The Internet and Record Sales

By Susan Piver Browne

Reprinted with permission from Indie Music World, published by the Association For Independent Music (AFIM).

If the medium is the message, the music industry stands at a powerful crossroads. The way we learn about, sample, purchase and pay artists for music is undergoing a potent change. Total sales of music on the Internet are currently estimated at around $100M to $130M and is expected to grow to $3.93 billion by 2005, according to Market Tracking International, a London-based research company. It is estimated that 15% - 20% will come from direct electronic delivery.

The music industry has always included a heavy dose of trash-all-boundaries rebelliousness. Now, during this time of lamentation over the demise of rock and the popularity of incredibly unexciting music, rebelliousness comes in the form of new delivery systems for music. We have the chance now to revitalize and/or traumatize our industry by this new means of buying and selling music.

Here are just a few of the issues we face:

• Digital delivery of music and copyright protection. How will artists, songwriters and record labels get paid when their music is digitally downloaded?
• Market share drop for brick and mortar record retail as online retailers develop. Will online retailers cannibalize the business for traditional retailers or create new music consumers?
• The role of a record label in developing an artist's career. If an artist can finance his or her own recording, sell and promote it online, how will the record label's role shift?
• Balance-of-power shifting away from record labels and towards consumers. Traditionally, record companies have determined what consumers listen to. Is that control shifting?
• What does this all mean for the independent community? Can the internet equal the playing field for indies, in terms of getting our music heard? If commercial radio and video are largely closed to us, can the internet create a new means of creating impression?

The only thing certain regarding online retailing and digital delivery of music is that the future is entirely uncertain. Many of us (myself included) catch wind of terms such as "MP3", "Liquid Audio", "The Madison Project" etc and feel only partially sure about what these things are. As the future comes to pass, it is helpful to review the key initiatives, terms and players in this evolving landscape.

Digital Download Technologies

MP3

After sex, "MP3" is the most requested keyword on Internet search engines, according to www.yahoo.com. The MP3 (MPEG 1, Audio Layer 3) format compresses data to 1/12 of its original size while largely retaining CD-quality sound. A five-minute CD song takes about 50 megabytes of storage space on a hard drive. In MP3 format, it occupies only 5 megabytes. MP3 files can be played on your computer. Because it is fast and free, it is the download method of choice for most people. It is unencryped and unwatermarked; i.e. it holds no copyright protection. Recently, Platinum Entertainment, a U.S. indie, became the first key label to provide songs for free on MP3.com.

a2b

This is a music platform developed by AT&T. It uses MPEG Advanced Audio Coding compression standard, which, according to AT&T can compress a five minute song into 3.6 megabytes. a2b uses AT&T Proprietary Compression Algorithms, CryptoLib Security Library and PolicyMaker to ensure copyright protection. The a2b online player is expected to be on the market later this year.

Liquid Audio

Liquid Audio and MP3 are competing for domination of the digital download technology and sales. Liquid Audio contains watermarking qualities, enabling it to encode (and protect) copyright information. Hence, Liquid Audio has received support from the Recording Industry Association of America (RIAA). Version 4.0 of the Liquid Music System provides an all-in method for mastering, publishing and delivering copyright-protected, high sound-quality music over the internet. Music in Liquid Audio format can be heard using Netshow, and the Liquid Music Player. BMG, MCA, Interscope, Dreamworks, Capital, Arista, Virgin and others are among the labels supporting Liquid Audio. The Liquid Music Player will not play MP3 files.

RealPlayer

RealPlayer allows you to play audio files on your computer.

Winamp

Winamp is a high-fidelity music player for playing MP3 files on your computer.

Diamond Rio

Diamond Rio is a portable MP3 player. It sells for around $199. On October 9, 1998, the RIAA filed suit against Diamond Multimedia in order to halt the sale and distribution of Diamond Rio. To date, Diamond Rio players are still on the market.

Online Retailers and Wholesalers

CDNOW and N2K (Music Boulevard)

Until November 1998, these two were competing to become the dominant online record retailer. Upon Amazon's entry into the music business, they merged. Combining annual sales of $13.9M (CDNOW) and $10.5M (Music Boulevard), they became the largest online record retailer. This past Christmas, according to N2K, they "sold many more hits than catalog..., which indicates to us that this is product that people would have bought in stores but [instead] bought from us."

Amazon

Upon entry into the online music retail world, www.amazon.com became the dominant player, displacing (until their merger) both CDNOW and N2K (Music Boulevard) with immediate sales of $14.4M in less than 6 months.

Valley

Valley's online client roster includes CDNOW, Music Boulevard, Best Buy, Emusic and others, making them the largest fulfillment house for online music sales.

Recent Events of Note

SDMI

The Secure Digital Music Initiative was launched by the RIAA in connection with the five major labels. Its objectives are to "answer consumer demand for convenient accessibility to quality digital music, enable copyright protection for artists' work, and enable technology and music companies to build successful businesses." SDMI evolved in some part as a response to MP3 technology, deemed by the RIAA as "unlicensed and therefore illegal." [See related news at SDMI]

The Madison Project

On February 8, 1999, IBM announced that it was joining with Sony, EMI, Warner Music, Universal and BMG to test software that allows people to buy music over the internet. The "Madison Project" is an experimental digital distribution platform being developed by IBM and the five majors. It will test more than 2000 albums in about 1000 homes. This initiative is the major label's effort to create a digital sales tool that protects their copyrights and minimizes distribution costs. While no one knows how much music is being pirated over the web, the IFPI sets estimates at $5.3 billion, worldwide. The Madison Project is meant to prevent piracy. After music is selected from among 1000 titles offered, credit card information will be processed and participants can download music and artwork onto their PCs. Only full-length albums and commercially available singles will be offered. Participants will not be able to select specific songs.

GoodNoise & Rykodisc

Founded in 1998, GoodNoise sells downloadable music via the internet, using the MP3 format. Recently, Rykodisc made a controversial licensing deal with GoodNoise, who will now promote and sell selections from Ryko's catalog online. Initially, 175 songs will be made available at 99 cents each. This deal has made Rykodisc the largest record label to adopt the MP3 format.

The impact of these initiatives, technologies and retailers has yet to be assessed. Many in the independent community are hoping that they will give our music a better chance of reaching the ears of consumers. But delivery systems, no matter how sophisticated, can only go so far in creating record sales. As Marc Geiger, founder of ARTIST direct and the Ultimate Band List says, "There's no barrier to entry in digital distribution, but there's lots of barrier to create demand." It's getting noisier and noisier out there...

For more information on AFIM visit afim.com

Did You Know?

WAMA Bar Codes

As a benefit of membership, The Washington Area Music Association provides Uniform Product Codes (UPC). Bar coding enables easier inventory for merchants. Many stores will not carry a CD that doesn't have a bar code. An additional reason to have a bar code is that, once a CD is scanned at the register, the sales are automatically reported to SoundScan. SoundScan reports sales information to its member organizations; which include most major record companies and Billboard Magazine. The Billboard charts are based, in part, on that information.

You must be a current or pending WAMA member to order a bar code. It is required that there be a member statement on the package. A WAMA logo with the word MEMBER next to it qualifies as a member statement.

WAMA charges a onetime processing fee of $30 to issue the bar code for one format (CD, cassette or vinyl). Additional formats for the same product are $10 each. You can now apply for a bar code online at http://www.wamadc.com.

• The Legendary Orioles recently participated with the Friends Against Musical Exploitation of Artists, Inc. (F.A.ME.) in support of a bill to be introduced to the House of Representatives on issues related to trademarks and consumer deception in the entertainment industry. Other artists participating include Mick Fleetwood, Mary Wilson of The Supremes, Tony Orlando, Herb Reed of The Platters, and Carl Gardner of the Coasters. The artists are working with a bipartisan group of house members including Dennis Kucinich (D-OH) and Charlie Norwood (R-GA) to amend the Lanham Act of 1947, which oversees trademark laws.
• The United States Air Force Band announced that clarinetist Mark J. Dubac from Columbia, MD, is the winner of the 1999 Colonel George S. Howard Young Artist Competition. Among four finalists was Joshua Daniel Orchard from Walkersville, MD.
• Greg Berger, drummer of The Huge and Renee Eastman drummer of The Skirts, were wed in April.
• The WHFS Big Break contest selected SEV, from Fairfax, VA to open-up the 10th Annual WHFStvl.
• Orpheus Records has moved to 3173 Wilson Blvd, in Arlington, VA, 703-294-6774, orpheusrecords.com.
• Ruthie and the Wranglers appeared on Crook & Chase in May on TNN (The Nashville Network).
• Hey all you Big Village and Rachel & Jaqui fans, Rachel's song Same Guy was the featured song on MP3.com. Big Village said, "It is a Goddess-send for original bands. It is an honor to be featured as song of the day and we are very excited about it!" Check it out at: www.mp3.com/music.
• The Gadget White Band won the Arrow 94.7 and washingtonpost.com battle of the bands and will be opening for David Lee Roth and Bad Company at The MCI Center. In addition, Arrow 94.7 is playing their song Take Me Down. The Battle was held through three rounds at Lulu's/Blackies in Springfield.
• Women 'N Rock is going on tour. WNR has 17 Shows booked, mostly on the road; Nashville, TN, Virginia Beach, VA, Raleigh, NC, and The Mercury Lounge in New York. In the DC area they have gigs at Metro and Jaxx.
• Dog Fashion Disco, has been selected to perform at the 1999 Atlantis Music Conference, August 11-14 in Atlanta, GA where bands are annually showcased by industry executives and A&R representatives. Dog Fashion plans to perform cuts from its new cd, The Embryo's in Bloom. Fans celebrated Dog Fashion Disco's cd release at Phantasmagoria in Wheaton in April. The show was described by Pitch Magazine's Rick Faga as "Truly a kick-ass set!"
• Acoustic folk/pop duo Lena and Sanford Markley have been invited to perform for a second year in a row at the New Folk Finalists at the prestigious Kerrville Folk Festival in Texas. Selected from over 1,000 entries nationwide, Lena and Sanford will perform Character Lines, the opening cut from their new CD, Shadows on the Light, Across The Sea, a new song inspired by their musical collaboration with Maura O'Connell.
• The 'New Rock' band, Alchemy premieres its Magic Music Myth: A Spirited Rock Opera opening in July for 26 performances at the Thomas Jefferson Theater in Arlington, VA. Tickets for the Alchemy Sounds Theater Company's production are on sale at ProTix 703-218-6500.
• Cantate Chamber Singers', Gisle Becker, Music Director, has announced that composer/conductor/organist Thomas Beveridge is Cantate's 1999-2000 Commission Composer. Mr. Beveridge's piece, Verses from ENDYMION, scored for chamber chorus and strings will be premiered on Cantate's at Bradley Hills Presbyterian Church in Bethesda and Western Presbyterian Church, Foggy Bottom, where Beveridge is Organist/Choirmaster, in November.
• 24/7 RealAudio blues webcasts are now being transmitted at a new URL: http://www.bluestown.com/bestblues. You can go to that page directly, or you can get to it by going to http://www.bestblues.com and clicking on the flashing radio icon in the upper-right hand corner.

  Final Curtain

• Condolences to the family of Ed Fishell, the first elected president of the Potomac River Jazz Club. Mr. Fishell passed away on February 11, 1999.
• Mary Pat Hughes, a very talented,and accomplished woodwind player (primarily a saxophonist), from Baltimore passed away. She had a group called Too Funkin' Heavy.

  Correction:

• Vincent C. Franco's name was misspelled in the last issue. His web page can be found at www.oasiscd.com/vfranco. His cd, Forever Love, can be ordered at ab-cd.com.

McGee Band to Giant

The Pat McGee Band has signed a recording contract with Giant/Warner Brothers. The debut album will be recorded in late summer/early fall and released in early 2000. After a seven-week tour that ended May 1 with another sell-out at Irving Plaza, New York, the band is taking time off from extensive touring to work on material for the new album.

Blue Yard Garden Song in Film

Rockville's Blue Yard Garden song featured in a new motion picture by Everyone is Related Films. Wild Diner, a tasty comedy about the folks you meet in diners at 4:00 am, will tour 59 other cities after finishing its DC run . The first track from Blue Yard Garden's late 1998 CD release No Good Sunday's (Empyrean) is featured in the film. That song Simple, a song about mediocrity and dreams that block our way, will also appear on the motion picture soundtrack which will be available in Mid June. For more info, contact Everyone is Related at 202-462-6552 or jay@blueyardgarden.com.

Ear Plugs 50¢

The Fairfax quartet, emmet swimming, is set to release their fifth full-length CD, Ear Plugs 50¢. The album is being released by Screaming Goddess Records and distributed nationwide by Redeye Distribution. The album, recorded live at the Nightclub 9:30 in Washington, DC and Alley Katz in Richmond, VA, will be released into stores nationwide.

This first Live album from the band was recorded by Mark Williams (Hootie and the Blowfish, Southern Culture on the Skids, Smithereens), and mixed by Paul David Hager (Shawn Mullins, Dixie Chicks, Bare Jr., Tracey Bonham, Letters to Cleo, etc.). The highly-acclaimed team successfully captured the unbridled energy and awe-inspiring emotional urgency of the band's live shows, while maintaining the intricate dynamics of the music.

Earplugs 50¢ highlights a collection of fifteen greatest hits from the band's four albums plus one new song Playing House and two crowd-pleasing cover songs So Lonely by The Police and Levi Stubbs' Tears by Billy Bragg.

According to lead vocalist/guitarist Todd Watts, "We wanted to make this live album for two main reasons: to give people a sense of how our songs are different live than on any of our albums, and because we do play so many shows and we put so much of ourselves into each show, we want people to take home the actual live experience."

SDMI Portable Device Specification

The Secure Digital Music Initiative completed the first step toward creating a new digital music marketplace. The group, comprised of more than 100 companies from the music, consumer electronics and information technology industries, adopted a specification for portable devices for digital music. "Today's announcement brings consumers one step closer to the online music market they want," said RIAA President Hilary Rosen. "The adoption of a system to respect music on portable devices will give artists and music companies the ability to develop and offer music fans new, innovative ways to experience music online and off." The on-time spec is under final technical review and will be ratified at the SDMI plenary meeting on July 7-8. For more information regarding the specification, please visit riaa.com

Exploding Boy, Best Unsigned Band

Exploding Boy left its up state New York home almost 2 years ago to broaden the horizon and seek out new people to play for. Looking for a central location from which to tour the East coast, the original pop/rock trio found the DC metro area fit the bill. These Virginia newcomers stay busy on the road about 200 days a year but do find time to do other things like enter the Musician/Billboard Magazine Best Unsigned Band 1999 contest. More than 1200 entries ranging from country to metal, pop to hip hop were submitted for the contest with Exploding Boy garnering honors as one of 12 finalists picture of Exploding Boy, as well as the other finalists, is featured in the June 26 issue of Billboard. For their efforts, the trio will be included on a finalists compilation to be manufactured by Atlantic Records and distributed to 500 A&R contacts.              - Maria Villafana

Terri Allard

Reckless Abandon Music is pleased to announce that bookings for Terri Allard are being handled by Sean La Roche. La Roche, formerly of Fleming and Tamulevich, recently started his own agency based in Albuquerque, New Mexico and can be reached at (505) 262-2969, email Laroche@swcp.com. Promotions for Reckless Abandon Music and Terri Allard will be handled by Melissa Farina (804) 823-1240, email MelFarina@aol.com. Wholesale Distribution for all Terri Allard CDs, Loose Change and Spare Parts, Rough Lines, and Terri Allard, are now being handled by Redeye Distribution (336) 578-7300.

Arts Advocacy Days

Representatives of National Academy of Recording Arts and Sciences, The DC Commission On the Arts & Humanities participated with thousands of arts advocates from across the country in Arts Advocacy Days in March. During two days of dialogue, advocacy and events on Capitol Hill to increase awareness of the importance of public support for arts programs nationwide. Per NARAS' newsletter account, the message was loud and clear: Americans want federal support of the arts and humanities.

Fionna Duncan Vocal Workshop

Iva Ambush will be attending the Fionna Duncan Vocal Workshop and opening the Edinburgh Jazz Festival along with 24 other participants. There will be participants from all over Europe and Asia and she is the first and only American accepted for this workshop. The workshop is from July 26, until July 31, 1999. For further information, 301-253-1074 or 301-595-5545.

Mid-Atlantic Song Contest

The Songwriters' Association of Washington (SAW) announced winners of its 15^th Annual Mid-Atlantic Song Contest (MASC) in May. Winners were honored at a Gala at the Clarendon Grill on May 16. The $1,000 Grand Prize was awarded to Ryan N. Harrison of LaVerne, CA for his adult contemporary song, (I Just Can't) Feel the Beat. Mary Beth de Pompa from Falls Church, VA won First Overall with here pop song, It's True, I Do. For information about SAW, call: 301-654-8434, or visit www.saw.org.

From The Road...Pete and Maura Kennedy

...morning, we dressed in our finest polyester and set off to renew our wedding vows at the Graceland Chapel on the world-famous Las Vegas strip. The ceremony was performed by Elvis, himself (or else it was a darn good impersonator), who led us through the vows, and sang a few of his biggest hits, Karaoke style. The ceremony ended with The Kennedys and Elvis harmonizing on a lovely version of Viva Las Vegas. See the website for wedding pictures: http://www.KennedysMusic.com.

WTGO Urban Online Radio

TMOTTGoGo has developed an internet radio program called WTGO 99.9 that caters to the Washington DC urban music culture (the 99.9 stands for the percentage of go-go music that is played. WTGO is set up for the purpose of assisting the local groups in receiving more exposure for their material. http://www.tmottgogo.com/wtgo.html

Hootie & the Blowfish Accept Diamond Award

The RIAA's Frank Creighton presented Mark Bryan, Dean Felber, Darius Rucker and Jim ‘Soni' Sonefeld <@150> all members of Hootie and the Blowfish <@150> with a Diamond Award. The group was in town performing a concert at Merriweather Post Pavilion, not far from some of the band members' hometown of Gaithersburg, MD. Their album, Cracked Rear View, certified at 16 million, is the best selling debut album of the 90's by a group. Rusty Harmon, the group's manager was also present.

Proposed Low Power Radio

The FCC proposed licensing of new 1000 watt and 100 watt low power FM (LPFM) radio stations, and also sought comment on establishing a third ‘microradio' class at power levels from 1-10 watts. The result could be an increased diversity on the radio dial, and return of formats long since dropped from the D.C. radio market. A public comment period was in effect until June 30. More information is available by visiting the FCC's web site at www.fcc.gov/mmb/prd/lpfm.

SAW Elections

Songwriters' Association of Washington (SAW) announced election of new Board of Directors member, Michael Sheppard. Sheppard, a local musician, teacher and producer was voted as Board Vice President. Eric Eckl was re-elected as SAW President. Re-elected for one year terms were Ann Gurtler, Secretary, Carl Cox, Treasurer, and Joel Pomerantz as member at-Large. For information about SAW, call: 301-654-8434, or visit www.saw.org.

groovelily opening for Cyndi Lauper

groovelily vocalist/violinist Valerie Vigoda is on the road with Cyndi all summer (as part of the Cher tour), and in addition to the large arenas, Cyndi is doing several headlining shows at smaller venues. Cyndi has invited groovelily to share the stage with her. Valerie will return to the stage for the Cyndi Lauper show, following groovelily.

It was a good month for Mike Schreibman

1999 HYPE Magazine Awards
WAMA President, Mike Schreibman, was honored with a HYPE Award from HYPE Magazine. Schreibman was acknowledged for his drive and excellence in support of the local performing artist. WAMA Board member Patrick Jackson, owner of Mystic Productions, was also a recipient of the award.

Western - Ellington Alumni Honor Roll
The Western High School/Duke Ellington School of the Arts Alumni Association elected Schreibman to the 1998 Alumni Honor Roll of outstanding graduates.