Monster Loop

Reader E-Mail: Illogical Posts & Digital Piracy

Patrick Henry — Fri, 23 Dec 2011 21:18:23 +0000

We received the following two emails, which we found quite interesting. Here’s the first:

“The very crux of your writing, while appearing reasonable originally, did not really sit perfectly with me after some time. Somewhere, throughout the sentences, you actually managed to make me a believer – but only for a very short while. I still have a problem with your jumps in logic and one might do well to help fill in those gaps. If you actually can accomplish that, I will surely end up being fascinated.”

Moncler Spaccio

{a link was then pasted that took us to a page containing brief biographical information about Mr. Spaccio, including the fact that “Moncler Spaccio” is actually one of several pseudonyms for “Refugio Rogers”}

We have the following response to Moncer Spaccio a/k/a Refugio Rogers, etc.

Mr. Spaccio/Rogers,

The crux of your email, while congenial on the surface, did not sit well with us after we took a moment to reflect upon it’s meaning. You did manage to get us to consider your observation – but only for a very short while. You see, we have a problem with your jumps in logic; perhaps you could kindly help fill in those gaps.

First, what, precisely, is so illogical in our post that caused you discomfort? Monster Loop is greatly concerned with the comfort of its readers, and we always welcome honest feedback. It’s possible that certain of our analysis is flawed – it wouldn’t be the first time, or the last. Perhaps you could elaborate by identifying the statement with which you disagree. That is generally a useful starting point. Oh wait – you’re a spammer, right?

Second, your name (Moncler Spaccio) is quite unique; were you named after an Italian Jacket? Perhaps you would like for Monster Loop to purchase a Moncler? We are touched by your concern for our warmth and safety. It is, indeed becoming cold in Chicago.

Third, related to this last point, is your name actually “Refugio Rogers,” as suggested by the website you directed us to? A great name … Refugio Rogers … It reminds one of some classic adventure story penned by Dickens or Robert Louis Stevenson. Bravo! Coincidentally, we stumbled upon a series of internet posts drafted by a “Refugio Rogers” – we assume this is you?

On February 20, 2011, for example, Refugio Rogers posted on the website of an Atlanta Floor Cleaning business:

NO MESS OR BAD SMELLS!!! Fantastic work you guys did on my floors!! This method took only six hours to do and I was back in my home in much less than third minutes and no mess or poor smells. Fantastic Job!!

Indeed, that day Refugio Rogers was quite busy, posting equally complimentary testimonials on behalf of various businesses throughout the globe, including:

HELPFUL!!! I go to {intentionally left out} Honda to get my Accord serviced and I just wanted to tell everyone my experience…

VERY SATISFIED WITH EXPERTISE!! I am extremely satisfied with my used vehicle purchasing expertise at {intentionally left out} …

You must be a very busy man, with so much to be grateful for!

One area of confusion for us… Each time, you seem to use a different name when posting the comment. Perhaps you gather testimonials that especially impress you? Wait, could it be that you, “Refugio Rogers,” are in the business of writing/posting false praise for businesses in exchange for money? No, that would be dishonest, surely that could not be the case!

In closing, we thank you for taking the time to read our blog, and for caring enough about us to post your ad hominem advice.

Have a great day,
Monster Loop

Also, in response to our post on DIGITAL MUSIC PIRACY, we received the following email:

“According to lots of ‘studies’ and ‘research’ people who pirate music also BUY more music.”

Our response:

To which studies and research are you referring? We would be interested in reviewing them.

Is digital piracy the only reason for the music business decline in revenue? No. There are other factors, such as the decline in CD sales. Obviously, now that there is no longer a need to purchase an entire album/CD due to services such as iTunes, extra profit due to the decline of “bundling” (i.e., buying 10 tracks versus 1) has decreased profits in the music industry. Thus, if your point is that piracy is not the sole reason for the decline in the music industry’s revenue, we must agree. Good point.

But does piracy actually increase the purchase of music? Interesting concept – maybe there is something to it, but what’s the rationale behind that argument, and where’s the research or evidentiary support?

This is common sense. If I choose to download a U2 song for free, and do so, why purchase it? True, being able to download a track for free does not necessarily mean that I would have been willing to purchase it to begin with. On the other hand, if I am in the habit of downloading music for free, why would I be more likely to now buy more music that before? I’m already comfortable stealing it. Is it that I only buy what I cannot find illegally? Or do I decide what I think is a fair price and steal whatever costs more than what I think is fair. That doesn’t seem to us like a very good rule for society to be governed by.

Separately, even assuming piracy somehow increased sales, does it justify piracy? Say, for example, a study conclusively demonstrated that the more bicycles that were stolen, the more people were willing to purchase bikes – maybe they had no idea how great it was to ride a bike and now want to go out and legitimately purchase a new bike. The problem is, it was my bike that was stolen. How does it make it better that the thief went out and bought three new bikes from Joe’s Bike Shack? I never got paid for my bike. Or, to take it to a ludicrous extreme, assume a highly skilled surgeon is a serial killer. How does this argument grab you: Well, sure, Dr. Serial Killer murdered 11 people last year, but he also saved 22 people that would otherwise have died at the hands of a less skilled surgeon. As long as there is a net increase to life well, it’s okay. Obviously, this argument is flawed.

Have you heard the parable of the dwindling goats?

Parable of the Dwindling Goats

There once was a skilled mountain climber who lived on a steep mountain and made his living by selling goats and goat milk to the mountain villagers.

Being a skilled mountain climber, the Goat Seller was able to make much money because he, alone, had the skill to climb up and down the mountain to acquire more goats for his goat herd when needed. The mountain people, however, were no fools, and they were aware the the goat man’s unique climbing skill enabled him to take advantage of them by charging them an excessively high fee for the goats. But they needed his goats and goat milk, so they reluctantly paid his fees.

One day, the Goat Seller discovered a way to make the mountain grasses grow 10 times faster and more lush and delicious. This now meant it was much cheaper for the Goat Seller to take care of his goats. The mountain villagers shared in the Goat Seller’s excitement, expecting that the price of goats and goat milk would decrease. But the Goat Seller was greedy, realizing he could make twice as much money if he did not change the price of his goats.

Outraged, some mountain villagers began to sneak into the Goat Seller’s property at night, and steal his goats. To make matters worse for the Goat Seller, a mysterious disease spread through the mountain villages, sickening his goats and many of them died. But the mountain villagers did not feel remorse for the Goat Seller, remembering his greed and selfishness.

Soon, other goat sellers emerged, but because they could not climb mountains, they could only offer scrawny, sickly goats. The Goat Seller could no longer afford to buy mountain climbing equipment and eventually left the mountain, never to return, and there were no more strong, healthy goats to steal.

What is the meaning of this parable? Those who are meant to understand it, probably will.

So who are the digital piracy culprits?

According to the International Federation of the Phonographic Industry, the chief culprits appear to be Limewire, BitTorrent, Megaupload, and Hotfile. A 2010 University of Pennsylvania study, for example, indicated that 99% of downloads on Limewire were copyright protected and not authorized for free distribution.

A recent study by the Uppsala University concluded that digital music sales would be 131% higher in the absence of piracy, supporting the claim that piracy is the main cause of the decline in sales. And it’s not just the “big guys” who get burned. A recent study (backed by European Trade Unions) indicates that over 1.2 million jobs in the music industry in Europe alone will be lost by 2015 due to the current sales decline caused by digital piracy.

Sincerely,
Monster Loop

Record Labels & State of the Music Industry – Pt. 3

Patrick Henry — Sun, 11 Dec 2011 02:07:23 +0000

Background Along with some trusted friends and outside investors, Monster Loop is in the process of forming a Record Label. This is a continuing series where we discuss this process – various steps in this journey, obstacles we run into, etc. Why? To help our friends – you! Perhaps you can learn from our mistakes and our successes. We wish you success.

Forming a Record Label or other Music Industry-Related Business

In Parts 1 and 2, we provided background into some of the current issues in the music industry, such as listing the major record labels (the Big 3: United Music Group, Sony Music, Warner Music Group), trends and challenges currently facing the industry (e.g., decrease in the sale of CDs and other tangible media, increases in digital downloads and streaming but also an increase in digital piracy), and new business models emerging in this chaotic time in the history of the music industry (e.g., Reverbnation, Spotify, etc.).

This particular segment in our series temporarily puts aside these issues in order to focus on some of the more mundane, but practical aspects related to starting a band or music industry-related business.

Practical issues when forming a Band or Music Industry-related Business

Whatever service one is considering forming – whether a Band, Record Label, Music Aggregator, etc., there are certain fundamentals one must consider. First, you will need your own website. Obvious enough but, based on our research, many get tripped up on this issue by failing to keep a few key points in mind:

The name you use is important

While it’s fun (for some) to come up with wacky names for a band or Record Label like “Shakespeare’s Puddle,” it’s important to think about (a) how easy is the name for people to spell? and (2) is the Domain name available?

As far as the name, it’s our belief that it’s actually not all that important how clever the name is, what’s important is that (a) people can spell it (i.e., avoid words with multiple meanings/spellings or the use of words difficult to spell), (b) the name will not bring up 5,000 different items – especially other bands/labels that may currently use that name, (c) the web domain is available, (d) the legal name is available, and (e) the name has a positive symbolic connotation (e.g., avoid a name like “Unheard Records” unless you want to unconsciously send a message to people that they will never hear it).

That sounds like a lot of work, but it’s easier that one might imagine. The simplest beginning is simply to Google the name and see what comes up. Ideally, not much comes up, if anything. One especially wants to avoid a name that brings up other bands or record labels. Even if one has the legal right to the name and/or the domain name is available, consider the inevitable confusion among fans. If you become a success, do you want another band out there putting out music under the same name as you?

Second, check out whether the domain name is available. A good place you can check for free is http://www.networksolutions.com/whois-search Simply type in the name and it will let you know if it is available. If it is, you will also need a host for your website. Hostmonster is a good one to use; there are many to choose from. ALso, if forming a new label, you may want to add in the word “Records” or “Recordings” to the name.

Third, if you have a name you like and the domain is available, check out whether the legal name is available. In the USA, you would do that by going to the Secretary of State website for the state in which you reside. Once there, simply look for a “corporation name search” section, or something similar. In most states this search is free.

Forming an Entity

Let’s assume the name is available and you are forming a business, now what? You want to form a legal entity, most likely (and again we’re assuming you are in the US – apologies if you are in a different country) a limited liability company (LLC). It’s actually not that difficult to do. There are some forms you need to fill out and file with the Secretary of State of the state in which you live. Please do not think of this as legal advice, however; you would need to consult your own legal counsel in such manners. An LLC – and there are analogous entity types in countries outside the US – gives you great flexibility in dividing profits and assign responsibilities, etc. You can have some people who contribute money but have no actual power over decisions of your business and vice versa – i.e., people who don’t contribute money, only their time and energy. There are many articles online about this entity type; it’s unnecessary to go into further detail on this topic.

Enough for now – we will add to this post soon. We need to do some Christmas shopping!

Record Labels & State of the Music Industry – Pt. 2

Patrick Henry — Tue, 06 Dec 2011 19:34:31 +0000

State of the Industry

In Part 1, we began our discussion with an overview of the current state of the music industry. On the positive side, we noted, there is a strong upswing in digital downloads (and streaming). Indeed, there has been a 1000% increase in the value of the digital music market since 2004. But there’s a negative. Because of widespread piracy, despite the digital increase, there has been an overall 31% decline in the revenue for the music industry over this period. What’s the primary reason?

Digital Piracy

According to the International Federation of the Phonographic Industry (IFPI), an international organization that represents the recording industry and has over 1,400 members in 66 countries, “digital piracy” (e.g., illegally downloading licensed music for free) is the largest factor holding back further development of the music business. Nearly 30% of revenue in the music industry is now derived from digital sales. However, much (if not most) of all digital downloads are unlicensed – that is, illegal. According to the IFPI, nearly 95% of all music downloads are illegal and, according to the Nielsen Company, nearly 1 in 4 active internet users in Europe visit unlicensed sites monthly.

While the “Big 3″ Record Labels (United Music Group, Sony Music, Warner Music Group) are, of course, impacted, people who download music illegally on free peer-to-peer networks may not realize that the primary victims are smaller, independent labels. Even among the large labels, the major impact has been drastic cuts in the amount of money these labels have been willing to invest in new artists. That is, Record Labels have responded to the rampant piracy by becoming less willing to take a chance on unique, creative artists. While this development is unfortunate, it’s understandable.

Rise of Spotify

While the music industry has taken its case to the myriad governments throughout the world to enact laws that will discourage digital piracy, a concurrent trend has emerged – one less impacted by piracy because it is not dependent upon paid downloads: “freemium” music, as illustrated by emerging businesses like Spotify.

Spotify launched in the US in July 2011 and has seen remarkable growth already. Under its freemium model, users are able to listen to over 15 million tracks for free (compared with services like Rhapsody and Rdio that require upfront monthly paid subscriptions). Spotify reportedly already has 250,000 paying subscribers in the US, and more than 2 million globally. The company indicates that it’s “now the second single largest source of digital music revenue for labels in Europe,” and has driven “more than $150 million of revenue to rights holders (i.e. whoever owns the music, be it artists, publishers or labels) since its launch three years ago in Europe. Spotify only recently entered the US market, where it currently offer three service “tiers”: a free ad-supported service that, unlike the European version, does not enforce a monthly listening cap, a $4.99 ad-free version for desktop listening, and a $9.99 “Premium” plan that that also lets users stream and store songs to mobile devices. To date, Spotify reaches more than 10 million users, 1.6 million of which pay. The company hopes to amass 50 million more users during its first year of US operations.

Sounds good, right? Maybe. But maybe not. Consider the following excerpt from a blog posted by a UK band we found online:

Is Spotify a good thing? From a listener’s point of view, it looks like a no-brainer. For a nominal fee (or less!), you get access to a ginormous selection of music – along with the warm, fuzzy feeling that Spotify is compensating the artists by paying royalties for each stream.The whole truth, however, is that Spotify pays artists according to a convoluted formula that would bring a wry smile of satisfaction to the face of PT Barnum. Our music has been distributed by Spotify in European countries for over a year and, despite what appears to be an encouraging number of streams, we are still waiting to break that ten-dollar mark. What we make, based on Spotify’s overly complicated formula, is in the hundredths of cents per stream, and we won’t make ten dollars from them for several years to come.

The above quote illustrates an interesting challenge now facing Spotify – an increasingly strained relationship with the artists whose music it depends on. Spotify’s reputation among bands was initially damaged by a widely circulated 2009 report published in Expressen, a Swedish newspaper, that indicated that one million plays of Lady Gaga‘s hit “Poker Face” had earned the singer just $167.

This claim has been so widely circulated that Paul Brown, Spotify’s senior vice president of Strategic Partnerships, issued a statement, a portion of which follows: “This figure would only represent one of several revenue streams for the Lady Gaga track in only one country (ie. Sweden), at a time when Spotify had literally just launched. We compensate collecting societies, who pay on to publishers, and the record companies (who in turn compensate the artist and songwriter) for use of a track.”

The Lady Gaga debacle does not appear to be an isolated event. Bob Dylan pulled his entire catalog from Spotify and, in November 2011, Wired reported that over 200 labels withdrew from Spotify due to “poor revenues.”

Is the “age of free” coming to an end?

According to today’s (December 6, 2011) London Telegraph, “yes.” Consider the following statement from the Telegraph:

This week … from the world’s largest entertainment market, the US, comes good news. The biggest US ISPs have just agreed with music and film industries to introduce a new system of “copyright alerts”. These are warnings that, with escalating urgency, aim to nudge broadband users away from piracy towards downloading and streaming music from legitimate services. There will be the prospect of deterrent sanctions for those who repeatedly ignore the warnings.

The London Telegraph also pointed out that “France, along with a growing number of other countries, including South Korea and most recently New Zealand, has introduced a so-called graduated response law, obliging ISPs to take proactive steps to help curb copyright abuse.” Interestingly, the Telegraph also relayed that Spotify is now cutting back on its free offering by “trying to migrate its fans into payers, offering a £10 monthly subscription.”

What’s Next

In our next post in this continuing series, we’ll look at what other services are currently emerging.

To “step back” for a moment in closing this post, the purpose of this series is to help emerging artists and record labels navigate this confusing environment. Why? Because we all benefit. I like music. You like music. It’s common sense – everyone likes things for free. But if we want quality music both now and in the future, rather than trading our children (quality musical artists of the future) for a village of rats (you get what you “pay” for: rampant piracy = lower quality musical acts over the long run), maybe we should pay the piper (pay for digital downloads and streaming services). If the price is currently too high, perhaps we should let the “invisible hand” of the market, a la Adam Smith, self-correct. But it’s difficult to compete with free.

Viewer Mail: What is Music?

Patrick Henry — Fri, 02 Dec 2011 20:16:31 +0000

In response to an earlier post titled “Electronic Music Artists – REAL or FAKE,” a reader posted an interesting comment which we are pasting below:

I don’t know if it’s a real artist or artwork or not, but the Mr. D.o.B. album would sound like a great value if the artwork is anything to go by (pretty accurate image of how I felt on DOB – very similar visual aspect was on my menu as well). (Monster Loop note: “DOB” is a widely used acronym which stands for many things, such as “Department of Buildings.” It also stands for “Brolamfetamine” an amphetamine and hallucinogen and, as discussed below, is the signature character of Japanese contemporary artist, Takashi Murakami.)

So I say Mr. D.o.B. is a real one, same as the experience he had after taking DOB and, if I’m wrong, then someone should use that artwork as it is pretty f** mental and the album would be 18 hours of madness.

[Concerning real vs. fake artist]: Patterns of sounds played to a timed beat gives you music, so surely anything that matches this criteria is music, and it does not matter what your instrument is – it’s all the same. Some people play a piano, others play electronic instruments, so if the electronic artists are “fake,” so are the pianists, and if a pianist is a “real” artist, then so is an “electronicalist.” If I was pulling my dogs tail and making him scream to a beat, I would be an artist also; the artist could be called “dogeter” or “tail pullyist.”

We quite like this comment, and have the following response.

Dear Kitch,

Thanks for your interesting comment. First, for the benefit of our readers, here is the Mr. D.o.B. cover art at issue.

We did a little research and learned the print is by Takashi Murakami, a very talented contemporary Japanese artist from Tokyo. In 2008, Murakami was named one of Time magazine’s “100 Most Influential People”, the only visual artist included. In September, 2010 Murakami became the third contemporary artist, and first Japanese, to exhibit his works at the Palace of Versailles in France, filling 15 rooms and the park with his sculptures, paintings, a decorative carpet, and lamps.

As to the other part of your message – when we indicated some of the artists were “fake,” we did not mean this word in any pejorative sense (i.e., that certain Electronica musicians should not be considered “real” artists). We actually did make up those names – other than the 5 that are real flesh and blood bands – and did artwork for the 7 fictitious artists we made up. There is no band, for example, named “Beautiful Dream” – at least not in this dimension of space and time and/or in the traditional sense of the term. Perhaps by our creating these fictional artists they have become in some sense real, and who is to say what’s “real”? (i.e., does it have to be visible? tangible? perceivable to human senses? etc.) But we digress. Mr. D.o.B. is quite real; you may find him and stream his D.o.B. brand of music on Reverbnation.

You make an interesting point – i.e., that one should not have too narrow of a definition of what constitutes music. We agree.

In attempting to define music, Wikipedia itself begins with the caveat that “[h]ow to define music has long been the subject of debate by philosophers of art, lexicographers, composers, music critics, musicians, semiologists, linguists, sociologists, and neurologists.” Wikipedia then provides a definition of music, coined by Edgard Varèse, that it is “organized sound.” This definition seems to support your point.

Some argue, however, that this broad definitional approach – which focuses on the terms construction – delimits the meaning of music. The definition needs, it is argued, to also include a subjective component. Following this line of thought, “music” might be considered any wavelength produced by natural phenomena (or algorithm) which may be received and interpreted by means of aesthetic, cognitive processes. There are a couple of obvious problems with this definition. One, it incorporates the ambiguous term “aesthetic” (whose taste counts here and how is that defined?). Two, it is anthropocentric (defines music in strictly human terms).

On the other end of the spectrum, some may consider your definition too narrow. First, is a “timed beat,” for example, necessary for sound to constitute music? The great and legendary electronic music artist Aphex Twin, who we suspect is from your neck of the woods, might not qualify as a musician. Second, it assumes the sounds emitted by nature and the universe itself are not “organized.” And third, what exactly do we mean by “time”? We at Monster Loop believe it is a mere illusion and that all “times” actually exist simultaneously.

Were he alive today, the great Jacques Derrida might conclude the discussion by saying that no definition can ever truly convey meaning because any definition must, of necessity, refer to something beyond itself. That is, meaning is never fully present in a definition. Thus – and we suspect you would not disagree with us, it’s best to sit back and enjoy the sound, er uh, music. But please don’t be a dogeter and pull poochie’s tail; we love animals.

Sincerely,
Monster Loop

Record Labels & State of the Music Industry – Pt. 1

Patrick Henry — Thu, 01 Dec 2011 17:56:08 +0000

Background

Along with some trusted friends and outside investors, Monster Loop is in the process of forming a Record Label. This is a continuing series where we discuss this process – various steps in this journey, obstacles we run into, etc. Why? To help our friends – you! Perhaps you can learn from our mistakes and our successes. We wish you success.

Starting a Label

We’ll start this new series with a quote – and you’ve probably heard some derivation of it: “Focus on the journey, not the destination. Joy is found not in finishing an activity but in doing it.” (Greg Anderson, Author) When something seems insurmountable, we like to think of this.

So if one is interested in starting a Record Label, where does one begin? We’re likely all familiar with dire reports of the chaos that has taken place in the music industry the past 10 years (e.g., the decline of CD sales, layoffs in the music industry, etc.) And that’s a good segway to our Series. Anytime I begin anything (and I’ve been involved with many successful – and some unsuccesful! – ventures), the first step is always to thoroughly understand the new environment. It’s common sense and we think of it a bit like this:

Imagine you are a fish and are about to be dropped into an ocean on the other side of the world – one in which you have never been swimming in before. What would you need to know? What would you need to do in order to survive? What will you eat? What will try to eat you?

We believe that our Record Label endeavor is not all that unlike this ocean/fish metaphor. For us, the business side of the Music Industry is a bit of a new ocean. To thrive in this ocean, we need to understand its contours and inhabitants.

The Big 3

The “Big 3″ refers to the three major corporate labels that currently dominate recorded music: Universal Music Group (after purchasing EMI in November 2011), Sony Music Entertainment, and Warner Music Group.

Universal Music Group, a wholly owned subsidiary of media conglomerate Vivendi SA which is based in Paris, France, is by far the largest, holding over 40% of the US market. Sony Music, a subisdiary of Japan’s Sony Corporation which is based in Tokyo, Japan, holds around 25% of the US market. Finally, Warner Music Group is the smallest of the three. It was purchased in July 2011 by Airplanes Music LLC and Airplanes Merger Sub, Inc., affiliates of “Access Industries,” a privately held US-based industrial conglomerate based in New York City (Manhattan), for around $3.3 billion (US). Warner Music Group holds around 5% of the US Market. That leaves around 18-20% of the market, which is shared among various independent record labels. The Big 3′s global market share is similar to that in the US, but independent labels possess a larger share – close to 30% of the market.

There wasn’t always just a “Big 3.” Twenty-five years ago it was the “Big 6″ (EMI, CBS, BMG, WEA, MCA, & Polygram). A series of acquisitions and reorganizations since that time, however, has left us with the current three. Interestingly, consolidation within the music industry roughly parallels consolidation within the field of public accounting, which was the “Big 8″ until 1987 and is now frequently referred to as the “Big 3″ (PricewaterhouseCoopers, Deloitte Touche Tohmatsu, & Ernst & Young) with the drop off of KPMG.

Dramatic Industry Change

Even most people’s grandparents are aware that the old model of selling CDs is a vestige of the past. Since 2000, sales of recorded music have dropped off substantially. The phrase “Music 2.0” is frequently used to describe a new “paradigm” for running a music business in this rapidly evolving area.

Legal digital downloads became widely available with the debut of the iTunes Store in 2003. The popularity of internet music distribution has increased and in 2009 more than a quarter of all recorded music industry revenues worldwide are now coming from digital channels. However, as The Economist reports, “paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs.” Indeed, total revenues for CDs, vinyl, cassettes and digital downloads in the world dropped 25% from $38.6b in 1999 to $27.5b in 2008 according to the International Federation of the Phonographic Industry (IFPI). In the US, these revenue streams dropped from a high of $14.6b in 1999 to $10.4b in 2008. Incidentally, the IFPI website is a useful resource for those researching this area.

Most sales (overall, all genres) take place in US (around 38%), followed by (2) Japan (around 18%), (3) UK (7%), (4) Germany (6%), France (6%), Canada (3%), Australia (2%), Brazil (2%), Italy (2%), Spain (2%). Japan is a useful country to keep an eye on, because it tends to provide an early indication of where the music industry is headed because of the sophistication of its consumers with digital/electronic products. Consider, for example, that in 2005, 85% of all digital single sales took place in Japan.

Music 2.0 – What is the market now?

Because of these dramatic changes, recording artists now rely more heavily on live performance and merchandise for their income. In fact, this phenomenon has given rise to what is known in the music industry as the “360 deal,” in which the artist agrees to give the company a percentage of all of its income, including sales of recorded music, live performances and any other income. This has also made artists more dependent on music promoters like Live Nation, which dominates tour promotion and owns a large number of music venues. Live Nation is a former subsidiary of Clear Channel Communications, which is the largest owner of radio stations in the US.

Aside from the “Big 3,” who are the other players, what do they do, and is there still a viable market in sales of singles and “albums”? This is the subject of our next blog.

New Series: Record Labels & Current State of the Music Industry

Patrick Henry — Sun, 27 Nov 2011 17:47:29 +0000

Hello from Monster Loop.

First, before starting this new series, we promised answers to our Quiz “Electronica Artist: Real or Fake?”. So, which ones were real? The answers are: (1) Mr. D.O.B., (2) Baraba Vs PsyZone, (3) DJ Spooky, (4) Haywyre, and (5) Mr. Raw Brainyak.

Now, upward and onward. In our last post titled “Record Label,” we mentioned that we were distracted by discussions “related to” a Record Label. We used the words “related to” because Monster Loop has been in exploratory discussions with several individuals for the purpose of forming a new record label. And, in fact, much progress was made. Based on these discussions, we are going to move forward.

Because of this development, we thought our readers would be interested in taking this little journey with us. As we move forward, we will relay in this blog how this endeavor is proceeding – what obstacles we run into, what challenges we face and, hopefully, what successes the label enjoys. One of the first steps, of course, is further educating ourselves on the current state of the music industry. So the first thing we are doing is spending a great deal of time reading and, frankly, studying.

Someone may ask, “If you are forming a record label, is it in your interest to publicly reveal what you are doing in this blog. After all, it is by nature a somewhat competitive endeavor, in a business sense.” This doesn’t concern us. There’s enough money in the universe to go around. We have a philosophy which comes out a bit in our song “Karanan” that, when one follows his/her True Purpose/Will, nothing can really stop them – they have the inertia of the universe to assist them. That is, we believe that everyone has a True purpose, and it is consistent with everyone else’s True purpose. We believe that, generally speaking, when one runs into obstacles, it is because one or the other person is not following their True Will. This is, of course, an overly simplistic explanation and we believe many other factors come into play (karmic lessons, etc.) Assuming we are correct in this belief, there is nothing to fear. In fact, the only thing to “fear,” is not summoning the courage to identify and follow one’s true purpose.

But enough philosophy. Stay tuned. We invite you to be voyeurs in our journey.

Peace,
Patrick from Monster Loop

Record Label

Patrick Henry — Sat, 26 Nov 2011 04:23:01 +0000

The last couple days we at Monster Loop have been slightly distracted. We are in the midst of discussions related to a Record Label. More will be reported tomorrow. None of this, of course, impacts the Blog. In fact, we hope it will make it more interesting as we go down this road.

Reverbnation E-mail to Monster Loop

Patrick Henry — Wed, 23 Nov 2011 22:11:32 +0000

Comment Monster Loop received Tuesday evening, November 22, 2011, from ReverbNation Chief Operating Officer (“COO”), Jed Carlson, in response to a recent Monster Loop Post we titled “Facebook & Connection to Reverbnation Electronica Charts” (you can also view it there by going to this post and selecting beneath it, “3 Comments”)

Jed Carlson on 11.22.2011

Patrick,

You are one of the most astute bloggers I have ever read on this subject (I’m not just blowing sunshine…). There is indeed a correlation between your facebook activity and the Reverb Charts. Facebook likes are one dozens of inputs we use in our proprietary “Band Equity Score” algorithm that drives or charts.

Furthermore, we are in complete agreement that ‘talking about this’ and its ratio to total likes is a great way to understand an artist’s current “buzz”. We have been so interested in this ratio since facebook made it available that we are considering ways to fold it into our Band Equity calculation in the near future.

Thanks for observing this, and thanks for being such a perceptive social marketer. We must be kindred spirits in some way.

-Jed Carlson
COO, Co-Founder
ReverbNation.com

So then we, of course, replied:

Patrick Henry on 11.23.2011

Jed,

Thank you for your incredibly thoughtful message. We’ve come to realize – and we expect that many of our readers who also record music would agree – that Reverbnation is genuinely and tirelessly dedicated to promoting emerging independent artists and – equally important – provides incomporable customer service! (anyone who has interacted with Reverbnation’s extraordinary Patrick Phelan knows what we’re talking about) And we’re not just blowing sunshine…!

Why do we say this? It’s based on our personal experience with a near-tragic musical event (to us) that took place in the 1990s. In the late 1980′s, thanks to some incredibly talented electronic musicians in Chicago, Frankfurt, Brussels, Antwerp, London, Manchester and a few other cities, electronic music exploded in terms of its quality and growth. Record labels took notice and, scrambling to monetize this emerging trend, began signing electronic artists left and right. We don’t blame them. The problem was, the labels’ A&R scouts had, understandably, little knowledge of the genre. They largely lacked the ability to discern the quality electronic music from the … well, the lesser quality. At that time, there was no option to download just 1 track, so you had to buy an entire CD making the purchase a crap shoot. And while potential fans of the genre were being turned off by some unfortunate CD purchases, the Seattle music scene exploded. And, at least in the US, electronic music largely stalled.

The confluence of these and other factors nearly destroyed Electronica (called “Techno” at the time) – at least in the US. In short, Techno had acquired a reputation for low quality. A well deserved reputation in fact. There were, however, very talented artists, but they were drowned out by the sheer volume of artists producing music that showed little signs of quality craftsmanship. The labels then resorted to appealing to the basest of human desires – sex. CD covers featured scantily clad women. The labels must have reasoned, “We don’t know whether the music is any good, but we know what a beautiful woman looks like.” It was a short-sighted approach and, ironically, CD cover art soon became a proxy to identify quality music. The “rule” was – if the cover had a scantily clad woman, the music was bad. Artists developed graphic design skills as a sign to knowing purchasers. This was how Aphex Twin and Rapoon, for example, broke through.

Fast forward to the present. We (Monster Loop) want to now help identify and promote artists who produce quality electronic music. And that’s why we like Reverbnation. We believe that Reverbnation is genuinely attempting to promote quality lesser known acts. Another thing we have in common is that it is Reverbnation’s stated goal to promote all artists. Monster Loop believes that each person (or artist/band) has it within themselves to produce extraordinary and powerfully unique music. We believe there are, at root, only two kinds of music: (1) good and (2) bad. What is good music? Good music is music that is an authentic expression of the artist. What is bad music? Music that is NOT an authentic expression of its creator. Maybe the artists doesn’t know him/herself well, maybe they are being lazy, maybe they are deluded by ego – who knows? But they have it within themselves to be as extraordinary as Pink Floyd – yes, we honestly believe that. Pink Floyd is, in our mind, extraordinary BECAUSE it knows itself and maximized its potential. And kudos to them for doing so – no easy task!!

We will continue to monitor Reverbnation Jed. We believe in Reverbnation and have high hopes. Reverbnation is helping artists be discovered and, in fact, helping artists be more fully themselves by developing technology that provides extraordinary feedback. We encourage you to read, if you haven’t already, our 10 part series on the Reverbnation rankings and our 5 person focus group. One thing that emerges from that small focus group study we believe, is that the Reverbnation rankings methodology – while light years ahead of our rankings services we’ve seen – would be improved if it could somehow incorporate a subjective element. There are some extraordinary artists lower in the Electronica rankings because they don’t perform (and hence have fewer fans) and/or don’t market themselves effectively – instead they stay in their home and record record record. How do we identify those? Is there a way, for example, to have artists anonymously judge a designated number of tracks? We’re still thinking through this. “Stickleback” “Burning in Noise” “Laura Escude” and “Going after Zen” would make interesting studies for you. They aren’t doing poorly in the rankings but, for those with a trained ear in the genre, their music is simply EXTRAORDINARY. Judge for yourself. How do we further promote these artists?

Good luck to you and your company. You have the potential to affect the future of music – in fact, you are shaping it now. This is about more than money, and we believe you get that. It’s about something that transcends profit – the legacy we leave behind. It is an awesome responsibility and we have faith in you.

Sincerely,
Patrick
Attorney (licensed in NC by the way!), Accountant, Engineer, Artist, and Musician in Monster Loop

Jed Carlson kindly responds again:

Jed Carlson on 11.23.2011

Patrick,

We are humbled by your faith in us, and we do indeed subscribe to the same ideals held by Monster Loop. Let me give some thought to your suggestions about the Band Equity Score and the chart ranking system.

Thanks for the note about Patrick Phelan, I will make sure he gets your feedback and that it is reflected on his already stellar record of customer service here at RN.

If you are ever planning to be in NC, you MUST drop by our office in Durham so we can meet in person.

All the best,
Jed

We appreciate that Reverbnation’s co-founder and Chief Operating Officer, Jed Carlson, would take the time to read our post on Reverbnation, and respond. What a great guy! And, yes Jed, the next time I am down that way I will in fact stop by. I spent many years in North Carolina where I practiced law and worked in Big-4 public accounting, and it has a special place in my heart.

Monster Loop – Talked About? Apparently Yes.

Patrick Henry — Tue, 22 Nov 2011 19:11:13 +0000

Hello from Monsterloop. This blog entry was not planned; it’s in reponse to an email from two fans from California who were responding to a recent post.

Quick background: In that post, we talked about the connection between the Reverbnation Global Rankings for Electronic Music Bands and Facebook “Likes.” We briefly talked about Facebook’s new feature (which it is actively promoting) – “Talking About,” which relates to how much people who visit a Facebook Band site are “talking about” that Band. As we mentioned, “Talked About” was somewhat equivalent to Reverbnation’s counterbalancing the number of a band’s fans with how recently the Band acquired those fans. In short, “Talking About”, on Facebook, looks to how currently active a Band’s fans are. Soon after, we received this interesting email which we’re pasting below:

Dear Monster Loop, Greetings from Santa Cruz California. We’re writing this email in response to your post about Facebook likes and connect [sic] to the Reverb rankings. You mentioned that that the new Facebook [Talking About This] feature measures how hot a band is. That’s one way to look at it. We hear Facebook’s getting some pressure to better explain itself the metrics it keeps rolling out. The Talking About This metric is suppose to measure how engaging and interesting or intriguing a band is. We hear Facebook is trying to encourage bands to connect with their fans and they want to discourage bands from sticking up a music player and a couple glossy photos and then disappearing into the night to go drink champagne. So it’s more than just what’s current or, as like you put it, hot. It’s a kind of measure of how tight the band is with fans. It’s one thing to like the music. It’s another to like the Band. It’s yet another thing for the Band to like it’s fans, which this new metric somewhat reflects, if that makes sense.

After reading your post, we were curious how well some of our favorite artists would score in the Talks About percentage formula you wrote about. Turns out percentages were pretty low [ML note: the percentage of fans who like an artist who are also talking about them]. Most artists were around 1 percent. Many artists didn’t have a Facebook page but most did. Being computer geeks, we of course ran a program to calculate how engaging the artists are who are currently in the Reverbnation Global Top 500 for Electronica. We only included an artist if they had at least 100 Facebook Likes. You might find these results interesting, because you guys came out on top. Best, Kyle & Mike

(Monster Loop again) Thanks Guys – we appreciate the email! Our initial reaction is, the fact that we have fans that would send this email is evidence enough of how great our fans are! We did not independently validate each number but, before posting we did spot check around 15 or so and they checked out so we went ahead with the post. Oh, please note that, although this isn’t a big deal, the number of Facebook “Likes” reflected on our Reverbnation band page is incorrect – there’s some glitch in the data feed from Facebook to Reverbnation. The number reflected on our Monster Loop facebook page (which our friends in Santa Cruz used), however, should be correct. We did notice “Virginia” listed as a country which the fine people of that Colonial State may appreciate, but other than that – the list seems legit. William and I aren’t really sure what to make of the attached statistics, but we are happy and grateful to have any sort of connection to our fans, WHO WE REALLY LIKE. Later!

Electronic Music Artists – REAL or FAKE?

Patrick Henry — Mon, 21 Nov 2011 15:56:32 +0000

Oh we are having fun with this post! Below, we are posting cover art for 12 Electronic Music Artists. Or are we? Yes, there’s a catch – actually only 5 of the 12 below are real Electronica bands – the other 7 are fakes Monster Loop cooked up (quite enjoying this little art project btw). Click on the image to get a closer look.

Which 5 are for real? How well do you know Electronica? See if you can guess the legitimate 5 Electronic Music artists - without Googling, and we’ll reveal the answers in our next post. Good luck!