Jon Irwin Guest Posts on WSJ Accelerators Blog

acceleratorsRhapsody’s president was asked to be a guest mentor on Accelerators,  the Wall Street Journal’s blog for entrepreneurs, where he talks about tearing down paywalls to get consumers to love your app enough to pay for it. Instead of annoying customers just enough to make them pay, he advocates for delivering real value every step of the way–and building bridges to premium content.

Read the post here.

Where’s Taylor?

So the new Taylor Swift album, Red, is not available in Rhapsody. The fact that you’re reading this means you’ve already noticed. You’ve asked yourself, “Why can’t I stream this new album from one of my favorite artists on a service I’m paying for?” Here is your answer: Taylor Swift and her management made a decision not to make her new album available to Rhapsody’s million-plus subscribers for several months. It’s that simple. Except it’s not. At all.

Because let’s face it: Taylor Swift is not about alienating her fans. At Rhapsody, we count stuff, and we know we have hundreds of thousands of subscribers who listen to Taylor; we know that many of you are diehard fans who attend concerts, buy T-shirts, all that stuff. Is Taylor mad at you/us? I don’t think so. At all.

But like I said: not simple. Lemme do my best to explain; we’ll start with some basics: Rhapsody pays for every single time one of our members plays a song. The money we pay out goes to the people or companies that own the copyrights to the music: labels and publishers. From there, the money flows down to the dozens and sometimes hundreds of people who make it possible for you to enjoy music: songwriters, producers, engineers, performers, back-up singers, etc., right on down to the guy who sweeps the floors at the recording studio. The way this used to work is an artist would sell a piece of plastic called a “CD”, and regardless of whether you listened to that CD a hundred times (The Beach Boys!) or only once (The Fat Boys?), all those folks would split the cost of that piece of plastic, and that worked out just fine. Lately, instead of paying for plastic (or vinyl), a lot of us started paying for downloads, except of course for the millions of folks who didn’t pay anything at all; those folks really made things complicated.

So enter Rhapsody. We don’t deal in downloads and we’re certainly not free — we deal in 10 bucks a month for unlimited streaming of every song. Which may mean less money for any one specific artist in the short term, but again: We pay rights holders for every stream. This means that if you’re still streaming Red a year or even five years from now, the money’s still flowing down the, er, stream. We think this is a pretty good model: Doesn’t it seem fair that artists get paid each time you play their song, every time you play their song, rather than a single time when you pay a buck for it?

We believe the answer is…Yes! We believe the cumulative impact of all those streams over all those years will outweigh and outlast the impact of a single download. We believe that the model of access over ownership provides a level of convenience and accessibility that facilitates an unprecedented degree of music discovery — encouraging you to experience artists and genres you’d never knew to be so amazing, to engage with music you might never have heard of, let alone actually heard, were it not so effortless to do so. Most of all, we believe that more people listening to more music more frequently is better for everyone. We believe that, we want Taylor and artists like her to believe that, and if there’s anything standing in the way then we want to figure out a way to get past it.

That’s why I wanted to write this note to all of you. I’ve been at Rhapsody for six years, and I know that access over ownership is the future of experiencing music. The joy I’ve felt during all these years of music discovery has honestly enriched my life, and I want everyone to feel that, and the only way that works is if artists aren’t just tolerant of streaming, but vocally in favor of it. So let’s start the conversation and let’s hear everyone’s voices. Let’s post and Tweet and comment and just generally discuss this. And let’s let Taylor know how much it would mean to all of us to have her latest on Rhapsody, and, uh, let’s use this hash tag, because that’s what people do: #wherestaylor

Thanks for reading, thanks for listening,

Garrett Kamps (@gkamps)
Sr. Director, Content Programming
Rhapsody

Artist Compensation: Personal Responsibility, Not a Cultural Trend

The Internet is buzzing from Saturday’s post by an intern at NPR who said she never owned music, much like others in her generation:

I am an avid music-listener, concert-goer, and college radio DJ. My world is music-centric. I’ve only bought 15 CDs in my lifetime. Yet, my entire iTunes library exceeds 11,000 songs.

But when she said she’d pay for “convenience,” the music-savvy folks at Seattle Weekly said, “Quick, Somebody Tell NPR About Rhapsody!

Rhapsody was founded to provide a legal alternative to file-sharing, and it remains central to the company’s ethos and business practices.  We’ve commented that paid streaming services are the only means by which artists can be compensated for every play, and that we work diligently to ensure that revenue flows to all the rights holders. Unfortunately, the preponderance of free legal services as well as of those whose legality is more questionable, have clouded perceptions about streaming and what it means to artists.

It is a complicated issue, but Cracker/Camper VanBeethoven frontman/professor/crusader for artists David Lowery breaks down the emotional, ethical and business arguments in an eloquent post on his blog, The Trichordist, by reminding us that we are all responsible. You can’t just blame the labels, claim that artists are rich anyway (Lowery cites the average musician’s income at $35,000 per year) or jump on the “free culture” bandwagon.

…fairness for musicians is a problem that requires each of us to individually look at our own actions, values and choices and try to anticipate the consequences of our choices.

…Many in your generation are willing to pay a little extra to buy “fair trade” coffee that insures the workers that harvested the coffee were paid fairly.  Many in your generation will pay a little more to buy clothing and shoes from manufacturers that  certify they don’t use  sweatshops.  Many in your generation pressured Apple to examine working conditions at Foxconn in China.  Your generation is largely responsible for the recent cultural changes that has given more equality to same sex couples.  On nearly every count your generation is much more ethical and fair than my generation.   Except for one thing.  Artist rights.

By paying for music, you are showing your support for artists and the industry who depends on them for its vitality. You’re also paying for the convenience of a service that makes it easy to discover, access and play the music you love, on your favorite device, anywhere you are. We take this  very seriously at Rhapsody, which is why we offer a premium service–with original editorial content, music discovery tools and availability on the most devices– to our subscribers, which will keep the revenue coming to artists. We all are responsible for the health of the music industry.  Expect to hear more on this topic, but in the meantime, read David’s post. I’ve even made you a soundtrack.

Rhapsody Listeners Choose Danza Kuduro as Digital Song of the Year for Billboard Latin Music Awards

Billboard’s annual Latin Music Awards are coming up in Miami on April 26th. Billboard awards are determined based on year-end chart performance according to Nielsen data for sales, number of downloads and total airplay, removing the unpredictability of voting on sentiment and artist popularity. We think Rhapsody listening habits provide a great snapshot of what’s resonating with music lovers. We’ve made some predictions solely based on Rhapsody playback for a few key categories at this year’s Billboard Latin Music Awards.

Digital Song of the Year
– Don Omar & Lucenzo “Danza Kuduro” (Orfanato/Machete/Universal Music Latino)
– Pitbull “Bon Bon” (Mr. 305/Famous Artist/Sony Music Latin)
– Shakira Feat. El Cata “Rabiosa” (Sony Music Latin)
– Shakira Featuring Freshleyground “Waka Waka (This Time For Africa)” (Epic/Sony Music Latin)

The lady may be a clear choice for Artist of the Year, but it’s not Shakira’s songs “Rabiosa” or “Waka Waka” that put her there. According to Rhapsody listeners, Digital Song of the Year should go to this year’s sixteen-time nominee Don Omar for his off-the-charts popular “Danza Kuduro” recorded with fellow artist Lucenzo.

Artist of the Year
– Mana (Warner Latina)
– Prince Royce (TopStop)
– Romeo Santos (Sony Music Latin)
– Shakira (Sony Music Latin)

Incredibly popular across the Americas, Shakira is the clear favorite to win artist of the year with twice as many songs played on Rhapsody every day than Mana or Romeo Santos, who are neck-and-neck in second place.

Album of the Year
– Cristian Castro “Viva El Principe” (Universal Music Latino/UMLE)
– Mana “Drama y Luz” (Warner Latina)
– Prince Royce “Prince Royce” (Top Stop/Atlantic/AG)
– Romeo Santos “Formula: Vol. 1” (Sony Music
Latin)

An absolute dead heat for Album of the Year leaves no clear winner designated by Rhapsody listeners. The nominated albums from Cristian Castro, Prince Royce and Romeo Santos’s albums are all stistically equal in number of plays in the weeks leading up to the awards. To note, Prince Royce could be experiencing renewed interested in his nominated debut album resulting from the April 10, 2012 release of his sophomore effort, Phase II.

Song of the Year
– Don Omar & Lucenzo “Danza Kuduro” (Orfanato/Machete/Universal Music Latino)
– Don Omar “Taboo” (Orfanato/Machete/Universal Music Latino)
– Pitbull featuring Ne-Yo, Afrojack & Nayer “Give Me Everything” (Mr. 305/Pologrounds/J/RCA)
– Prince Royce “Corazon Sin Cara” (TopStop)

Though Don Omar has earn two of the four nominations in the Song of the Year category, Pitbull’s collaboration with Ne-Yo, Afrojack and Nayer “Give Me Everything” is by far the most popular song in the bunch streaming three times more often than Danza Kuduro and six times more often than either “Corazon Sin Cara” or “Taboo.”

Crossover Artist of the Year
LMFAO (Party Rock/will.i.am/Cherrytree/Interscope)
Katy Perry (Capitol)
Rihanna (SRP/Def Jam/IDJMG)
Alexandra Stan (Ultra)

Rhapsody users hand the Crossover Artist of the Year to woman with Dominican roots. Rhianna’s song catalog is taken for a spin often almost 100,000 times a day, well more than twice as often as pop queen Katy Perry or the fun lovin’ duo LMFAO.

Redefining the “Hit” Song

Foster the People’s “Pumped up Kicks” climbed its way into heavy rotation on mainstream radio to earn a place on the collective soundtrack for Summer 2011. It’s a catchy pop tune with an easy, head nodding beat and a refrain that makes for a fun sing-along. The single topped out at #2 on the Billboard Alternative Songs chart in July 2011 and went platinum many times over.

“Pumped up Kicks” has been off the Billboard 200 chart for months, but something surprising surfaced five weeks ago with the debut of the Billboard On-Demand chart. Pulled from listening data supplied by top subscription services like Rhapsody, On-Demand is the only chart that measures what music fans are actively listening to right now. And it turns out music fans are still spinning “Pumped up Kicks” often enough to land it in the top 20 alongside new releases from the likes of Adele, Flo Rida and Nicki Minaj.

Streaming services give music fans the ability to listen whatever song tickles their fancy whenever they’d like.  A chart like Billboard On-Demand gives a clear look at what artists and songs are resonating with music consumers. It’s not just an accounting of how many times radio stations have played a song at listeners, how many CDs were shipped or mp3s downloaded. It’s actual requested plays made by fans themselves.

With such a huge percentage of contemporary recorded music now available on-demand, maybe it’s time to redefine what makes a song a “hit.” Maybe it’s no longer just the ability to hang out in the Top 40 for several weeks or even to go platinum. Maybe it’s actually the ability to enter the music zeitgeist, to be that tune that well over a year after release so many people are still hankering to hear.

Jon Irwin on the Red Hot Chili Peppers on Spotify

It was reported Friday that the Red Hot Chili Peppers have made their entire catalog available exclusively on Spotify; however, Rhapsody will continue to carry much of the band’s seminal and most noteworthy material, including Freaky Styley, Mothers Milk, What Hits!? and others.

Overall, this is a positive development for the streaming sector.  The Chili Peppers—who have previously withheld music from all streaming services—are now seeing the benefit of making all their content available on-demand.  While this is an indication that streaming services are becoming required for artists as more music lovers embrace the model, the Chili Peppers would have better served their fans by making their content available to all their fans, on their fans’ service of choice – instead of only on the service that brought the band the biggest check.

Rhapsody has more paying subscribers than any service in the United States, with more than one million music lovers who value music and happily pay to access our 15-million song catalog.  There are many Chili Peppers fans on Rhapsody and the other services who would have been excited to finally be able to listen to the entirety of band’s catalog, and we would have been excited to send out those royalty checks.  It’s a lost opportunity for all,  but especially for fans.

The obvious motivation for such deals is that exclusivity will drive users to Spotify, but is that what we should be really focusing on? There are many reasons people choose a music service.   At Rhapsody, we believe it’s all about creating an experience centered around the paying subscriber: the music they want, on the device they choose, with the ability to discover new artists and old favorites through robust editorial programming and rich recommendations. Moreover, those paying subscribers will generate more revenue for artists over a lifetime of usage than do users of free services.

Each one of us at Rhapsody is passionate about delivering the best music experience, and we would argue that as an industry, it’s what we all should be doing.  At this critical stage, our industry should be focused on creating value for all—the artists, the fans and the labels—not for some. These are still early days for streaming services, and anything that limits the core benefit of an on-demand music service—all the music you want, whenever you want it—will limit the potential for everyone.

We are deeply passionate about the future prospects of music as a service because it provides long term value to the customer and a lifetime of continuous revenue for artists and rights-holders. That’s why we are doggedly determined to work with artists, management and the labels until the day that the Rhapsody catalog is complete. Limiting on-demand access to music in any form—whether it’s an exclusive on a free service or withholding it from streaming services for a limited time—erodes the value of the service for fans and limits a band’s earning potential in the long-run.

We all know that it’s the fans that keep the music alive—in our hearts and as a viable vocation for artists. Business arrangements that leave music fans out in the cold may be attractive for bands in the short-term, but may have long-term negative consequences. Let’s keep the music alive and streaming.

-Jon Irwin, president, Rhapsody International