This is the third in a series of articles about The New Music Business.

Before I undertook the writing of this series on music business I wrote about the decline of CD sales and mentioned a book called The Long Tail. I mentioned that book as an information resource to help you understand the way the internet is affecting the marketing and sales of CDs. I know there are objections to The Long Tail and I’ll discuss those in the next post, but here I want to review ideas contained in The Long Tail for those that haven’t read it.

Fist a definition. Wikipedia defines the statistical distribution feature known as the Long Tail, in this way.

In these distributions a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually “tails off.”

Take a look at the image to the right. The Long Tail is represented by the yellow portion of the graph.

The book, The Long Tail, was written by Chris Anderson, editor of Wired magazine. Anderson focusses on the long tail in the retail distribution world. He talks a lot about Amazon.com and Rhapsody (he didn’t have access to figures for iTunes). The basic idea is, the internet has changed the way people shop and interact with culture. Before the internet people only knew about music that was played by local bands or on their local radio, and was sold in their local record store. He describes this as a “world of scarcity” where retailers simply did not have enough shelf space to carry every recording that was available. The ones they did carry were the hits. The hits live on the left side of that curve. There are few of them and they sell a lot.

Our culture, and the marketplace, is changing though. (more…)

This is the second in a series of article about The New Music Business.

I’ve been a bit out of pocket this week as I’m on vacation, but even so I noticed the news concerning EMI’s decision to license DRM free tracks to Apple for sale in the iTunes Music Store.

DRM, for those that don’t know, stands for Digital Rights Management. Basically DRM is copy protection. It’s purpose is to prevent consumers who purchased the music as a digital download from coping that track at will. In the case of iTunes, some coping has always been allowed. You can burn discs containing the tracks you downloaded and you can copy them to a limited number of computers. The large disadvantage for consumers has been the lack of freedom this brings. If you buy DRM enabled tracks from iTunes you can only play them on an Apple iPod, not another mp3 player of your choice. The new DRM free tracks give you that freedom, but at a price…for everyone.

The DRM free tracks will be sold in the iTunes music store, right alongside the standard DRM enabled tracks, but at an increased price. If you want the flexibility of DRM free, the track will cost you $0.30 more at $1.29 each. And iTunes still won’t sync with another device so you’ll have to take those tracks outside the nicely organized iTunes environment to load them onto something other than an iPod. The tracks also come at a higher resolution than the standard tracks, jumping from a bit rate of 128 kbps to 256 kbps.

The consensus of analysis seems to be that increased bit rates are good for everyone, but that’s about it. DRM free is nice, but increased price isn’t. Add to that the increased confusion of the consumer experience when trying to purchase tracks, and many people feel this isn’t that good a thing for the iTunes store. I think the real test will be to see if the other major labels follow EMI’s lead. If they do, I would guess Apple will drop the DRM tracks altogether, even if it means an increased track price in the store. You’d be back to a single track price standard, with higher bit rates and no DRM.

Will any of this matter to consumers? Will they buy more tracks rather downloading them illegally? You tell me…

This is the first in a series of article about The New Music Business.

To get us started on this topic of The New Music Business I’d thought we talk about an article that appeared in the New York Times a couple days ago titled, The Album, a Commodity in Disfavor. It’s the story of a Rap/R&B trio that recently signed a “record” contract for two songs. You read that right. They aren’t recording an album, just two songs. Why?

Only true fans are buying full albums. Most people don’t really do that anymore.

The article goes on to say that consumers who purchase music digitally (i.e. downloads) are buying way more individual tracks than they are whole albums. The margin is 19 to 1. Even if you consider that a whole album download contains 10-12 songs, there are still more tracks purchased individually than there are corporately, in the digital download market.

To be fair we must admit that physical CD sales still outweigh download sales. But for how long? We recently reported that CD sales, which have been steadily declining for the last seven years, dropped by 20% the first quarter of this year, while sales of digital tracks have increased by 16 percent during the same time period.

Paul Resnikoff, editor of Digital Music News gives his explanation for why the trend will continue. (more…)

A lot has been said recently about the business of music here on The Bluegrass Blog. We have covered the recent changes in copyright legislation surrounding internet broadcasting. We’ve also recently talked about the decline in sales of physical CDs in the overall music industry.

While this blog is mainly concerned with news about bluegrass music, we find these topics important ourselves, and feel that the state of the industry as a whole is important to our many readers who are involved with bluegrass music on a financial level. Ours is a small genre that does differ in many ways from the mainstream music industry, but ultimately we are still impacted by changes to the overall music business.

Like it or not the industry is changing. What exactly are those changes? How will they affect bluegrass music professionals? What about the fans? Will the changes be for the better, or worse? These are just some of the questions you may be asking yourself.

In an effort to answer these questions, I have undertaken the task of writing a series of articles discussing recent changes/trends in the music business, and giving some concrete ideas and examples of how bluegrass bands large and small can navigate these changes and take advantage of the opportunities they might provide.

I’m calling this series of articles The New Music Business and will begin each post title with NMB. I encourage you to share you thoughts, ideas, and questions in the comments section of each post as we go along. Let’s get started!