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Day Job Stuff

Wednesday, May 23rd, 2007

Been a bit tied up at Newsweek, so haven’t been posting here much. Sorry.

I can immodestly point you to what’s been tying me up lately. I’d been working on and off since the beginning of the year for a piece about Y Combinator, which provided a window into the startup culture of Silicon Valley today. It was a blast hanging out with Paul Graham and Jessica Livingston there, as well as the wonderful founders of the companies they were seeding. The interesting controversy that rose from this had to do with my observation that almost of them were in their twenties, and that youth ruled in the Valley these days. I didn’t get it in the story, but one of the interesting things that happened during my research was that Mark Zuckerberg of Facebook spoke at a Y Combinator event and claimed that when hiring, he will always go with people who are technical and young. Glad I’m not applying for a job there!
Also, I have a column about MySpace and the focus of its founders, who seem to dismiss stories of users going to Facebook and talk more about being the next great media company.

Amy Winehouse 101: The Economics of Music

Thursday, May 10th, 2007
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I am obsessed with Amy Winehouse. A sulty, tatooed soul-singin’ chanteuse from East London who is the toast (burnt) of the UK tabloids. A HELL of a singer. Glad my buddy from CT clued me to her.

So now I like Amy Winehouse. Good for me, good for the recording industry, good for her. Cause I will indulge my Winehouse habit, happily spending shekels if need be.

Unfortunately, because the music industry model is broken, I wind up not being able to spend money when I want to, and have to go out and look for stuff, which winds up being free. I wind up spending a fortune for concert tickets, very little of which goes to the proper recipient. And I’m frustrated that I can’t get more, even if I want to buy more.

Just look at what happened.

I got into Amy by picking up free samples. iTunes had her as single of the week a while back. Then music blogs offered samples I found an entire concert she did in Amsterdam and immediately slotted it in my iTunes library. On other blogs I found fantastic acoustic versions of her songs, lifted from an AOL concert she did. I saw the AOL videos, great stuff. I could also find numerous performances on YouTube. All of this free stuff whetted my appetite for stuff I was happy to pay for. But when I wanted to buy her music, I could get only one album–the recent Back to Black CD. It’s available on Amazon for $11.99 and iTunes for $9.99. She has a previous album, called Frank, that is available only as a import. It’s not on iTunes.

In other words, there is a lot of Amy Winehouse music out there but I can only buy a fraction of it.

Amy came to the US, and of course I want to see her in concert. I heard she was playing at the Highline Ballroom here in NYC, and went to the Web for tickets. I just missed it before she sold out. Went to craigslist, where someone was asking for $75 apiece for the $20 tickets. I told him I’d give him the $150 for two, and he agreed. Then nothing. When I contacted him later, he confessed he sold them to someone else for $100 each. Bastard! By the time I got back to craigslist, tickets were going for $200 apiece. Something in me rebelled against paying that for a $20 ticket. That’s New York. Saw someone else selling tix on craigslist for only $75–in Philadelphia. Instead of biting, I went straight to Ticketmaster and saw that Electric Factory tickets in Philly were still available and I bought two, $18 each, but it wound up costing $56 for both including handling, postage and whatever other bogus fees they were charging.

Saw her on May 5 night in Philly. It turned out great, because, since Philly is a hometown, I drove down with a long-time friend (the one who clued me to Amy the first place) and we had dinner with two dear friends, then a drink afterward with another pal. And I stayed with my parents, glad to see ‘em. But poor Amy Winehouse–she’s not getting what she deserves here.

Amy, if you read after the jump, here’s two ways you can allow fans to get more, and make some money yourself

  • PUT MORE STUFF ONLINE. Letting blogs carry your music is fine–but also make sure you sell it. No DRM, please! Record LOTS of your concerts and sell those, even let fans subscribe. What about an Amy Winehouse subscription, where I can stream concerts AS THEY HAPPEN? Sitting here at my computer, if you were singing in some club somewhere and I could peek in, I certainly would pay for the privilege. I would sign up to get email about your appearances and if I was in the mood, I would stream a concert for a few bucks. I would pay cash money for a new song you felt like singing and immediately posting, especially if it was a cover of a Motown tune. And what’s up with not selling your first album on iTunes?
  • SMART TICKET PRICING. How insane is it to let scalpers make ten times as much money as the artist makes on a ticket to a concert? Tickets for any event that has any chance of being oversold should be conducted by a dutch auction. People enter how much they are willing to pay to see the act. (The mimimum price can be set at the levels they would be in a regular sale.) After a designated time period, the top bidders get the ticket–at the price of the lowest bidder who made the cut. (If there are 1000 seats in the concert hall, and 5000 fans bid, those thousand people who bid highest get in. Their credit cards are charged what the lowest sum bid among those thousand.) This way, fans are sure to get in and scalpers can’t play. And you get the bulk of the money.

In the long run, there’s got to be a different model, different kind of relationships between artists and labels, artists and fans. Today I saw a great article in the Times about how artists trying to break through are using the Net to get going. As the writer (the excellent Clive Thompson) notes, though, it’s not for those who have already made it.

Subscription Homesick Blues

Saturday, April 28th, 2007

I was surprised to see it treated as news that Steve Jobs commented to Reuters reporter that he was still opposed to selling music on a subscription model. Slashdot even picked it up.

This is news on the “Franco Still Dead” level. Jobs has consistently dissed the all-you-can-eat model of music. Since Day One of the iTunes store (4 years ago) he has refused to concede anything to the Rhapsody’s of the world. I last asked him about it last October, and this is what he said:

We don’t see it. We just don’t see a demand for it. And we’ve seen all the subscription services crash and burn and you can ascribe the reason because it wasn’t easy enough, but I think the real reason is because people don’t want to rent their music.

It was almost identical to his answer every other time I asked him. (Maybe I should have led my Newsweek story with this and put out a press release.)

But I’ve played with subscription models and they keep getting better. There is something magical to getting any song you want, any time you want it, and not having to worry about paying more for it. The standard complaint made by subscription skeptics is that when you stop paying for music, you don’t have any more. This doesn’t seem to stop people from purchasing electricity. In reality there is one and only one huge hurdle to subscriptions, and that is that in two of the three places where most people listen to music — in the car and on the go — it doesn’t really work. (At home, it works fine.) Eventually, if you believe that wireless Internet access will become available everywhere, the problem will be slam-dunk solved.

Way before that, however, I suspect that even Apple will hop on the bandwagon, and that will indeed be news. I can envision how it will unfold. At some future Macworld Expo, or launch event of a new iPod or something, there will be an announcement of a new scheme by which iTunes customers can get any song they want, anytime. Maybe the fee will even be rolled into a .mac or iPhone subscription charge. In any case, when I visit Steve Jobs after the talk for the usual post-presentation interview, I’ll open by asking him why he is now offering subscriptions when until that moment he consistently insisted that people don’t want them. (Just as I asked him, after the 5G iPod offered video, why he changed his mind about people wanting to watch programs on small screens.)

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And I can envision his answer. “Yes, I said that,” he’ll admit. “But we figured out, for the first time, how to do subscriptions right.”

The Album Version

Thursday, April 5th, 2007

I wanted to buy two albums.

The new Arcade Fire. And the new Ry Cooder.

I would mostly be listening to these in the iTunes ecosystem. So the choice, really, was to buy them on iTunes or buy a CD somewhere. I have Amazon Prime, so the price I pay for CDs on Amazon doesn’t involve shipping costs, and it’s often the best available price. I also very much prefer to have my songs free of DRM. As a result, I generally buy physical CDs and rip them. I do buy individual tracks on iTunes, and vow to burn them immediately on CD for backup, but don’t always get around to it.

Right now, all iTunes songs have DRM, so I went with Amazon. The price for the Arcade Fire was $9.99, same as iTunes. The Ry Cooder was $14.99, which cost two dollars more than iTunes. But getting the packaging and freedom was certainly worth it.

But what about when iTunes drops DRM? My guess is that the Arcade Fire record, distributed by an indie label, will be pretty quick to follow EMI. Ry Cooder is on Nonesuch, a branch of Warner Records, led by DRM hawk Edgar Bronfman, so that probably won’t happen with Ry. But say both were selling without DRM, and the higher sound quality that the new format offers. Would my behavior be different?

Well, not really. Unless I were desperate to hear Arcade Fire this minute, I would get the CD for the same price. Better value. It’s already backed up, and I get all the programming. iTunes includes a booklet with the album, but I’d have to print it out myself. The CD also has somewhat better sound quality than even the new format, though I’m not sure I’d really notice.

With the Ry Cooder album, I would save a couple of bucks with iTunes. But for a couple of dollars, I get the package, a pre-burned CD, and that bit of extra quality. So I’d spring for it. The only extra work I do is rip it.

On one hand, the record labels might be happy that I’m buying CDs. But wait a minute. Isn’t it much cheaper for them if I buy on iTunes? They get two thirds of that money. I’m sure they don’t get that much of the price I pay on Amazon. Also, there are virtually no expenses when I buy from iTunes. No pressing, printing, warehousing, shipping, and so on. And no danger of returns. It’s a much much MUCH better deal for them. So much more that if they had a significantly lower price, it would still be better for the labels to get me to buy digitally.

What’s more, at these price points, even people like me, who aren’t living on student budgets, are thinking twice before we buy albums. I BUY at least one album a month, even though I know how to get albums for free on the Internet. So I am a great customer for the music industry. Would I buy more if the price were half as much? I think so. What if the price were a quarter as much? Certainly. A LOT more. There probably is a price point where someone could simply mention an interesting album to me and I would buy it without knowing much more about it. I would probably even fill out a form with artists I love, with the understanding that when those artists came out with new stuff, there would be automatic downloads and charges to my account. As it is now, every time even someone whose music I adore, like Ry Cooder, has a new CD, I go through at least a brief thought process and check of the reviews before I buy. What if, during that process, I’m at a friend’s house and that friend already has the CD? My laptop is in my backpack. Would I borrow the disk for five minutes and get a free copy?

You get the idea. But the labels don’t. Their fear is that if they sell music for less money, people will think that music has less value. But that’s the irony. The advent of digital music has indeed made music less valuable, not in terms of how much we might enjoy it, but in terms of pricing. Pricing depends on scarcity, and scarcity will never be part of the equation in the music industry again. The obvious path for the labels is to accept abundance, and seize on it, making abundance part of our music experience.

Getting rid of DRM is only step one in this process. The next obvious step is lowering the price, so it’s drastically more convinient to get lots of music legally than it is to ferret it out from the infringing world.

Instead, they raised the price. Sigh.

London Calling

Monday, April 2nd, 2007

As noted, the EMI Apple press conference was not a command performance of “Revolution No. 9.” Instead, EMI was the first domino to fall in Steve Jobs’ proposed elimination of DRM from the iTunes store. That’s good, very good. But as I wrote in this column I posted today on Newsweek.com, I find it weird that the songs in the new format, which are DRM free and have much improved sound quality, cost 30 cents more. I can understand if the price increase were attributed solely to the upgrade in sonic capacity. (In fact, I wrote a blog posting here hoping that when labels sold songs at higher quality, that people had the option to upgrade instead of having to pay from scratch.) What bugs me is that Apple and EMI both seem to believe that dropping DRM is a feature that people should pay more for. To me, giving up on DRM means removing it from all versions of one’s product. Once you conclude it doesn’t stop piracy, it’s pointless. So why not get rid of it altogether on EMI songs (and others who chose to follow) and then have two versions: a high and low sound quality?

Ultimately, I think that prices should go down in general, and that if this effort is a Trojan horse to get the price past 99 cents, it’s ill considered. The competition, after all, is the free filesharing services (and music from friends, etc.) that still proliferate.

Beatles finally on iTunes?

Sunday, April 1st, 2007

Just got an invite to an EMI press conference in London on Monday for “a new digital offering.”

Special guest for the event? Steve Jobs.
Don’t think I’ll make it in person but I’ll be watching the webcast at 8 am NY time.
EMI, btw, is the Beatles record label.

April Fool watch: Yes, this came on the day of hoaxes, but if it really does look legit. Comes from the proper EMI pr guy, doesn’t go over the top by spilling the beans, etc. If it is a joke, it’s brilliant but my gut says genuine.

UPDATE.  It’s not the Beatles.  EMI is the first major label to agree to sell songs DRM free, at higher quality.  It will cost about 30 percent more for these when you buy a single track, though when you buy an album you get the better-sounding, no DRM version automatically.

It’s not TV, it’s Apple TV

Thursday, March 29th, 2007

I posted a review of Apple TV on newsweek.com. Basically, I liked it, though I see it as step one in an evolving platform. Though Apple TV was unusual in that it was preannounced (but not unique, since iPhone is now on vaporware countdown as well), Apple is not preannouncing where it will take the unit.

A couple of things that I didn’t manage to get into my fairly lengthy review. What’s the deal with the mystery USB port? Apple explains its existence by saying it’s for diagnostic purposes. But Apple isn’t denying that at some point the port could be used for something else. External hard disk? Other devices? Quien sabe. Also, I had Apple set me straight on how one could get a home movie, made in iMovie, onto the Apple TV. It’s easy, but not obvious. You have to export it to the latest version of Quicktime, chooseing the Apple TV format, which is available only under the advanced settings option of the menu. Then save it to the desktop or somewhere, and from there import it into iTunes. I expect that soon a new version of iMovie will have a one-click “export to iTunes in Apple TV format” button like it does with iPod.

The most fun I had with Apple TV is shuffling songs. (Hey, there’s a shocker.) Since I sometimes put strange stuff in my iTunes library it can be frustrating when an unfamiliar song comes up and I have to fumble for the iPod in my pocket or bag to see what it is. With Apple TV it’s a glance away, and I like looking over and seeing the album cover in beautiful hi-def. And of course, it’s nice sometimes to listen to my digital tunes without those buds in my ear.

Better TED than not TED

Saturday, March 17th, 2007

I went to the famous TED conference last week along with scientists, tech moguls, designers, and Hollywood stars. (Goldie Hawn was there, as was Meg Ryan. If you were a mathematician, the next ones in the sequence would be Drew Barrymore –see you there next year, sweetie — and soon thereafter, Alicia Silverstone). I was a media attendee, not a speaker, though I would have been happy to do three minutes on iPod randomness.
Anyway, here’s my report in Newsweek online.

A Great Quote

Thursday, March 15th, 2007

Patti Smith in the New York Times, on the present generation of maverick music lovers:

“The Internet is their CBGB.”

Lost

Sunday, March 11th, 2007

So my iPod is gone. It’s been over five weeks since I last saw it and by now I know in my bones that it’s not going to turn up somewhere. It’s either been stolen, or lost and then stolen. I’ve been through the Kubler-Ross stages and now have reached acceptance. It’s not going to turn up.

The iPod in question was only a few months old. I got it as a gift to myself for completing The Perfect Thing. It is inscribed, in fact, “The Perfect Thing, October 26, 2006.” That was the publication date of the book, five years to the day after the original iPod came out. If you ever see an iPod with that inscription, feel free to confront the “owner.”

The original iPod that came out five years ago cost $399 and held 1000 songs. My iPod cost $350 and held up to 20,000 songs. It could also play videos and movies and podcasts and games. I had gotten pretty good at a miniature golf game.

Someone else is playing it now. Are you that person? Are you playing the courses that opened only after I beat par of the previous course? Are you shuffling through my playlist, jumping from a tune from the Arcade Fire concert in Montreal last January to Bob Dylan and Joan Baez singing “With God on Our Side” from the Newport Folk Festival in 1963, and then to the Rolling Stones? Have you browsed through my family photos and scanned my contact list? Did you watch that episode of “CSI: Las Vegas” that I put there to view on an airplane trip?

If your answer is yes, I beg you: give it back.

I am not alone. Look through Craigslist, do a Google search for “I lost my iPod” and you see people like me similarly suffering. (Though very few have been in the embarrassing position of writing a book about the iPod and then losing one.) I recently was on the campus of a small liberal arts college and discovered that the student newspaper had half a dozen notices of lost or stolen iPods, with blood curses invoked on those who are enjoying the lost devices. They offer rewards for the return of the iPod, or threaten violent consequences if the iPod is not returned. Ha. They will not see their iPods again.

They, like me, will eventually trudge to the Apple store and buy another.