Monday, November 17, 2014

Do they know it's Christmas ?

Hats off to Sir Bob Geldof for trying to help re; the Ebola crisis. Interesting also to note how willing the British public are to support initiatives such as this and children in need whilst they object to the centrally imposed international aid budgets. Unfortunately these look suspiciously like big time vanity projects for the politicians involved. Much like Capt "Red Legs" Tyrell in the classic movie "The Outlaw Josey Wales" they may feel that "Doin right ain't got no end". Fans of the movie will know how that story ends.

Returning from my brief excursion away from the editorial guidelines applying to IPTV Times (apologies Iolo) there is a relevance to this particular song and the digital age.

The first version was recorded in 1984 (pre-internet) and was sold as a single for £3.50. It sold 3.7 million copies in the UK alone - having sold one million in the first week.

The 2014 update is available on Itunes for £0.99.

It does not look to be available on Spotify at the moment and if it was would generate an average royalty per play of @ $0.007.

In the 2014 Digital Age the track would need to be played 80,000 times on Spotify to equal the revenue from the sale of one single in 1984.

Unfortunately a brief surf around the reasonably well lit sections of the web show lots of free copies already being provided by the pirates. Purchasers on Itunes will not be driven by exclusivity but active choice.

However following Sir Bob's appearance on the X Factor he invited £5 contributions via mobile payment and £1 million was donated in 5 minutes. So - good news here.

Does any worthwhile pattern emerge from this selection of data ?

To some extent this validates the Spotify argument that digital has changed everything and that defending old business models is analogous to running a "save the dinosaur campaign" (they are cuddly and you know it) just prior to the Cretaceous-Paleogene extinction event.

Spotify while young in general terms is mature in digital terms and  ranks as the 523 largest website in the world and 154th in the USA (source: Alexa). Lack of traffic / scale does not appear to be the issue. The royalties they pay (however small) may just be what the 2014 market dictates.

Given that the music industry is the canary in the coal mine for the rest of the digital media industry (music is about 5 years ahead as given small music file sizes they work over narrowband) what useful forward guidance can this offer ?

A quick look at this video shows the massive scale of video piracy  as identified by our Sentinel systems across a single major sports channel BeInSport.

Logic suggests that barring any other major change general digital content will come under massive downward pricing pressure from the pirates. The spotify point of view that the industry is locked in a mindset that they are competing with each other when if fact they are competing with the pirates may in the end be valid.

All rights are now non-exclusive by default.