Google Announces 'Ads Free, Just Buy a Tee' Program

January 16, 2012
-Palo Alto, CA (TMD News)
In a surprising move, Google, (NASDAQ:GOOG) the country's largest generator of ad revenue, (their earnings for Q3 2011 were $9.72 billion) announced today that it would no longer be charging for ads through their successful "ad sense" and "adwords" programs, but would instead be giving away ad space for free and looking to Tee Shirt sales to generate all future income.

A spokesperson for Google, Hans Vet Allt, explained the change, "This is the business model that has been so successful for the music industry for a number of years now, and our marketing data indicates that individual consumers, small business and corporations would rather pay for Tee Shirts over any other good or service.” The statement released by Google also noted that the company believes that Tee Shirt sales are, “The future of all monetary transactions."

Vet Allt went on to announce that after Google finishes destroying SOPA and PIPA it would lobby Washington D.C. hard to abolish the Federal Reserve and replace it with Old Navy, turning the U.S into a merch based economy.

Break It Down. Music Sales in 2011

Soundscan released their 2011 numbers for music sales. As we saw earlier, the first two quarters of the year saw a boom in music purchases and although sales lost some of their momentum during the last half of the year, 2011 was the first year since 2004 to see growth in album purchases from the previous year.

Before we go through the numbers, it is worth restating that TMD is primarily written for musicians and listeners of smaller genre categories. Independent music. As we will see, the major labels always claim the top prizes and determine the direction that the rest of us follow, if we can. A big IF.

The Good News: Barely
The good news is that album sales in the US grew a whooping 1.3%. Not much, but better than the landslide that has been happening for most of the 2000’s.

As always, the main forces behind these numbers are due to a handful of albums. This year there were only 13 albums that sold 1 million units or more. Led by Adele’s “21”. Those 13 albums make up only 0.0169% of the 78,875 newly released albums Soundscan counted for 2011. So for Independent musicians the story is pretty much the same. Only artists on labels can make it big, and realistically, even for those artists, the odds are still slim to none.

A Pointless Debate

Recently David Touve, an Assistant Professor of Business at Washing & Lee University posted a blog asking “Is a stream on Spotify (or any music service) really worth less than an iTune sale?”

His attempt to show that an iTune sale or a Spotify stream are basically worth the same, in terms of payment to the artist, is arrived at by fuzzy math that assumes a listener will play a song purchased from iTunes 250 times. (Where he gets this number is anyone's guess. A quick look at your iTunes app will show that most songs get played far less.) By prorating the cost of the song by 250 plays, he would have us believe that the price per play is $0.0028, which he believes compares favorably to the urban myth of Spotify's $0.0033 per stream payments.

The Takedown-Why the DMCA has failed

A few weeks ago I received an email from a friend letting me know that my music was being used on a website as background music. On the site there was no mention of my name, the titles of the song or my record company. My friend, being smart, figured that I would never have allowed my music to be used by the site, much less without any link back to me or my record label.

Since I had found other sites in the past using my music, or my writing, without my permission, I took this seriously. Sure enough, when I checked out the website in question, they had illegally embeded the song of mine. As I continued to poke around the site I discovered that they were using two additional songs of mine, all without permission, and the first song was used on two pages. So four cases of blatant copyright infringement.

Suddenly all of my work plans for that day came to a grinding halt as I now had to spend time searching online for who owned the website and who they used to host it. Then I had to start writing the email letter to notify the owner of the website that they were illegally using copyrighted material.

Coldplay sets a Digital Record without Streaming

-This post has been updated-

A few weeks ago Coldplay announced that it was not going to post its new album Mylo Xyloto on streaming sites like Spotify. To date they are one of the larger acts to publicly not allow their music to be streamed. At the time Coldplay's decision reportedly embarrassed their record label, EMI, who has a licensing deal with Spotify. But EMI may be singing a different tune now after Coldplay's new album Mylo Xyloto hit a "one week digital sales record" in the UK. According to a report by Digital Music News of the 208,343 units sold in the UK over 40%, or 83,000 were digital. U.S. sales figures from Soundscan are pending. In terms of percentage, digital album sales are still growing rapidly and Coldplay seems to be benefiting from this.

Digital Royalties at Risk

Sirius/XM is considering doing direct licensing deals with the labels. In plain terms this means that royalties would no longer be paid through SoundExchange, the government PRO that currently pays royalties for digital music. Last quarter they paid $88 million to artists and publishers.

Under direct licensing deals that money would instead go to the labels, who would then pay the artists. And we all know how good labels are at paying artists...

Pete Townshend's Lecture to the BBC

Pete Townshend was asked to give a lecture in honor of the legendary radio DJ John Peel. Townshend touched on a lot of topics, most of them about the world of music as it exists today. He had some very provocative things to say, such as calling iTunes a Vampire, thoughts about fans "sharing" music and that artist should be paid when people listen to their work. Payments to artists was a constant thread in his talk. He also gave a glimpse of the "Inner" Pete Townshend.

Here are some of the take-away quotes:

"Music publishing has always been a form of banking in many ways, but – in cooperation with record labels – active artists have always received from the music industry banking system more than banking. They’ve gotten: 1. editorial guidance; 2. financial support; 3. creative nurture; 4. manufacturing; 5. publishing; 6. marketing; 7. distribution; 8. payment of royalties – the banking.

Today, if we look solely at iTunes, we see a publishing model that offers only the last two items as a guarantee – distribution and banking – with some marketing thrown in sometimes at the whim of the folks at Apple."

He asks why iTunes, like records labels, can't provide some of the the "services to the artists whose work it bleeds like a digital vampire Northern Rock for its enormous commission?"