This month we have finally been able to include Spotify sales in our monthly accounting. Initially, the data we received from Spotify did not provide sufficient detail to account to labels on a per track basis. Once the accounting was functional, we had another problem to overcome; the sheer enormity of data, with reports for recent months coming in at over 60,000 line item transactions!. Now that we have successfully designed and tested a workable reporting profile, Spotify accounting will be routine.

There has been much debate recently about Spotify, in particular whether or not it is a viable proposition for labels. Revenue income per stream is indeed tiny, coming in at meagre fractions of pennies.

An encouraging start.
Having managed your expectations on Spotify’s turnover, the positive story here is that Spotify is already, from a standing start, one of our top digital accounts in terms of gross revenue. Viewed quarterly, their revenue growth is currently exponential, with gross turnover for PE September 2009 up 124% compared PE June 2009. This is a considerable achievement for a service that is still in Beta, only live in a handful of territories (United Kingdom, Finland, France, Norway, Spain and Sweden), and who, to date, has spent less than £5,000 on marketing.

We need to re-frame how we evaluate these new streaming services. We seem to be still stuck in a per unit mindset, whereas in the digital world, where there are no fixed costs per unit, it’s all about gross turnover.

The Streaming Backlash
There have even been a few labels who have asked us about withhold content from subscription and streaming services, such as Spotify and Napster, or to hold off and deliver content months after the release date in order to protect a la carte sales.

Personally I think this is misguided. Ever since the launch of “the original Napster”, our industry has struggled to come to terms with the new business landscapes that have arisen from changing technologies. Collectively, we strangled the original Napster, rather than embracing it’s technical merits and creating a workable retail model. Today, the general consensus (even at the BPI) is that this was a mistake. We have been on the back foot ever since.

Recent statistics show no firm evidence of Spotify cannibalising sales from established a-la-carte services. This has also been bourne out from our experience. However there is some evidence to show that it is curbing the habits of illegal downloaders.

The Changing allegiance of Technology
In a way, whether or not streaming services will eat into a la carte sales is a moot point, as in reality we have lost the ability to determine which business model will succeed.. As much as we may wish to preserve the status quo, the consumer will eventually get the services they want, as long as there is the technology available to deliver it. Apple understands this, hence their recent purchase of La La.

Historically, technology was developed by The Producer, and served The Producer.
Today it is often developed by The Consumer to serve only The Consumer.

Any technology we, as producers, create for the consumer must meet the challenge of providing the consumer with the services they want at the prices they are prepared to pay. If we fail at this challenge, the consumer can now simply vote with their feet and circumvent our supply chain, or even create a completely new supply chain. We can try to close this path through legal action, or by cutting an errant consumer’s net access, but eventually technology will always find ways around our roadblocks. I honestly believe there will be no technical solution to our malaise because technology no longer works for us. Our eventual salvation will only come from basic economics. We need to provide the best service at prices that represent true value to the consumer.

Early Days
Spotify is still an immature service, and has yet to build a reputation as a successful advertising platform. Anyone who has used the free service knows that there is currently only a very small handful of relatively minor brands advertising. The income pool is therefore very small. This is bound to increase as the service becomes more popular and reaches a wider audience. More importantly, once more advertising kicks in, there will be a greater incentive for consumers to migrate to the premium offering.

The key to success will be migration to premium. The good news is that the incentive to upgrade is pretty compelling. Premium subscriptions rose 104% in October, following the launch if the Iphone app. I would encourage any or you who own an Iphone, Android phone, or Simbian based mobile to try Spotify’s premium service for a month (There is no minimum contract. You wont get tied in). It isn’t perfect (playlists take too long to load), but it is certainly very impressive, with its ability to stream smoothly over a 3G mobile connection and it’ s off line playback of up to 3,333 tracks. Also, the 320 bitrate files sound fantastic over a home system.

The Dilemma
Of course services will only gain popularity and reach viability if it’s content is up to scratch. A hamstrung streaming service will be an unsuccessful streaming service. Withholding content and delaying releases will ultimately drive the consumer elsewhere, (and unfortunately I don’t think it will be to Itunes !).

Tip of the Iceberg
According to IFPI figures, 95% of downloads earn our industry NOTHING. The key to our future is moving that 95% of transactions over to legal services. Once migration is complete there is scope to see how we can extract maximum value from the market. First of all, we need a market.

We have a good precedent for this migration from free to premium with television. Penetration of pay for TV in the UK now stands at over 50% of households and is still rising. There is still a free service available, but the consumer has shown a willingness to pay for additional choice.

So what about A La Carte ?
None of the above should be viewed as Kudos coming out strong in favour of either subscription or add funded models above all others. We still believe that a la carte offers the consumer a great product, which importantly deals with current preferences to “own” music. Ultimately it is for the consumer to decide which model they prefer. All we can do is ensure they have a genuine choice, and that legal services which reward the artist have inherent advantages over their illegal counterparts.

If premium streaming services see a similar level of penetration as pay tv, with the rest of consumers using either add based service (our “terrestrial tv”) or a la carte (out “BT Vision”), we will all be laughing.

Killing in the Name of… ??

>Andrew Collins ,and most other commentators are right.  The current #ratm4xmas Twitter campaign is madness, as either way, the ultimate winner is Sony BMG. 

Of course, there is an alternative !  
#apples4xmas !
the healthier alternative !

Here is an Itunes Link
Here is a 7 Digital Link
Here is an Amazon link
Here is the link

We even have some tasty 7″s left…
or, treat yourself to the album

Buzzin About 

This commercial message was brought to you by Freestyle Records.

Pimp your Amazon Listing


Amazon now represents a very large chunk of our UK CD business.

You can seriously improve your sell through at Amazon by spending some time adding appropriate content, including reviews, biography information and sales notes to your CDs details page. Any label or artist can submit this information.    Click here , fill in your label details, and start adding content.

Remember to keep your sales notes concise and to the point . You want to draw the potential customer in, not scare them off with a novel !. Avoid long winded, whimsical stories about the artist getting abducted by aliens, or a track by track album synopsis.  If you are digitally distributed by Kudos, audio clips should already be available on the details page for potential customers to sample.  All you need to do is persuade them that its worth a listen.   (I can feel a sales notes primer coming your way in a future blog post!) .

Whether or not your submission is used is Amazon’s call.  If they decide NOT to use your submissions, there really is nothing we can do about it.   Use the “contact us” link on the Amazon page to query their decision.

>Kudos Distributed label Jalapeno Records  have a chance of getting one of their artists,  Smoove & Turrell  on to the Radio 2 Playlist !

They need YOUR vote to be record of the week on the The Radcliffe & Maconie Show.  Winning secures them a playlist spot. 

Here’s the link..
Just follow the instructions and vote using their web form.
At this point I would have liked to quote Mayor Daley and encourage you to “Vote Early, Vote Often”, but we dont really want to mess with the BBC Code of Conduct on such matters, now do we ?

Pirate Blogs

>It’s 4 weeks to release.  You’re promo campaign is building nicely. Press had been overwhelmingly favourable. You’re getting fantastic radio support., and the producers from Later with Jools Holland have been in touch. 

Then you see it.  Your WHOLE ALBUM is posted on a RASH of blogs, with rapidshare links to 320 MP3s of the complete album.  

The good news is that, with a little persistence, you can usually get these taken down. Blog hosting companies like google and wordpress are generally very co-operative when copyright enfringment is brought to their attention, as are file hosting services like rapidshare,

All blog platforms and file hosting services have abuse procedures.

Here is the link to the Bloggers infringement notification form.
Use this if the blog in question is a Google Blogger blog. These have URLs such as

Here is a link to WordPress’s copyright violation procedure
Use this if the blog in question has a URL similar to

Here is a link to Rapidshare’s copyright violation procedure
Here is a link to Megaupload’s copyright violation procedure
Use this if the links to the actual MP3s originate from Rapidshare or Megaupload.

The Big Guns
The IFPI has a global anti piracy unit.  The BPI is its local agent. They have a team of blog crawlers (no……, seriously… that’s what they call themselves!)  who can issue enforcement and take downs on your behalf, provided you are a member of a collecting society that contributes to IFPI’s anti-piracy funding.  For most of you this means being either a PPL or a BPI member. You do not have to be a member of the BPI to avail of this service, and ALL labels should be PPL membersContact with details of any infringements, and they will fill you in on the procedure.

Blogs can be a fantastic source of grass roots promo.  It is just those few errant (and generally mis-guided) bloggers who link to unauthorised content that present a major problem.  It is very much worth embracing those bloggs that genuinely support your music and who understand the importance of music retaining an inherent value.  Do your research, find out who they are, and offer them some promo content… perhaps a specific free mix or edit.  Ensure they include working links for their readers to pre-order or purchase your releases from ITunes and Amazon, and try and persuade them to host a streaming player from Juno, DJ Download, or perhaps a SoundCloud player, complete with a buy this set link.

Specialist blogs with links to unauthorised content represent a genuine threat to small labels as they are completely focused on very specific niches. They usually carry releases well before their release date, and so can seriously undermine your marketing efforts.

BBC Introducing

>Just received info on this from  AIM. Certainly worth a punt as part of your Radio strategy.
BBC Introducing is a network across BBC Radio, involving local stations, Radio 1, 6 Music, 1 Xtra and the Asian Network.

It aims to identify and support emerging and undiscovered artists with radio play, festival slots and live sessions, to help them take their musical career to the next level.

You can upload up to 3 tracks per artist per month to the BBC Introducing website. These tracks get listened to by the Introducing team, as well as getting sent to your local BBC station.

Many acts have had plays on their local BBC station, on 1 Xtra or 6 Music and on Radio 1 itself. Huw Stephens and Steve Lamacq are big supporters of BBC Introducing, playing artists they have discovered via this route on every show.

BBC Introducing artists who catch the attention of music fans and radio tastemakers can also get slots on the Introducing stages at major festivals including Reading and Leeds, T in The Park and Glastonbury, as well as live sessions at BBC Maida Vale studios.

Random Testimonial

  • ~ Christoph Doepke, Jazz & Milk

    Never enjoyed such great communications with any other distributor before – it seems we have finally found a new home in Kudos Records.[read more]

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