Friday, January 30, 2004

This is very clever on the part of both KFOG and Apple...

"The exclusive digital EP From KFOG to iPod by The Thrills is available now on Apple's iTunes Music Store, less than 36 hours after the band recorded the tracks at a KFOG-FM Emerging Artist Concert...The entire EP can be downloaded for $4.95 or single tracks are available during a limited four-week period for 99 cents each."

They've combined two strategies that I have long been a proponent of. I'll elaborate on each of them separately in a future article, but let me mention them both briefly here.

First, KFOG has had a long tradition of releasing true recordings - as Ani Di Franco calls them "a record of an event / the event of people playing music in a room" - with their Live from the Archive series. The product is as much memorabilia as music, a "take away" for the experience of listening to special live performances just for KFOG listeners. In this sense the Live From the Archives CD and the new Thrills Live EP muddle the boundaries between CD and merchandise. The purchase is made as a marking of a personal experience which greatly increases the value of the product. This phenomenon is illustrated when people buy CDs and T-shirts after seeing a live band. KFOG, has replicated the experience (perhaps improved upon it) on the far broader medium of terrestrial radio.

Secondly, this release does not face the quandary of cannibalizing CD sales. Effectively, Virgin can fully sell out the demand for digital version of Thrills without worrying about sunk costs in CDs. Based on the success or failure of the digital downloads, they could subsequently release the EP on CD, without worrying that ripped versions of the tracks would circulate on the net. Why? Because anyone who would have paid for a digital copy has likely already bought it. Futhermore, anyone who really wants a CD will still pay for it, especially if there was some sort of trade-in or upgrade path. In essence, the Thrills would have issued a free minimum quality version of the performance in the form of radio, a medium quality product in the digital downloads, and a high quality product in the form of CDs. Releasing the music on those formats, in that order, they gain piece of mind about piracy and a low-cost retail test market (iTunes).

You can read the original text on

Wednesday, January 28, 2004

Lifestyle brand sponsorship of digital music are bubbling over. Three services now have soda pop brand to bootstrap usage in the early stages

* OD2 has Coca-Cola and is already live.

* iTunes and Pepsi will launch at halftime during Superbowl XXXVIII.

* MusicMatch has teamed with Sprite.

We've officially entered the primary season for the new retailers. I contend that whoever is unable to secure a corporate sponsor will fall far behind the others in this competition. The strategy of using someone else's money to make legal music essentially free is what will give digital retailers monetary parity with P2P services and allow them to quickly increase usership.

It remains a question whether corporate sponsorship of music purchases becomes the norm.

Monday, January 26, 2004

Now this is interesting. Lyor Cohen is leaving Island/Def Jam to take the top spot at Warner. Lyor is an interesting blend: truly opportunistic creativity and the ability to play power games as well as anybody. He had to be remarkably savvy and determined in his youth to end up being a the only white kingpin in the black-dominated rap industry. He's not prefect and had a barely publicized, but still major, slip-up in December. And, now he's head of the second largest music company in the world at what may be the transition point between old-school and new. I wonder if he can see that the newest trend has nothing at all to do with what goes in your ears.