Small steps to big change - shutting the pre-release window

Why do we release some songs to radio stations up to 8 weeks in advance of making them available for sale? Why do we create demand and not provide a legal means for that demand to be satisfied? Why do some record labels still insist on using out-of-date marketing practices that don't fit the digital world we live in without sending genuine music buyers towards illegal sites?

A very simple, sensible, smart idea – close the pre-release window and make all music immediately available for sale the minute it's made available to radio stations. Encourage label marketers to invent new, creative ways to influence the buying habits of music fans. Or just sign great music in the first place and let it find its fans.

Anyway, I've very kindly been given permission by Paul Scaife at Record of the Day to re-post editor Nicola Slade's incisive editorial from this week's magazine.

Same caveat as previously – I still occasionally work with these folks and I think it's a terrific music company...

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We have become aware this week that there is a groundswell among particular quarters of the industry pushing for a change to release dates for singles so that they directly coincide with the servicing of a single to radio. The bone of contention which is driving this campaign is that once a music fan hears a song on the radio, they want to be able to obtain that piece of music straight away.

Common marketing practice has meant that most singles and albums are subject to a four to eight week campaign lead time. Consequently, a single may be played for up to eight weeks on Radio 1, for example, before anyone is able to actually purchase it. The concern is that, unable to buy the songs they hear on the radio on legitimate services, people are using illegal methods to obtain the single they desire to own.

The push to instigate change is not limited to one record label or trade organisation. We have spoken to a whole host of parties this week: managers, publishers, smaller labels, DJs, the Entertainment Retail Association, the Featured Artist Coalition, the Music Managers Forum and more have all expressed a similar wish: make the product available immediately and it might help thwart piracy. On the surface, this appears an obvious and simple solution to some of the woes being experienced by the industry.

Additionally, some have even gone as far to suggest that there should be a change to the Official Charts Company’s chart rules: that a single would not be chart-eligible unless it is made available for sale at the start of a radio campaign.

One of the key arguments against this idea is that campaign lead times create latent demand, meaning that when a single is finally released, it has a better chance of entering the charts in a high position. Marketers can use a Top 40, 20, even Top 10 chart placing for a single story to assist in the push of an album. Those in the pro-camp suggest that marketers change tactics and find alternative, original and creative ways to promote albums. ERA director general Kim Bayley told us, “The rationale for charting a single high - that singles sell albums - in many cases no longer holds true now the singles and albums markets have diverged so much...So what we have is an out-of-date marketing practice which can only encourage piracy.”

Bayley’s remarks neatly reflect what is happening on the sales charts. The albums market continues to suffer quite dramatically, yet we should also remember that the singles chart is in a healthy position: some 153m units sold last year, 1.9m this year to-date already. Conversely, if singles were made available to buy earlier, common sense tells us that those figures could be much higher.

One publisher we spoke to, who firmly sits in the pro-camp, said, “With the pre-release windows gone, the chart would truly reflect popularity and we'd see nearly all tracks entering low and climbing as awareness rose. Media would quickly learn that it usually takes weeks of sales and airplay, to determine which are the genuine hits.”

That person’s comments almost suggest a level playing field would be created. But is this so true? Does this change in tactics apply to anyone but the major labels, or those with hefty marketing budgets and media clout? Our feeling is that the wider industry is not so concerned with such matters. The reality is that any significant level of radio play on the major stations and networks is a luxury only afforded to a small part of the industry.

We raised the issue with some specialist show DJs. 6Music’s Gideon Coe noted, “I know it's a source of some frustration to listeners when they hear a record which will not be out for some weeks. So, I try to avoid playing them too far in advance... What I'd not want to see is an unholy rush to get songs to air and on sale at a certain time of the day, week or month. I don't think it would make for good music radio. It could lead to the same record being played everywhere almost at once. A horrible thought. And there are so many good records being released every week and not getting played enough elsewhere on the radio to keep the likes of me busy.”

“An unholy rush”? It’s a fair point and one we’ve wrestled with. Radio stations are in competition with each other to be first. Radio 1 enjoys the fact that its playlist is responsible for hits. Removing the concept of pre-release airplay will result in stations changing their own tactics. However, if a DJ can flag up that a single is available for sale, it almost lends them more power and influence.

Another dimension which suggests that the system should change is that digital a la carte sales from albums, quite often released on the second single, mean that consumers are already choosing their own singles anyway. By the time the second, third and fourth singles are released, music fans have already amassed the tracks they want. Marketers are already, in some senses, fighting this very battle.

The overall premise, just to reiterate, is that many parties are at a loss as to why the industry complains about piracy, when common marketing practice has fuelled the creation of an illegitimate market. The MMF says, “The release window issue and its effect on piracy have occupied our thoughts for some time. It’s really a no brainer. A small change in culture abetted by different chart rules could stop the drive of consumer to illegal sites and the result that those sites become the first port of call for many. Tracks would still chart high if they sell enough as the Haiti single will this week in the same way that the Beatles and Slade did in the past, to name but two. Some tracks will take longer to rise up the charts but developing artists and combating piracy can’t be a bad thing, can it?”

We don’t presume to have the answer. Maybe a change in chart rules isn’t necessary. Labels are at liberty to release tracks whenever they so desire. However, an industry-wide initiative to instigate a release date change is something we would praise and it would certainly be interesting to see the impact it would have on both the singles and albums market.

Nicola Slade

iPad - first thoughts...

This is a fascinating analysis from The Wall Street Journal about how e-books might transform the publishing industry. It's not the first e-book reader but with mass adoption, clearly the iPad could be the catalyst for such a revolution.

I've always been a fan of books as a physical form, like music captured on vinyl records, but I don't think we should be afraid of change. If this means we get to consume more great literature as we now can with music I think the world might be changing for the better.

Something's happening here

Is it a coincidence that two of the top stories in the music industry today relate to different approaches to dealing with folks file sharing?

In the UK the first person prosecuted for file sharing has been acquitted. This doesn't bode well for the government strategy of trying to discourage the practice by threat and punishment.

In Denmark there is news of the success of an ISP that has been bundling free access to any and all music as part of its monthly subscription charge to customers. Making digital music appear free to consumers. What a smart idea.

Worth reading the whole story especially the points about the much lower cost of customer acquisition and the dramatically lower churn rate for customers. This clearly gives the company a compelling competitive edge.

So this business model can and does seem to work whereas trying to control and correct people's behaviour evidently doesn't.

Thank you Record of the Day for the links.

A better use for half a billion pounds

According to this Daily Telegraph piece last week the introduction of anti-piracy measures in the Digital Economy Bill will cost consumers up to £500 million annually.

Here's an idea, if we're going to seriously entertain pursuing this, why not give the entire sum of money instead to copyright owners – artists and record labels – and in return have them give consumers all their digital music for free.

It might sound radical but just try thinking of it as a new business model and it's not so scary.

Dynamic Pricing

Seth Godin must be one of the smartest people on the planet. His blog is always inspiring. This piece about dynamic pricing is about the book publishing industry but it's equally relevant to all sectors of the music industry. What are the good reasons we aren't doing things like this more? I don't know of any.

Dear Lord Mandelson...

In yesterday's edition of the weekly Record of the Day magazine is this open letter to Lord Mandelson from editor Nicola Slade. Paul Scaife, who's now more important than Stephen Fry (see here) very kindly gave me permission to paste it in full. For a copy of this magazine you can download it as a free sample from the front page of the RotD site or use this direct link.

Declaration – I used to work for Record of the Day and occasionally still do. It's a great team of people and a terrific music company.

Back to this letter, I think it's absolutely bang on. I'm not sure labels are ever going to unite to develop a necessary new business model to save themselves. Which is why I too believe the time has come for the government to intervene and impose compulsory collective licensing on the UK record industry and achieve something that's actually beneficial to music consumers.

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We feel compelled to write an open letter to you today to highlight the news that Virgin Media’s music service is going to be delayed for some time owing to a negotiation impasse with record labels.

In light of the recently proposed Digital Economy Bill, we believe it’s imperative for you and your advisors to keep abreast of such developments. Maybe you are aware of what has occurred, but we would like to add our voice to the chorus, so to speak.

Virgin Media and its joint venture partner Universal Music Group announced their intention to launch a subscription-based unlimited download and streaming package earlier this summer. We count ourselves among those who welcomed their plans, believing it to be a forward-thinking and potentially ground-breaking service which would greatly appeal to British music fans.

This week it has transpired that EMI, Sony, Warner Music and – as far as we can ascertain at the time of writing – Merlin (which represents the indie community), are holding back the launch as a result of a dispute over price-points relating to the unlimited download aspect of the service. We also hear unconfirmed reports that EMI is also seeking for the unlimited download offering to be capped – therefore negating the uniqueness of the original offering. The price point, we believe Virgin had set, was in the region of £15 per month, or as someone close to the company told us, "the price of two CDs".

Virgin had confirmed that it hoped to launch before Christmas, and while discussions remain ongoing, it is now in a position that it cannot provide a firm launch date for any time in the near future. It is also thought that Virgin might be forced to reassess its original plans in order to satisfy the needs of the labels.

For background purposes, Virgin Media in the latter part of last year was poised to launch a music ISP service, in association with one of the music industry’s most savvy technology companies, Playlouder. Those plans were disappointingly scrapped at the last minute after it transpired that certain record labels refused to license their content. We also believe that the music-based ISP service would have proved to be successful and would have provided another outlet to entice certain quarters away from P2P platforms.

This latest piece of Virgin Media news arrives at a time when ad-funded streaming services in the US are being overhauled. MySpace has acquired the much-beleaguered Imeem, while Apple stepped in and picked up Lala.com only this week. From the outside it is no surprise that the Apple/MySpace behemoths would choose to acquire those platforms – if only to utilise their ‘back-end’ technology. But what it does show is that these services were unable to survive as stand-alone propositions. It therefore does not bode well for similar services here in the UK. Although we believe Spotify and We7 to be resilient, we too recognise that it is an uphill struggle for them to draw in enough revenues to maintain their services going forward. There is therefore a desperate need to introduce into the UK market new legal services which are not funded by advertising, but which still provide an innovative and new offering for consumers – just as Virgin Media has been trying to do.

In light of the Digital Economy Bill – where might all this lead us? We understand your target is to reduce piracy by 70%, but how is that achievable when the record labels who have lobbied government so hard are simultaneously stifling the launch of innovative, new platforms?

This is unfortunately a rather sour note to end the year upon. It’s a regrettable and we believe, avoidable situation. Virgin ought to be commended for its vision. What a terrible shame, it is then that the same can’t be said of many of the UK’s labels? We urge you to question labels about their attitudes towards licensing new services and their failure to give innovative new business models a chance to even take root, let alone flourish.

Nicola Slade

Music as a service, not a product

This Guardian article by Don Tapscott, author of Wikinomics largely echoes the Sunday Times piece below. There is nothing here with which I disagree. Great piece, well worth reading.