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Business, business models and law of music

Music is at the forefront of change for content and intellectual property business models involving the internet.

This article begins with the personal tale of Jonathan Coulton, a computer programmer who quit his job to became a full-time singer and songwriter through the magic of blogging, online music distribution and networking.

The article ends with a list of our writing on the business, business models and law of music.

Jonathan Coulton, Musician 2.0

In Sex, Drugs and Updating Your Blog, the New York Times last month followed the personal tale of Jonathan Coulton (photo credit: Jennifer Karady). "In September 2005, he quit his job as a computer programmer and, with his wife’s guarded blessing, became a full-time singer and songwriter."

He stepped on a treadmill of blogging, writing a song a week, uploading audio tracks to his website, selling CDs online, and using site traffic statistics to select concert location.

Most of Coulton's songs are free-of-charge for listening online or as MP3 downloads.

However, free-of-charge fans have made and uploaded to YouTube about 50 music videos. For example there is Code Monkey here and here. Fans have also created Wikipedia pages for him, his songs and discography.

Coulton has been on an online or digital treadmill. In mid-2006 the band released a music video choreographed on treadmills which has been viewed maybe up to 20 million times so far (there are many versions, putting it on YouTube's top 10 most viewed of all time.

In his well-researched NYT article, Clive Thompson writes that within less than a year:

"More than 3,000 people, on average, were visiting his [Coulton's] site every day, and his most popular songs were being downloaded as many as 500,000 times; he was making what he described as “a reasonable middle-class living” — between $3,000 and $5,000 a month — by selling CDs and digital downloads of his work on iTunes and on his own site."

"In total, 41% of Coulton’s income is from digital-music sales, three-quarters of which are sold directly off his own Web site. Another 29% of his income is from CD sales; 18% is from ticket sales for his live shows. The final 11% comes from T-shirts, often bought online."  ...

"This is not a trend that affects A-list stars. The most famous corporate acts — Justin Timberlake, Fergie, Beyoncé — are still creatures of mass marketing, carpet-bombed into popularity by expensive ad campaigns and radio airplay. They do not need the online world to find listeners, and indeed, their audiences are too vast for any artist to even pretend intimacy with. No, this is a trend that is catalyzing the B-list, the new, under-the-radar acts that have always built their success fan by fan. Across the country, the CD business is in a spectacular free fall; sales are down 20 percent this year alone. People are increasingly getting their music online (whether or not they’re paying for it), and it seems likely that the artists who forge direct access to their fans have the best chance of figuring out what the new economics of the music business will be."

Thompson's article provides a neat case study illustrating music business trends on which we've also written in Lightbulb. Last month three of our articles were featured as Guest Editorial in Immedia, one of Australia's leading music business websites.

7 music industry articles

I emailed a link to the NYT article to a Sydney singer/songwriter friend. It prompted preparation of the following list of seven articles I've written in 2007 on the music business, mostly examining changing music industry business models and relevant copyright and other intellectual property law.

1. Perceptions of value on 42nd Street

This post most closely picks the trends expanded upon in the NYT article. The post ends with this stence "Music industry folks in the middle of their own depression, wondering what the future holds, should now join with me to sing, and with verve: "Come and meet those dancing feet, On the avenue I'm taking you to, Forty-Second Street." CD sales keep declining, yet Internet communications and distribution opportunities makes this one of the most interesting times to be a musician.

2. Signed, Sealed, Delivered, I'm Yours

The lesson of this one is make sure you have a legally binding contract before you invest in a music event.

3. Grappling with fallacies: music formats and DRM

Music business investors also have to eat. This post grapples with the fallacies of those with utopian dreams about how great it would be if music was free-of-charge.

4. Music formats and law: commercialisation of 45-rpm records

The iPod has wrapped a very clever business model around other people's entertaining content. This triggered research into how, for some decades from the 1950s, 45-rpm records wrapped a very clever business model around the insatiable desires of teenagers. History repeats itself.

5. Music Business Entrepreneurship: Eulogy for James Brown

This article is a personal favourite. The history of a succession of 20th century African-American musicians and performers who made money for others and died destitute is heart-breaking. James Brown stands out from that crowd. He created and retained wealth. One way he achieved this is by keeping a very tight control over his intellectual property rights.

6. Viacom to YouTube: "I want my MTV"

There's a lot of dollars at stake for Viacom and others whose revenues depend on licensing and distribution of video content protected by copyright law.

7. Digital music technology and copyright timeline

Technology and copyright issues for digital music are hot topics in Australia and worldwide.


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