Music Discovery Start-ups

There was a good post by Rafat Ali at paidcontent.org today.

The basic gist of the post is that music start ups such as iLike (just acquired by MySpace), Last.fm, Pandora, Slacker, Spotify and others are all challenged by two things (from the post):

1. “margins in music downloads are horrible for anyone without iTunes scale (and even that’s not growing rapidly), and that music labels are the choke point for most of the startups in the download space.”

and 2. for ad-supported music start-ups, “…we all instinctively know: too little ad money sloshing around for too many startups and the economics of ad rev share don’t work out well. Plus, there are too many interested parties trying to leech off money at every stage of the value chain for this to ever scale.”

I believe the conclusion from these observations is pretty simple: you can’t really make a good living as a music-oriented start-up by participating in the existing value/supply chain. A start-up must disrupt, disintermediate, or do better in some specific, repeatable, scalable capacity.

Music promotion and The Thin Lizzy Paradox

In previous posts, I have written about audience disengagement and fragmentation across many different platforms and networks for all types of content.

Recently, I got into a discussion with a few smart folks about what “music promotion” should / could mean in today’s highly-fragmented, distribution-rich, socially-connected world.  Interestingly, there have been similar (heated!) discussions happening at places like HypeMachine (a service I like quite a bit).

This is the basic line of reasoning:

  1. Today’s music “industry” is, increasingly, a vast sea of “noise” (new music from new bands, massive old libraries from the past 50 years, mash-ups, remixes, 497 different places to listen, etc.)…driven in part by production and distribution costs very rapidly approaching zero. This trend will not reverse itself. ever.  …and this is in stark contrast to the relative scarcity of just 10-years ago.
  2. Promotion has ALWAYS been a part of the music business:  the spectrum ranges from the most basic (band members posting fliers on walls) to the most organized and potentially illegal (payola, label-funded indies).  It’s interesting how recent discussions of “promotion” have consistent references to the concept of “manipulation” of the consumer…however, I believe such references are misguided as it is simply a matter of degrees.
  3. The question is how do you pop some, one specific “signal” (one, particular band) out the noise and enable potential fans to discover that music?  The Long Tail concept – whether you love it, hate it or are bored with it – is correct in suggesting the statistical likelihood of more POTENTIAL fans than ACTUAL fans for any band (or other content) at any given moment.  The problem, in short, is how to deterministically enable DISCOVERY of specific music for would-be fans.

so…what is “The Thin Lizzy Paradox?”  some quick background:  Thin Lizzy represents an interesting example relative to this discussion because:

  1. They have a substantial body of work (their discography includes 12 studio albums and 6+ live albums + compilations)
  2. Phil Lynott is, unfortunately, dead.  Original members won’t be recording new albums or touring anytime soon.
  3. 999 out of 1000 people under 35 years of age do not know “Thin Lizzy” in any capacity:  that they are a band; their songs;  etc.
Generic Long Tail Chart

Generic Long Tail Chart

In short, unless something changes, Thin Lizzy (and many many other bands) will slide hopelessly to the right of the Long Tail over time.  Awareness of the band and the amount of money their catalog (and to a lesser extent, related materials such as merchandise) generates will asymptotically approach zero.

And thus, the paradox:  Either there is an authentic, deterministic way to successfully promote such music today or MUSIC, in general, IS DISPOSABLE.  To re-state:  Either there is a way to find and convert potential fans into real fans or music’s value and fan-base slides hopelessly towards zero over time.

Given today’s direct-access, socially-connected world of Facebook, MySpace, Twitter and similar, I believe that finding new fans is possible…but it’s just not deterministic yet.  It’s happenstance.  Music Businesses can not operate properly based on happenstance.  In point #2 above, I italicized the word “business” for a reason:  I care about what it takes to have sufficient quality-of-audience find the music (NOTE:  not the other way around!) to sustain a band / a label / an artist / “rights holder” with cold, hard cash.

Today, there are the beginnings of discovery tools; however, there is no way for a business with specific interest to suggest, for example, that anyone listening to Prince’s Raspberry Beret should absolutely check out Thin Lizzy’s Sarah … because, I’m telling you, it’s a rip off.  Closed systems such as Apple’s Genius feature or Pandora are not a solution because they, at least currently, serve only their single master…however, they are on the right track in terms of their ability to facilitate discovery.

I don’t believe music is disposable; I have a few ideas on how The Thin Lizzy paradox ends happily for bands that have sufficient density or achieved “critial mass” …but that’s another post.