Monday, July 28, 2008

The Culture Wars on CBC Radio 2

Short blog this week.
I wanted to draw your attention to this article by Robert Everett-Green of the Globe & Mail which is the first in hist three part series regarding culture wars that are currently being fought out on CBC Radio 2.

It's a fascinating topic and revolves around the government's role in defining and promoting culture. The crux of the argument is this: The CBC (and by extension the elected Canadian government) should promote "permenant music", and eschew "ephemeral music", as it always has... until now. At least this is how the debate is being framed by the old guard. Of course "permenant music" is code for Western Classical music, and "ephemeral music" is code for contempary [pop] music. In actual fact the "ephemeral music" could hardly be considered mainstream fare and is usually on the experimental side of the equation. No matter. In the "permenant" camp we are on a slippery slope to cultural ruin.

Why I find most interesting is that Canada is not unique in this view that Western Classical music somehow represents some version of the truth. If you look at all the state run broadcasters, they all dedicate at least one station to classical music. Even KBS of Korea feels obligated to dedicate a station to mainly Western Classical Music when there's plenty of eastern classical music out there.

While I enjoy Western Classical music as much as the next guy (do film scores count ;) ), I welcome this debate since it exposes the undefinable nature of art. To define and quantify culture and art is chasing rainbows, but you learn a lot along the way. In the meantime, I'm happy to enjoy the debate.

Monday, July 21, 2008

3G iPhone: Revolution or Evolution for Internet Radio?

I happened to walk by a few stores selling the new iPhone last week. They instantly sold out and pretty much everyone in line had been there since the store opened its doors. There was even some dude who was standing by himself since 3pm the day before. I'm sure there were several others like this guy around town at other stores. I never see women doing this though...

Here in Canada there is only one wireless carrier that can sell the new iPhone. Namely, a company called Rogers. Since they're the only GSM carrier in Canada they basically got the iPhone by default. (Interesting factoid, Rogers was founded by Ed Rogers Sr. who invented and made a fortune from the world's first batteryless radio - prior to Rogers' 1925 invention, radios required expensive batteries). Rogers flouted their monopoly position by gouging customers, and generated a lot of bad will which they're still recovering from. They backed down a bit, and offered a 6GB plan for an additional $30 per month. But the cheapest plan costs $60/month, and only gets you 150 minutes of outgoing talk-time. Most people will want at least 300 minutes talk time and will have to spend $75/month for that. You'll probably also want call display, so add in another $15/month. Oh, but we still need to add in the dreaded System Access Fee which is another $6.95, and of course the 911 service fee for $0.50. We're now up to $127.45 per month plus tax. But not so fast, you still need to pay for the phone itself ($199 for the 8GB model, and $299 for the 16GB model). To be safe, I recommend the 16GB model. There is also a $35 activation fee. This gets us to $324. If I add in all the taxes (federal GST + Ontario PST) I get a whopping $366.12 plus $144.02 per month. Oh, and that requires a 36 month contract. Damn!!! To put things in perspective, I can get a brand new Kia Rio for zero down and $167.06 per month.

Looking at the economics, it's hard to imagine the iPhone will be a truly mainstream device for some time to come. The biggest problem of course are the wireless carrier fees. While I suspect the carriers will try to provide more value for the price (e.g. increase your data quota), I'm not sure if prices will decline so quickly.

But there are other problems with the iPhone. For starters, it doesn't provide decent support for background applications, so you can't really listen through an Internet radio application and surf the web at the same time (there may be workarounds to this that I'm not aware of though). The iPhone also lacks a proper QWERTY keyboard like the Blackberry's have. The design is so pure I wonder if it ever will. I know for a lot of people this is a major showstopper.

I'm not trying to poo-poo the iPhone. It is easily the greatest smart phone ever created. No other device of similar form factor behaves nearly as well, and is as easy to use. The iPhone represents a benchmark and toehold for practically all future cell phone development. Just the touchscreen technology alone with its pinch gesture is incredible. It certainly has the potential to usurp the PC as the de-facto computing device. Steve Jobs may have the last laugh after all.

But will the iPhone provide the much needed Internet radio lift-off that we've all been waiting for? I certainly think it will be a shot-in-the-arm. Internet radio is an "application" that does a nice job of showing off the 3G bandwidth improvements, so I think a lot of people will take advantage of this. However, the poor support for background applications may hinder its adoption.

Ultimately, I see Internet radio as a niche application until the advent of dirt-cheap wireless data. The base fees for wireless data alone relegates these services to the wealthy (or those who live outside their means). The roaming fees are even scarier, and if you've got your Internet radio tuner going while driving your car outside of the city, you may be in for a nasty surprise after your next wireless bill rolls in.

I still stand by my guns that WiMax is really the only viable path we have for mainstreaming Internet radio. If things go according to plan, there will be no distinction between wireless broadband and wireline broadband. We'll also see a slew of new hardware devices to further simplify Internet radio's adoption. The bad news: none of the telcos or cablecos are in any rush to see this happen.

Stay TUN3D.

Monday, July 14, 2008 Launches new Royalty Scheme: Activism or Confusion?

This week launched a new royalty scheme. What makes this royalty scheme new and original is the fact that unsigned artists (i.e. artists that are not affiliated with a label or collecting agency) now have the opportunity to collect royalties.

To be sure, there is a positive message here. The largest collection agency - SoundExchange - has been widely criticized for only paying royalties to 31,000 artists through 3,600 labels. It is worth noting that there are tens of thousands of artists that do not get any royalties. There are also questions of transparency (to be fair, some of these restrictions have been mandated by the Copyright Act)

However, it's one thing to criticize the shortcomings of an existing scheme, and another to do something about it. When all is said and done it is worth asking: Is this this new scheme beneficial or detrimental for artists and radio at large, or does it even matter? Time will tell of course, but that's not going to stop an amateur pundit like myself from throwing his two cents in.

Some relevant background: is an automated Custom Radio service that builds playlists based on what music you already listen to and by extension, what others who also like the same music also listen to. It works reasonably well, but I've argued that human DJs can do a far better job. Because utilizes the Wisdom of Crowds (or tyranny of the masses depending on your perspective), it is important to note that artists (or anyone claiming to be an artist) are now in a position to game the system to boost their music's popularity - in much the same way Google is constantly being gamed to boost a site's PageRank. While this has always been a possibility with, it's not as likely given that artists receiving royalties through collection agencies are confirmed artists. Now, it may be possible for an enterprising hacker to create a song and game its popularity, and get paid for this. That said, the damage is not so much that this hacker is bilking for royalty cheques. Rather if it ever got out of hand, it could undermine the integrity of the system from a listener's perspective.

Getting down to the nitty gritty, what is being paid out here? To simplify matters, I'm going to ignore the on-demand download service (which pays out higher royalties), and focus on the radio royalties. If you read the Terms and Conditions, the payout for radio is divided into two categories: Premium and Free. I'm going to attempt to figure out what the payout might look like, but it would be nice for to publish some actual numbers to give us a clearer idea of what to expect.

Okay, so for the free service, artists receive:

10% of the Share of’s Net Revenue from the free radio service

For the personalized premium service, artists receive:
the greater of 10% of the Share of’s Net Revenue from the personalised radio service or US $0.0005 for each complete transmission on the personalised radio service of a track which forms part of Your Content transmitted on the service.

Let's contrast this to the royalty rates set out by Copyright Royalty Board (payable through SoundExchange): For this year, 2008, SoundExchange is entitled to collect $.0014. Next year, it will jump to $.0018, and in 2010 it is $.0019. Furthermore, SoundExchange states that it pays 45% of their collected royalties to Featured artists, and 5% to non-featured artists. I'm not quite sure what happens to the other 50%. I think it has something to do with the split between performers and song writers (but don't quote me on that one). The language used in their 2007 annual report is confusing, and no concrete examples are provided. Furthermore, since there isn't much transparency we don't have any concrete examples to go by. Beyond that, it's not clear how much a label hands over to the artist at the end of the day. The whole thing is utterly confusing. SoundExchange could clear this up by providing a few examples of how a dollar is divided up when it's collected, and what an actual artist is getting. But they're a slipperly bunch, and won't even tell you what constitues Fair Use (rather listing a bunch of things that are possibly NOT Fair Use). Aaarrgh!

In an attempt to simplify things more, I'm going to focus on featured artists and the premium service. From what I can tell, a Featured Artist (e.g. an artist like Moby or Eminem) would still get more through SoundExchange than through's royalty scheme. So, Moby and Eminem would be crazy to forfeit SoundExchange's deal and go for's scheme.

However, once you start crunching the numbers a subtext emerges: Namely, (and I'm not going to pretend this is breaking news) you are either a Featured Artist (like Moby or Eminem) , in which case you can earn a living making music. If you're not, then you're probably working towards becoming (or working with) a Featured Artist. Looking at Last.FM's model I have to wonder if a $10 cheque once a year is really going to make a difference for anyone (and as an artist, you need your track to be played in full at least 20,000 times to get just that!)? Of course life is not so cut-and-dry and there are other options still on the table. But realistically you better be prepared to hustle your ass by continually marketing yourself and/or showing up for live performances, even if that means swallowing your pride from time to time and doing weddings and Bar & Bat Mitzvahs.

I came to the conclusion ages ago that the music business is both fun and insane. As a career path I don't recommend it. However, if you can find the time, and you enjoy it, go for it. Don't expect to make very much money though - there are too many people willing to work for nothing. Coming up with original sounds and lyrics is also harder than it looks. However, if you're one of the few that's been blessed with a combination of talent, luck, and a strong work ethic, and you can find a respected label to back you you may be in a position to go full time and pursue music as a real career. At this point, you're going to want to protect this privilege. Hey, it's good work if you can get it.

As for this royalty quagmire. I'll let you know if I ever figure it all out.

Monday, July 7, 2008

Holes found in The Long Tail theory. What does this mean for radio?

In a recent article published in The Harvard Business Review, Anita Elberse presents strong evidence to suggest that Chris Andersen's Long Tail theory may be overstating the facts.

For those of you who don't know what The Long Tail means, I'll briefly explain the background. The Long Tail takes its name from the long tapering line of the normal distribution when presented in line-graph form. This graph is also known as the bell curve (for its resemblance to a bell). The typical example people site when talking about bell curves (and the long tail, before it was called this) is IQ scores. Most people have an IQ of around 100 (in fact IQ tests are occasionally re-calibrated to ensure this). Most people have either slightly above average IQ or slightly below average IQ. But the farther we go in either IQ direction (i.e. those that are extremely "mentally disabled" or "supergeniuses") the fewer we see, and they drop off from the curve quickly. The same goes for purchasing patterns. We know that most people cluster around the same movies, music, and television shows, and the more exotic we get, the fewer people we see consuming these products.

What The Long Tail theory argues, is that because the Internet creates such a massive marketplace, it is now possible to serve these exotic tastes like never before, and so industry is moving away from serving up hits and blockbusters, and moving towards niche products. While I have no doubt that there are more opportunities to sell niche products over the Internet, the big question remains: is there as much spending and interest in hits and blockbusters? Ms. Elberse's research suggests that in fact we do not compromise on the blockbuster front. Rather our niche purchases are just more sliced up, and we make more of them. To use an analogy with food: We're still buying meat, potatoes, milk, and all those staples as we did before (and probably more so). But instead of going out to a Chinese restaurant once in a while, we dine out more frequently and those outings are now split between: Dim Sum; Sushi; Ehtiopian; Korean; Indian; Persian; etc.

But how does radio relate to The Long Tail? The short answer is: In a big way. The long answer is...

From one perspective, radio has always been the biggest influence when it comes to pop music hits. While I don't believe that radio DJs can actually control what constitutes a hit, they can quickly accelerate the popularity of any given song or artist. The hit (or blockbuster) relies on Opinion Leaders to get the ball rolling. From there, the masses will take over, and a new hit is born. Critics point out that this isn't very democratic, and that services like iLike,, and YouTube better serve the masses. However, I would argue that these services effectively replace the DJ with with a hitcounter which serves the same purpose to guide the masses.

Whether it's a poor DJ (or unethical, in the case of Payola) or a gamed hitcounter, we often run into a problem known as Information Cascade and its close cousin GroupThink. This is why we often see songs like "Who Let the Dogs Out" take on a life of their own, without any one person in particular claiming it to be a song they actually like. In fact most people agree it's one of the most annoying song they've ever heard. Indeed, a stinging moment in my own childhood was going to see a film called "Sky Bandits" for my birthday. I happened to see the trailer in the same room as some of my classmates. They all exclaimed "That movie looks awesome, I gotta see it!" I didn't have quite the same reaction, but second guessed my instincts and chose it for my birthday party. It was a dreadful film and we all walked out shaking our heads. To this day my friends will ask me why I forced them to sit through this boring crap.

Critics of radio will say that bands like Metallica thrived without airplay, and point to the successes of "Ride the Lightening" and "Master of Puppets". True, artists don't require radio to be successful. But keep in mind that Metallica's self-titled 1991 album was even more popular, while getting airplay on the top 40. What's the difference between The Pixies "Doolittle" and Nirvana's "Nevermind"? Why do we know The Smashing Pumpkin's "Siamese Dream", but not "Gish"?

It's easy to be cynical and assume that there is some kind of conspiracy at work here. I don't buy this for a second. Chosing to listen to music requires decision making, and decision making is inherently stressful. If we desire to broaden our artistic horizons, there are plenty of DJs and stations to cater to this. Many people simply just want to hear a catchy hip tune to get them through their day. Admittedly, I've made, and will continue to make bourgeois arguments protesting this. But I'm also a realist (and possibly a hypocrite).

But most interestingly, The Long Tail has come to rest on top of radio itself, which I believe will be a driving force of change to how the next generation of hits will arrive. Like never before, we have the most incredible options available to us when it comes to variety of formats and stations. I suspect a lot of people (myself included) will continue to cluster around the big names like Ryan Seacrest and Howard Stern, but at the same time we are in a better position to elevate the discovery process. I don't know if we'll see a radical change, but there is no question in my mind that we're definitely seeing a positive one.