Universal Music currently has the highest numbers of viewers for a particular YouTube channel. That’s great for Universal, but also a bit of a problem. YouTube is essentially a middleman. Universal is leaving a lot of revenue on the table as well as very valuable user data.

The idea behind Vevo will be to create a higher-end video experience. The page will not be laden with flashy advertising, but instead will include just a few ads per page. Universal’s hope is that these ads will sell at higher rates.

YouTube and Universal will split the revenues 50/50. It is unknown at this time whether or not users will be able to embed these videos into blogs or websites, in the way that YouTube users can do now. Vevo will also be a channel within YouTube so as not to lose the users only searching in YouTube.

This is a great idea by Universal to capture more user data and gain more revenue, but the question is if it will work. I go to iTunes because I know that 95% of the songs I am looking for will be there. I don’t go to a music site that only has 1,000 songs available. Same thing with videos. I may want to watch a video by a Universal artist and then one by a EMI artist. I don’t want to first go to Vevo, then go to YouTube. I would rather be in YouTube the whole time.

And what is YouTube’s motivation? They may receive higher advertising money for going after more exclusive advertising money, but they are also promoting people to go from the YouTube site. Maybe YouTube is viewing this as an education experience and something that could be used in many different ways. Almost a franchising out of the YouTube brand.

I’ll continue to follow this. Vevo is expected to launch in full by the end of 2009.

Stay tuned,
Erik
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The latest song can be streamed at newsweek.com of all places. The song is titled “Feel a Change Comin’ On.” A flash section on the homepage of Newsweek links to the page where the song can be streamed. It also opens up a new window for the song so the user can continue browsing the web while listening to the song.

Dylan is also pursuing interaction with his fans. On his site titled ‘Beyond Here Lies Nothin‘,’ fans can submit their own ideas for lyrics alongside the lyrics that Dylan has written. There is then a community gallery where lyrics are posted from fans around the world.

These are great and unique ideas for Dylan. Finding songs on unexpected websites and creating opportunities for interaction will be some of the more successful ways in which artists will create buzz.

Stay tuned,
Erik
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This has a number of implications for musicians and advertisers. For musicians, an impressive presence on Facebook and MySpace just touches the surface. These pages must be continually updated with fresh content to provide a reason for people to peruse your band’s page.

For advertisers, this spells trouble. Traditionally, social networking sites have not attracted impressive click thru rates (the amount of time an ad shown is clicked per # of visitors). People on these sites choose to interact with friends instead of advertisers. So, advertisers will need to find creative ways to work within these sites.

The Nielsen report also highlighted that in 2008, 2/3rds of Internet users visited Social Networking sites and that 10% of overall internet time is dedicated to social networking sites.

I would assume that this trend will only continue to increase as the 30+ age group is now the fastest growing for Facebook, and sites like LinkedIn continue to increase in popularity. When I consider my Facebook and LinkedIn contacts, I don’t have many of their email addresses or phone numbers. Especially for contacts from the past. Facebook and LinkedIn then become the easiest way to contact people.

Stay tuned,
Erik
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The big point is that by offering this choice, you make a better consumer experience. So companies like Amazon and Netflix really took advantage of this idea. A few days ago, Eric Schmidt, CEO of Google, said the following:

“I would like to tell you that the internet has made such a level playing field that the Long Tail is absolutely the place to be, that there’s so much differentiation, so much diversity, so many new voices. I’d love to tell you that that’s in fact how it really works. What really happens is that we follow what’s called a powerlaw. A powerlaw has the property that a small number of things are very highly concentrated and most things have relatively little volume.”

So, there is some rethinking going on for the long tail. The question being asked is if the Long Tail is really a good place to be and a good strategy for a company. Because most sales still occur in the blockbusters. Chris Anderson, original coiner of the theory ‘The Long Tail’ said “It’s hard to make money in the Tail.” However, Schmidt went on to say that “it’s also hard to make money if you don’t have a Tail (to satisfy minority taste, which improves the consumer experience), but the revenues are disproportionately in the Head.”

I think these discussions have poignant relevancy to new music website startups. Some strategies are to have a large number of Indie Artists (tail) and to stay away from the big name artists (head). Other websites have an enormous catalog of popular artists, but shy from the long tail. So what is the correct strategy? It’s probably somewhere close to what Schmidt said above about making money in the head but having the tail for the consumer experience.

I will continue to follow the current discussions on this topic. It is fascinating.

Stay tuned,
Erik
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This is an interesting model and one I will continue to keep an eye on for financial viability. With the downturn in the economy, will this affect advertising rates for the ads played before and after songs? And will consumers accept the free music with ads when they can download free music without ads? I thinks targeted ads make great sense on a site like Hulu.com, where you can watch tv shows or full-length movies. One add every 8 minutes or so (for tv shows) is acceptable. It becomes a little more difficult for ads between 3 and 4 minute songs.

I will continue to watch We7 and report on any updates.

Stay tuned,
Erik
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Take India as an example. India is expected to have 230 million 3G subscribers by the year 2013. 3G or third generation technology allows for the faster transfer of data over wide area cellular telephone networks.

Some ways in which this technology is assisting in developing countries is in the immediate exchange of pricing information. For example, a farmer in a rural part of India does not have to rely on buyers to find the price of his goods. He can now tap into the global information market to see if he is getting a good price or if he is getting ripped off.

This is also important for musicians. Is your web presence built upon the idea that most people will be viewing your site on huge desktop screens or on small mobile devices? Is your website set up to show well on a mobile device? Can people easily access your music through the mobile device? And what tools can be used to promote your music and band on mobile devices?

Stay tuned,
Erik
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The smartest thing about Nokia’s approach is that their sites are specific to the country. They are not one size fits all. Even down to the level of search, this site for Spain narrows genre’s down to a level with which the Spanish consumer would be comfortable.

The prices at a US$ equivalent of $2.17 per track and $14.45 per album. There is also a monthly subscription service available at the same price of $14.45.

This is a smart move by Nokia to get in relatively early as a site specific to particular countries. The tie-in with the mobile device is also a huge benefit.

Stay tuned,
Erik
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The really nice thing for artists is that there are no set-up fees. And artists get to retain the rights to their music. That is a huge deal to an artist, especially an up and coming artist. In the past, most artists would sign away their rights to a song for a nice chunk of up-front change. They would go buy Bentley’s and cribs, but be broke a few years later when the record labels were banking on their success.

Another important feature here is Amazon’s clout. Right now if I go to Amazon.com’s MP3 page, they offer me a number of suggestions based upon artists I have searched for in the past. Just imagine Amazon’s influence in this arena if they suggest your music to consumers who liked similar artists. The music discovery aspect of this is great, and it could lead to a nice, and immediate profit.

As I have written in the past, artists need to careful to pick and choose the websites they join carefully. Too much exposure could be a killer, and not enough won’t get you very far. The CreateSpace site seems like a safe bet.

Stay tuned,
Erik
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Take India as just one example. In India alone, the mobile subscriber base has now reached 296 million users. That is almost the population of the entire USA. That number was just 192 million one year ago! India added 100 million mobile subscribers in the last year!

And let’s add Brazil to India. For a population of 192 million people, more than 120 million people (63%) have mobile devices and the 3G network is one of the most advanced for all of Latin America.

To put this in perspective, and to offer another mobile device example, Apple’s ipod has sold 160 million units since inception. I realize that people aren’t viewing the internet on their ipods, but they are becoming used to devices of that size that have tremendous user capabilities.

Most mobile subscribers internationally will browse the internet for the first time on a small screen instead of a laptop or desktop. Is your website prepared for this? As a musician, are you aware that really beautiful flash websites don’t even show up on the iPhone? Are you aware that your music player on MySpace does not function on the iPhone? How are you going to reach your fan base on their mobile devices?

Stay tuned,
Erik
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This has big implications for bands developing their web strategy. More and more people will be viewing your webpages and hearing your music on mobile devices. If you rely solely on a flash website, well, the millions of people who use an iPhone will not be able to view your site. MySpace’s music player requires flash. Yes, the technology is likely to get better, but as a band, the strategy must include people who will begin to use their mobile devices much more.

Collabo Update
Wrigley’s, the maker of the famous chewing gum, is collaborating with Ne-Yo, Chris Brown, and Julianne Hough to have them remix famous jingles for their advertisements. There will be a concert on July 29th in New York City to unveil the new jingles.

Stay tuned,
Erik
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