For a while now I have been doing talks at various universities or even at the Dana centre (part of the London Science Museum), and the focus of the discussion often falls on the ‘quality’ of audio today.

In essence I find myself stating my case that the MP3 format might have helped the digital music player industry grow, but that it has held back the progress and sound quality of music for the majority of people.

The MP3 was launched at a point in history when memory capacity was limited. The MP3 format compresses the audio which results in the file taking up a lot less space. For example a CD quality file lasting around three and half minutes can be reduced from 38.5 Mb to around 3-10Mb depending on the amount of compression applied. 

Of course ‘compression’ cannot be done without a hit in the audio quality. The MP3 format in effect results in parts of the recording being removed. Normally its the part of the audio which is not crucial to the sound and ‘narrative’ of the music. This results in a range of frequencies being removed. Although not crucial to the listening experience these frequencies are noticeable, especially if played through a decent hifi rather than the standard Iphone headphones. Placed against a CD, a MP3 is clearly inferior for the majority of music genres. However, this reality has not stopped MP3 taking off and being the ‘format’ of choice for the majority of people. Apple have their own version called AAC, but this too is inferior to CD. 

Where as the visual would has not only avoided reducing quality (yes I know compression is used for digital broadcast - but it always has so compared to SD television its a win, win) but its actually gone HD and FULL HD mad. Maybe its because watching things is a primary activity, where as sound takes place whilst something else is taking place for the majority of people? However, I still believe that many people still listen to music just for the sake of listening to music, and hearing it in its full glory is something which most people would appreciate. Why else spend money on that expensive Bose Ipod dock if you don’t care about the sound quality?

Believe it or not audio HAS gone HD. We have 24 bit audio and it can be recorded and played back 192Khz (the frequency at which a sample is taken - the higher it is the more accurate the recording). Its just that, except for the production environment, these formats have failed to take off. Home cinema has helped a little as Blue Ray can support some of these formats, but for most people CD quality sound is still the best they have ever heard, and they live in a MP3 world for most of the time. 

The success of the MP3 format has been the main factor holding back progress. MP3 players were created to play back MP3s and hence new or even older alternative formats were locked out of the consumer offering. However the owner of MP3, Thomson, have now come up with MP3HD. This is excellent news!

What is great about MP3HD is that its backwards compatible with older players. So if you download a MP3HD file but your player can’t play HD files, it will still read it and just play a traditional MP3 version. However, when you upgrade your player then your files are already HD and you haven’t got a wasted download. Now these MP3HD files are not better than CD but are promising the same as CD sound, which is good. However, one assumes that the format could be extended to a FULL HD audio standard with the same backward compatible principles being applied.

The pressure to act is now with the actual download stores and hardware manufacturers to adopt this new standard. We want Amazon and co to offer MP3HD files for download and for hardware to support the files. Clearly download stores won’t jump at this despite the improved experience for customers. This is because of the extra bandwidth the stores will require to be able to send all this data to consumers. Additionally consumers will need fast broadband connections to recieve a file within a reasonable period of time. The latter of these concerns is not really relevant in most of the developed world with broadband fast enough to deliver this for most people.

The earlier concern, regarding the bandwidth download stores will have to use to deliver the files, is relevant. Indeed, this would most probably result in the files carrying a higher price. Though, this might stop the format establishing itself in the first place. Perhaps Thomson should lower any licensing fees required to use the format, at least to begin with, to help it take off?

Either way, its good to see that the quality of Audio is at last being made relevant at the consumer level and is not just an academic issue for the producers and professionals in the industry.

The demise of Spiralfrog has highlighted the reality of the ‘music for free’ model. This reality is simple: music is not free and costs to listen to and own. The record labels knew this and hence charged Spiralfrog a premium for granting access to their content. 

Unfortunately they did not have a strong enough business model and did not sell other services or generate enough income from advertising to be able to afford the music. This is interesting, as it demonstrates to consumers that the idea that there is no cost to music is phoney. Certianly Spiralfrog users now understand that there is a cost, because their service no longer exists.

However, one assumes that they will just migrate to another free music service such as Spotify. Spotify are clearly learning from the Spiralfrog story and has now announced that it will start to offer paid downloads via 7digital. 

Record labels want these new, legitimate services, to exist but then charge such high fees from them, they end up not allowing these services to bed in and grow. Hence, it is impertive that new music web ventures have a range of income sources from day one of launch. Especially in a market where advertising income on the net is down from anywhere from 2-20% depending on the sectors targetted. 

Meanwhile the Itunes music download service will start to vary the pricing structure of songs within its library. Some would argue that the timing is awful, as the industry as a whole is still struggling and we are in a recession, but the idea of increasing the COST of downloading music is interesting. Perhaps Apple is seeing if the legitimate download market is now becoming a way of life for many users rather than something to ‘play with ‘ on the side of their traditional music consumption habits. Accordingly they are testing the market to see if they can squeeze value back into certain recordings.

One thing is for sure, good music costs money to find, nurture and produce. Perhaps the re-education of the public has started?

To bring those of you who have missed this news story uptodate:

YouTube have stopped allowing UK residents to see music videos from major labels. This is because they have not been able to agree the package paid to the PRS, which is the body that represents the songwriters in the industry (not the record labels). 

In many ways, what Youtube have done is ethical. Their previous deal expired and without agreement they shouldn’t make the content available. Additionally, without knowing what the final figure is they might be worried about exposing themselves to an unknown fee to be retrospectively applied to this period of time where no deal is in place.

However, its also quite possible that YouTube is simply posturing, and showing the PRS that songwriters represented by the ‘industry’ need YouTube far more than YouTube need them. In some ways YouTube would be right, whilst songwriters whos material is being used in ‘premium’ videos are being pulled, other ‘long tail’ artists, people who are probably not even members of the PRS, are still having their content made available.

The PRS is slowly changing the nature of its membership as its now offering free membership. They want as many people to join as possible as this would, in theory, allow them to leverage that user base when negotiating with the likes of YouTube far more succesfully. 

However, one has to wonder if eventually a cultural levy might have to be placed by government on organisations such as YouTube. A Corporate license fee as it were, which is collected centrally. It would then be left to organisations such as the PRS and PPL and labels directly to negotiate with the holders of that fund, what cut they should have. 

Something has to give, as the current situation is not great for songwriters. Music has a value, and even if times have changed and the end consumer no longer has to pay, we need those that leverage that value to appreciate this and commit to principles which enshrine fair payment. 

Some artists have asked for a share of the ad revenue derived from Youtube clips, and this is already on offer to those who own the videos (which is a separate form of ownership of the song). Thats not insane, but at present the technical infrastructure for that does not really exist on sites such as Youtube. On Itunes all music is placed with ISRC codes, which means you can trace the publisher/songwriter, copyright holders etc. With Youtube, at present, none of that data is transferred, so how can they pay directly to a songwriters? They cant. Thats why the PRS has to negotiate a lump sum type approach to YouTube and then work it out from there. However, Im sure a company the size of YouTube could put the infrastructure in!

However, this is not a one-off situation. Warners recently pulled their own content from YouTube over a similar issue. So what is the solution? It might simply be that YouTube is not the right platform for professional material. Its ideal for amateur works, or previews of commercial works. However, unless they launch a commercial channel section, a proper pay to view scenario, then content owners and those that represent content owners, will just have to steer clear of the website.

Mind you, YouTube have recently announced that they will soon allow people to download content, and charge for this privilege. Perhaps that might be the middle ground? The PRS and Warners would accept a lower payment for the streaming material, seeing it as a type of preview. Consequently a fairer form of payment is transferred when the content is downloaded by the user, just as it would be in the world of Itunes.

The PRS has a simple message which is that content is made and owned by people. Real People. Most of them earn less than £5000 a year (so they claim). Its not healthy for them to have it withheld from the consumers or to have it available but without real financial remuneration.

Perhaps the answer to these issues, is not to dance around numbers but to look at the actual system and platform on offer and work together to build something that offers value for all. The Youtube model was built without having to take these issues into account, and was essentially for amateur content. Now its been adopted by everyone, yet its own business model and delivery options are not compatible with the commercial production world’s needs and that, it would seem, is the core issue. We, the content creators love YouTube, but need it to work with it to  change how it offers content with a tiered range of options. 

Is anyone having this conversation?

Once again its award season in the music business. In the USA well have the Grammies (which are a worldwide benchmark) and in the UK the Brits. Both award ceremonies are designed as marketing tools, to highlight the ‘best’ recordings and product out there. Following the high point of the holiday season where sales are at their highest, the award ceremonies help keep the music and acts in the public eye.

Columns and web pages will be focused on these events. The industry hopes, as always, that they will create a direct boost in sales for the nominated acts (and winners) and indirectly get people into record shops or online stores, where they might pick up other music whilst browsing. 

In the UK we seem to allow the story of how well our acts are doing in the USA  to dominate proceedings. It is similar to the Oscars. Even though we have our own ceremonies (the Brits for music and BAFTAS for movies) we still think that doing well at US ceremonies is key. Thats not a ridiculous position, in that the USA is a huge market. However, surely what matters just as much is whether those acts are funded by US or UK labels. Its possible to have US acts which are owned by UK labels, and in many ways its healthy to have a portfolio of acts from around the world. 

Additionally, perhaps we should be concentrating on how well UK labels (or acts) are doing in other markets, such as Russia, China, India and Japan. Clearly those are difficult markets and not worth as much as the USA. Japan, excluded, all those markets have major piracy problems, but the potential for growth there is huge. If UK labels don’t invest in those markets (accepting that in the short term they might loose money) then they will loose out. At some point a home grown market will emerge from those markets, and if not challenged will could then ‘dump’ content back on our market.

This is not an argument for cultural protectionism, but for cultural aggressiveness. Just as the UK strives to have its content do well in the states, a mature well developed market, it should also be making huge steps into these new markets. Finding great talent, and developing it. Perhaps adopting different business models for different markets. After all, how much music do major labels sell in Africa? Not a lot as they do not see their model working there. However there is a working model out there and there is money to be made, its just a different model to the one in the USA, EU, Australia and Japan. 

Of course these award ceremonies are built very much around the traditional model. The idea of having an album of the year award, helps market a bulk of work in one go, but how many people actually buy albums over buying individual downloads? How many people are now just streaming the odd song?

What happens if artists sell a subscription or membership to their channel and then drip feed songs. They might never be packaged as an album, but are just a stream of content released over a long period of time. We can still have song of the year, and Act of the year though. I would expect that as new formats take form, we will see a change to these ceremonies.

For now though we are sometime away from that reality, so lets sit back and enjoy the fact that the Brits are back in town. Again.

For sometime we have been used to music and advertising working together. In many ways, its never been subtle, from the famous Pepsi style ads, to HIp Hop acts wearing branded goods such as Nike and Reebok.

However, its never become a point of standard practise. Mainly because not all acts or all songs reach a large enough or relevant enough audience. Additionally, what with the economy being so tough at present, advertisers demand stats and feedback to deomstrate the bang they get for their buck.

A few years back, Sting’s video for Desert Rose was doubled up as the advert for a Jaguar. It was still subtle enough (in contrast to a pepsi ad) to fit around the narrative of the video but had enough shots of the car so that it could be used in a shortened form for tv and cinema adverts.

With everyone, reaching out and grasping new income models will the idea of advertiser driven content raise its head? We are already seeing how much of the tv industry is supplementing its income due to a market that has gone through huge amounts of fragmentation, and due to advert slots themselves being less effective partially attributed to the tivo style technologies that now exist. 

Shows are either being commissioned by sponsors or prexisting shows are being touted to possible sponsors who may like the concept and see a fit with their product or message.

Why not the same with music? I’m not only suggesting this for individual tracks or artists. Why not apply this approach to the great untapped ‘brand’ of the label itself? Labels have never understood brand. Even though they take great pride in their LABEL, apart from the DefJams or specialist jazz labels of this world, the ‘label’ has rarely stood for anything in the minds of the consumer. Consumers, for the large part, did not buy this or that album because it was on Universal or EMI. They followed the act.

However, if the labels can actually come up with identities (you could call them labels!) which have a very strong focus, and start to sell them as ‘channels’ being targeted at specific target groups- why then they might find that they have a platform which advertisers will want to embrace. This would help create targeted income on Utube Channels, physical product, tv slots. One can even see opportunities with regard to how their music is ‘presented’ on platforms such as Itunes, Amazon or the new mobile ‘unlimited’ music services.

Of course this could have a cynical affect on the music. However, it shouldn’t. After all, record labels have always pushed music that was appealing to an audience. Without doing that, it would not sell and hence not be supported by the label. All we are doing here is doing it in a more coordinated way and making sure the record company’s own label really means something.

We have already seen how music shows on tv are being snapped up by sponsors and ad agencies the world over. Now is the time to take that trend and make it apply to music in general and not just American idol and its copycat shows.

EMI has been struggling for a while now. In fact struggling is probably an understatement. Bought by Guy Hands a few years back now for around £3 billion, in today’s climate (and based on EMI’s continued slide into financial armageddon) surely the banks will soon call in their debt?

EMI claimed at the end of December, that its last 6 months had been positive resulting in cash being generated. Perhaps the slide into financial doom is over? March will be the important month in 2009 as thats when its banker checks the state of the finances, making sure they are in line with the risk and expectations required for the finance to continue and not be called in. 

However, as a huge part of EMI’s sales are in the UK, and as the UK music industry had an awful xmas (due to music sales switching to games, and the lack of coverage on the high street due to the Woolworths situation) one wonders if EMI will find that their position is not quite as positive as they had hoped?

Its rumoured that they are shutting down the world famous Olympic Studios. Recording studios in London (and the developed world) have been finding it tough going for some time, especially the large studios. EMI will concentrate on Abbey Roads, a studio which in recent years has diversified. Abbey Roads has become a specialist venue, and tv studio (home to Live at Abbey Roads - a Channel 4 TV series). Meanwhile its name and facility mix allows it to continue to be used for large budget games/films and top recording artists from around the world. However, the next 12 months will be crucial for Abbey Roads too as its fate is wrapped up in EMI’s. 

EMI needs to work out what it does and how. It doesn’t really have the time to be ‘experimenting’ in the market place and should either streamline down in a particular direction or raise the finance to move aggressively into a new market or distribution platform. It seems, though, that they either lack the direction, don’t know what the future holds (and hence are hedging their bets) or lack the finance to move aggressively to where they want due to the amount of debt they are burdened with. CNET reports that EMI are to launch their own download store, quoting a spokeswoman saying it is where they can ”experiment with new digital platforms.” Well surely the whole download store idea is not exactly something which needs much experimentation? We have Itunes, Amazon, Nokia, Napster, Emusic and many many more? What is EMI bringing to the party?

Ultimately those with a financial stake in the company will at some point ask - how best can our investment maintain or increase its value? Even if ‘turning the company around’ is slowly working, would we be better served by selling it whole, or in parts, to other companies with the direction, resources and finances to make best of the great assets locked into EMI and its heritage.

Music retail, as we all know, has been on the back-foot for sometime. However we have recently seen the music retail industry take some real body blows. Major retailers such as HMV, Zaavi and Woolworths were already moving music to the rear of the shop and films/games to the front. The supermarkets were even putting more shelf space to games and videos and less to music. 

2008 though saw an increase in this practise coupled with the economic crisis. First, Woolworths went bust which meant that not only music retail (mainstream music and cheap, bottom end product) loost a major presence but, Woolworth’s distribution arm also went under. It was responsible for a major cut of all music (and games/DVDs) distribution in the UK and left many major stores without product to sell. As a consequence Zaavi (used to be Virgin) went under as it was not able to fufill demand and at a time of the year when it would do most of its business, thats not good! 

Seperatly to this Pinnicle, a long standing independant distributor went under. This would have hit the small music shops and of course many, many independant labels. Once again, it was happening at the most crucial time in the industry, whether you are a label/publisher or a retailer. This is the time to sell product. 

Where does this leave us? Well, I think well see a number of labels go bust over the next 3-6 months, and many small shops leave the market place too. Zaavi might be saved, but if it is, the new owners will speed up the type of changes shops such as Zaavi and HMV have been pushing - i.e. relegating music and creating more interactive spaces for gaming and selling hardware and other physical product (clothing and what not). We will of course see a number of labels suffer too.

Once the dust settles, we might find that apart from the top 20 product, there is a much reduced demand and supply chain (to meet that demand) for CD/physical music product. I would be surprised if anyone takes the following decision, but perhaps its time for the majors to consider dropping the CD product in the UK, except for really specialist music, or music with a demographic who are not IT friendly, or for music which is clearly top 10/20 (and then, only sell it on CD for a very limited period of time). 

Either way this bad (Awful) holiday season for the UK, physical music scene has to been seen as a watershed and an opportunity to redefine the business model permanently.

Ars Technica discusses the UKs intention to follow the USA partially and extend copyright on the sound recording (see here). The article discusses the moral issue, the moral issue from the point of the consumer - the public and the concept of something entering the Public Domain. However, there is another moral issue. The issue of the artists. 

When I refer to the issue of the artists I am not backing the Cliff Richard position. They are the artists with reasonable record deals (of sorts) and so might initially benefit from the extension. However, I am focusing the light on all the musicians who were paid ‘buy-outs’ for featuring on records or signed awful deals. They were young and tied themselves into a deal which lasted the length of the copyright. The current 50 year rule gives them a second chance. 

For example they could remaster and print their own copies of the music. Sell it on the net or carry CDs around with them on the gig circuit. With the current demand for live music, there are many acts back on the road. Some are just playing pubs and clubs, but they are out there and they could sell 10/20 CDs a night. Its a potential income for them and a way of undoing a ‘wrong’.

50 years seems a fair amount of time for a record label/original copyright owner to make money from the recordings. Also, I think Cliff Richard just misses the point. If he let his audio recordings expire, then he could sell them direct via his website and gigs just like the wee bands doing the pubs and clubs. He would make a fortune.

Let the copyright die at 50 years. Its morally the right thing to do. Not just for consumers but very much for all the muscians and artists involved in the music originally.

As predicted by many, streaming is slowly becoming the way to receive data. Here is a list (not exhaustive) of current random applications and services which use streaming:

You Tube: on computers, phones and other portable devices

Phones: 3G and Wifi allow streaming of video content and music. From ‘consumer phones’ to corporate Blackberry’s, they all allow content to be streamed.

BBC Iplayer: Perhaps not huge outside of the UK (as its a UK only service!), but one of the Nets greatest success stories. Backed by the tax paying public, the BBC have created a robust and high quality system which has been embraced by the public. 

Streaming though is now entering the world of the console and setup box. In recent months and weeks we have had Microsoft enter an agreement with Netflix to facilitate the streaming of its content through the Xbox360 platform, Playstation will soon have music videos being streamed through its media centre and Blockbuster have announced its stand alone streaming box which is similar to the Netflix stand alone products already out there.

In the UK Sky have also launched their version of the IPlayer and there is talk they might go into partnership with console companies to offer the streaming service directly through the console. 

Now most of these services are video first, with audio second. However there has been a steady growth of audio streaming websites (often with music videos) on the net. Some are subscription based and others free to the consumer but funded through advertising. Check our Deezer.com as an example. 

The point is this - downloading might be old hat already. How does this make you feel? Does it matter if the data is actually on your device if the technology allows you to access and recall it whenever you want, whereever you want? 

Now clearly there are limits to this technology. What happens if there is no Wifi or 3G signal? Well lets be honest, in Urban areas that scenario is becoming less common. However for us country dwellers (I live on the edge of town!), we do still struggle to get constant 3G, or even decent speed broadband (where I live we still only get 1.5mb a second!). Streaming You Tube in my household is a non starter at peak times of the day, so expecting high quality audio or video is just a dream! 

However, are people like me being left behind? Well some would say ‘no’ as downloading is still here, still viable. For how long though? Streaming is not piracy free, far from it - but it is a lot more secure than downloads. So won’t content owners push for streamed content as it keeps the content out of the actual hands of the consumer for longer? I.E. its passes through our systems, but unless we are technical, it never leaves a trace we can access. 

Personally I’m not a fan of this new reality. I like the option and welcome it as another way of accessing content (once my home broadband can use it!), but I want to be able to take my PSP on a plane and watch a movie. Something I can’t do unless I have downloaded it. Mind you they have now started allowing mobile phone calls on planes (you have to sell your wife though to fund it), so maybe we WILL be able to stream even when 30,000 feet in the air! 

Whats your opinion? Streaming versus downloads - what wins overall for you? 

Its been rumoured on a number of sites now that Itunes will be dropping DRM. Well hurrah if they do. Lets quickly go through the pros, and cons of this decision. 

Cons -

From Apple’s perspective they loose a reason to buy an IPOD or to keep buying an IPOD. Traditionally music bought was tied into that piece of hardware. It would not play on anything else

Music which is exclusive to the Apple’s, Itunes Store can be copied and shared with as much ease as any other material.

Pros - 

For the last two years, people have been able to buy music, legally, without DRM from a number of players in the market. That music would work on an IPOD. So Apple’s business model had actually become a barrier to them growing the Ipod market, as consumers would soon become use to the idea of music download interoperability (remember in the early years, Apple were not the only company with closed DRM).

It should also be noted that the Ipod has now grown beyond its original functionality. Its now a phone, a games machine and slowly becoming a business smart phone which is competing with Blackberry. Hence, there are lots of different ways Apple can make sure it still has content exclusively tied to its hardware by having the best business applications and games to play (adapted uniquely to its hardware). 

Apple still has the Itunes store, and for many that is of value in itself. The Apple hardware, with a dedicated ’streamlined’ (some people think that the Itunes Software needs a MAJOR makeover) software application for purchasing and managing content is a major plus. There are still very few competitors with a fully joined up experience such as Apple’s (Sony are slooooooowly getting there with their PS3 and PSP platforms).

All we need is the record labels to allow Apple to lift DRM across its entire catalogue. Does this mean Apple was always telling the truth when they said it was the Record Companies that forced DRM on them? Well I suspect, that yes, in their continual fear of anything which is not some form of physical distribution system they did insist on DRM. However, I reckon that Apple then saw how they could make it proprietary and use it as a way of making sure no one could ride their success in developing the Ipod platform. 

That market reality has now gone, and now we look forward to a world where, music at least, has no locks on it. The question remains will the Movie Industry follow suite and also allow Apple to unlock the films and tv shows? That would be superb boost to the world of legal digital content, and would result in many more people embracing it.

After all EMI recently stated that since they had lifted DRM via a number of download sites they had not seen an increase in illegal sharing. Those that want to break the law always will, and for the rest of us, if the price is right, if we feel we own the content and can use it across all our hardware without being punished - well we always buy it.

After all we can STILL buy it on CD/DVD and rip it with ease. If companies were THAT concerned with stopping Piracy they would have stopped making CDs and DVDs by now!