploads/2011/07/numark_idj_live_2-580×426.jpg

Since the introduction of programs like Serato and Traktor, the profession of DJing has changed significantly. The expense of records, mixers, and turntables prevented most people from trying the craft, but digital solutions completely destroyed this barrier. Instead of spending thousands on records and equipment, DJs could digitally purchase the tracks they wanted and mix these songs with a cheap MIDI controller. The accessibility of digital mixing tools has created a surge of amateurs, and existing DJs have  seen their profession saturated with beginners willing to perform for less. However, while this situation is not ideal for professional DJs, the rise in amateur DJs is great for the music industry.

As streaming solutions continue to increase in popularity, music sales will keep declining. Music sales still have one key advantage though: the customer receives the file. While this difference does not mean a lot to the average consumer, it does mean something for DJs. Maintaining an up-to-date and extensive library is essential for professional DJs, and streaming solutions cannot replace an organized collection of .wav and MP3 files. Services like Pulselocker have attempted to bridge the gap between streaming and offline music collections, but limitations –such Pulselocker’s size constraints for offline libraries– still hinder streaming’s viability for DJs.

In order to reduce bandwidth expenses for both the consumer and service provider, streaming services also enlist compression algorithms  A Time’s article from March of 2014 (pre-Apple Music and Tidal) broke down the various bitrates across different streaming platforms. Looking at the charts, not a single service streams with lossless compression, meaning that consumers, at the most, are listening to MP3-quality files. Once again, this compression does not mean much for the average consumer, who might bot even be able to tell the difference between different quality streams. For DJs, however, high quality files are integral for maintaining the upmost sound quality on large systems. Hoping to capitalize on the lack of lossless streaming services, Jay-Z’s Tidal entered the music space earlier this year, boasting uncompressed, 1411 KBPS streaming. Tidal does not integrate with any digital DJ programs though, making it an unlikely solution for DJs maintaining a large song collection. Pulselocker has software integration tools, but the quality is only 320 KBPS, leaving room for improvement. Pulselocker is on the right track with offline song use and DJ software integrations, but the service’s limited catalog and lossy streaming will limit widespread adoption for the foreseeable future.

Professional DJs have witnessed their craft flooded with amateurs, but hopefully these same amateurs can help the music industry as a whole. Amateurs have undoubtedly saturated the profession of DJing to a point where many music fans no longer appreciate the skill that goes into mixing tracks, but amateurs might also prove to be the only music listeners who actually buy music. Record labels would be wise to cater to the aspiring DJ demographic –especially younger DJs who’s music-purchasing habits are still very impressionable. If labels can convince young DJs that purchasing music is better than streaming or pirating, the music industry might be able to maintain a small, but active group of listeners who consistently purchase music. While it is easy to empathize with professionals who are constantly undercut by amateur DJs, these amateurs have the potential to help record sales in a culture where people don’t buy albums.

 

There Can Be Only One: A Game of ‘Hoverboards.’

Hoverboard or Hovertrax?

“Hoverboys run L.A.!”

These are the words my friend Chris shouted as he glided around the living room on a Hovertrax, a self-balancing device that looks like the bastard child of a Segway and skateboard. With countless celebrity endorsements, “hoverboards” seem to be everywhere these days, yet despite their popularity, their origin is unknown to most consumers.

Where did these hoverboards come from?

David Pierce at Wired magazine made a valiant attempt to get to the bottom of the hoverboard mystery back in June. In the article, David comes to the conclusion that most boards on the market are knockoffs of Chic Smart S1, which appeared in August of 2014, donning blue L.E.D.s and the letters “IO.” Chic brought the product to the Canton Fair, a semi-annual trade show in China, where the hoverboard devices were overwhelmingly popular and sold out quickly. It did not take long for other companies to reverse engineer and rebrand the products, and within the next few months, boards could be found on Alibaba for wholesale distribution.

If you hit your favorite social media platform, chances are you’ll see some rendition of the Chic Smart S1. PhunkeeDuck and IO Hawk are arguably the biggest players in the American hoverboard industry currently, and as David Pierce astutely notes, “Chic’s logo—the horizontal line on top of an oval that just so happens to look like “IO” when rotated 90 degrees—is plastered all over most versions of the board.” Continue reading