My mind is still on the Music biz these days. Probably because I am feeling depressed about not being at MIDEM in Cannes this year, since it was so great to be there last year. There is so much dynamic vitality in the music world from so many points-of-view. There is an abundance of new digital music services and devices and easy access to music of all kinds. Music as a social network means and medium is enjoying exponential growth, i.e. imeem, MyStrands etc. All this makes the massively depressing ’07 music sales stats even more ironic. The numbers cited and the ’08 projections are even more dismal than most pessimists predicted.
The Economist 10 Jan Articles “From Major To Minor” concludes: “Universal and its fellow majors may never earn anything like as much from partnership with device-makers as they did from physical formats. Some among their number, indeed, may not survive.”
The article posits a trifecta of woe for CD sales:
1. Reduced retail floor space due to reduced sales resulting in further reductions
2. Decreasing Label budgets for releasing new records resulting in further diminution of the biz
3. A reduction in capitalization and investment due to poor returns.
This vicious cycle is likely to make 2008 feel like dropping off a cliff to the recorded music industry and bolster competitive efforts by companies such as Live Nation and artists that are going direct.
The article reports the Nielsen SoundScan number of US CD sales dropping 19%. Both The Economist and Digital Music News report that the 2007 sales were just as bleak worldwide:
• Spain: -22%
• Canada: -21%
• France: -17%
• Australia: -14%
• Italy: -12%
NAPSTER REDUX
In an inevitable move, one of the majors, WMG, has gone after the new Napster (by which I mean the old Napster that started the MP3 download craze and was successfully shut down in July 2001), SeeqPod.
Seeqpod is in some ways easier, better, and even more pernicious to the established music industry than Napster. It allows you to search for any music or video by artist or title, play it instantly, store it onto a playlist and share the playlists.
In its 57 page complaint to the California Central District Court, The Warner Music Group (Warner Brothers, Atlantic, Elecktra and Rhino) does not mince any words. They are going after the Seeqpod Inc. and their “Angel” investors for both direct and contributory infringement for the max $150,000 per instance of which there are 100s of thousands. They plainly articulate how Seeqpod is egregiously enriching itself by growing its user base at the direct expense of the copyright holders.
SeeqPod has attempted to play dumb by claiming that it is only a search engine like Google, albeit specialized for the deep vertical media niches. True, Seeqpod does not store nor serve, nor even maintain an (Old) Napster-like directory. It merely points to extant mp3 files and provides a convenient means to store your searches and play them.
This will be an interesting case since it may also have implications for the Googles of the world who, it could be argued, also enrich themselves by searching for copyrighted work.
The labels measure how much a music service impacts them by how much of a replacement that service is for an unfettered, unrestricted CD. Indeed with SeeqPod’s iPhone app and ubiquitous edge network access it is not far off.
Sunday, March 30, 2008
Wednesday, March 26, 2008
Thinking Globally: Toms Shoes
Ever since reading Thomas Friedman’s THE WORLD IS FLAT, I have been more aware of “globalization”. Ever since I took a course in college from Buckminster Fuller I have been aware of the distribution of wealth, poverty and resources and that the “Spaceship Earth” would reach its limits. Somewhere studying bioscience I learnt to “think globally and act locally” as recommended by the great microbiologist Renee Dubos. Today I got a glimpse of a working example of all of the above.
When you walk into the HQ of TOMS SHOES (www.tomsshoes.com) you see a chaotic warehouse with a lobby decorated floor to ceiling with photographs of smiling kids, and drawings of shoes made by kids. The conference room has the detritus of ideation on its flip boards as well a few pairs of colorful, casual, canvas shoes scattered around the table. The new line is being designed I am told by Candice Wolfswinkle, the newly hired executive in charge of the FRIENDS OF TOMS Foundation, who was kind enough to spontaneously show me around.
Referring to a warehouse half full of TOMS Shoes, in a wide variety of styles, she explains how fulfillment moved from a small apartment to this warehouse and is now being moved offsite to a fulfillment center to keep up with the demand. The warehouse is now being used for office space. Desks are lined up in two ragged rows separated by makeshift curtains hung form the high ceiling. No one seems to mind the décor. A cadre of interns and employees seem to be happily at work designing, manufacturing and selling casual shoes so that they can give them away to children that need them.
Since Blake Mycoskie founded TOMS SHOES in February 2006, he has stuck to one basic principle, sell a pair of shoes and give a pair to a child who needs one, in person. So simple it works. Inspired by an inexpensive, casual shoe style he saw being worn while on vacation in Argentina, in juxtaposition with an overwhelming number of impoverished shoeless children, Blake had the idea and started his company to provide shoes for tomorrow for kids. Tens of thousands of pairs later, Blake and TOMS shoes have been featured in PEOPLE, TIME, Vogue and Oprah Magazine. With no qualifications from the fashion business, Mr. Mycoskie is fast approaching shoe mogul status as the department store orders have spiked demand.
“We tried to get them made in Argentina.” Says Candice, however the factories just weren’t up to our labor and quality standards.” So you guessed it, the shoes are manufactured in China, so that they can be sold in the USA so that thousands of pairs can be shipped and fitted to children in impoverished areas in South America, South Africa and even back in the USA. Turns out a pair shoes can make a great deal of difference. You might need them to attend school and to prevent crippling infections.
I am greatly impressed by the evident sense of purpose that permeates the Santa Monica based HQ and former warehouse, by the difference this simple plan is making in tens of thousands of lives, and by the shear globalizing randomness of the idea. I am inspired to give something back myself should I be fortunate enough to come up with an idea as good as this.
When you walk into the HQ of TOMS SHOES (www.tomsshoes.com) you see a chaotic warehouse with a lobby decorated floor to ceiling with photographs of smiling kids, and drawings of shoes made by kids. The conference room has the detritus of ideation on its flip boards as well a few pairs of colorful, casual, canvas shoes scattered around the table. The new line is being designed I am told by Candice Wolfswinkle, the newly hired executive in charge of the FRIENDS OF TOMS Foundation, who was kind enough to spontaneously show me around.
Referring to a warehouse half full of TOMS Shoes, in a wide variety of styles, she explains how fulfillment moved from a small apartment to this warehouse and is now being moved offsite to a fulfillment center to keep up with the demand. The warehouse is now being used for office space. Desks are lined up in two ragged rows separated by makeshift curtains hung form the high ceiling. No one seems to mind the décor. A cadre of interns and employees seem to be happily at work designing, manufacturing and selling casual shoes so that they can give them away to children that need them.
Since Blake Mycoskie founded TOMS SHOES in February 2006, he has stuck to one basic principle, sell a pair of shoes and give a pair to a child who needs one, in person. So simple it works. Inspired by an inexpensive, casual shoe style he saw being worn while on vacation in Argentina, in juxtaposition with an overwhelming number of impoverished shoeless children, Blake had the idea and started his company to provide shoes for tomorrow for kids. Tens of thousands of pairs later, Blake and TOMS shoes have been featured in PEOPLE, TIME, Vogue and Oprah Magazine. With no qualifications from the fashion business, Mr. Mycoskie is fast approaching shoe mogul status as the department store orders have spiked demand.
“We tried to get them made in Argentina.” Says Candice, however the factories just weren’t up to our labor and quality standards.” So you guessed it, the shoes are manufactured in China, so that they can be sold in the USA so that thousands of pairs can be shipped and fitted to children in impoverished areas in South America, South Africa and even back in the USA. Turns out a pair shoes can make a great deal of difference. You might need them to attend school and to prevent crippling infections.
I am greatly impressed by the evident sense of purpose that permeates the Santa Monica based HQ and former warehouse, by the difference this simple plan is making in tens of thousands of lives, and by the shear globalizing randomness of the idea. I am inspired to give something back myself should I be fortunate enough to come up with an idea as good as this.
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