Yesterday TMV attended the annual AIM Music Connected event in London. The event was full to the brim for the whole day and there was good networking for all who used the opportunity to do so. TMV managed to get some juicy quotes from the keynote and panel sessions of the day, all of which are outlined below.

First keynote for the day was from Paul Brindley at Music Ally. The focus of his speech was on the good, the bad the ugly in terms of digital music business models. Paul grouped all the models into four key areas some with obviously overlap; al-la-carte, Bundling, ad-funded and subscription. An interesting outline on subscription models, it was stated that the emusic subscription store has seen an average of 60% of all downloads being full albums with emusic subscriber figures being around the 400 thousand mark as of January 2009.

Interestingly, Korean subscription model Melon, boasts that 94% of its 11m subscriber base access the service via their PC and not their mobile. For such an advanced mobile market, this is a rather dynamic figure. Ad-funded music was touched on but TMV will drill down on this later when the focus is on the ad-funded music panel.

The biggest ugly in TMV’s eyes was the fact that apparently the Nokia Comes with Music service in the UK has only attracted 23,000 subscribers since its launch in the October 2008. It should be noted that Nokia did also counter that they learn very quickly and any mistakes made in the UK campaign have not been replicated in the four other launch territories where results have been a lot better.

The TDC Play service in Denmark has had 42 million downloads from its service of which 85% were full album downloads. Why is this significant? Well it outlines that digital if done right do not have to cannibalise album sales.

New edition to the TMV staff, Sam McGregor took notes on the speak from David Riley the digital marketing manager at Cooking Vinyl and his overview of the Prodigy album launch campaign. Essentially he provided an overview of how a well-formed and executed plan can be successful. An essential element of the campaign was the use of bundles including concert tickets and album pre-orders. Perhaps in TMV’s mind the key ingredient was the consistent engagement with fans, using street teams, mailing-lists, teasing fans with information. Overall in David’s view it was PUTTING THE FANBASE FIRST.

Another interesting dynamic of the campaign in TMV’s eyes was the use of Bluetooth promotions in collaboration with 02 at live events and the viral spread of this marketing technique.

Dave Haynes from Soundcloud provided a good overview of “utilising the latest trends and technology with a focus on twitter. According to Sam who took notes on this keynote, Dave provided a “30-minute presentation that took an absolute beginner in Twitter to being able to utilise the website to full advantage as a label or artist manager”. In TMV’s view the insight into using “bit.ly” to trace click through’s on your tweets was the most interesting, so essentially Twitter analytics. All the obvious essentials included ensuring that you have rich and engaging content to successfully utilise Twitter to deliver results for your artist campaigns.

First panel of the day “Making Money From Digital” certainly shed some light on what labels are actually making money from and their reluctance to work with new services where there is a very real and serious threat of not receiving payment for the use of labels’ content. Ted Cohen from TAG Strategic made a very salient point that he believes consumption habits are changing towards “access” and moving away from “ownership”. Albeit Peter Prichard from Media Records totally disagrees stating that iTunes a la carte model delivers his label more than 80% of its total digital sales.

What TMV found very interesting with these indie labels on the panel was that they stated that around 40-50% of total sales were via the digital channel. It was also made clear that if managed correctly campaigns could be run to encourage full album sales via iTunes. TMV questioned the labels on what percentage mobile content sales made up in terms of the previous 40–50% and they basically stated: bugger all. Charles Caldas CEO of Merlin did note that they had been making progress and had secured deals with a number of key digital services and that we should watch this space for more deal announcements in the near future

The best quote of the day was from Peter Prichard who went on to state that he “does not believe the sales reports he gets from mobile services”. TMV does believe this issue of transparency in sales reporting from mobile music services does require further deep analysis and expect to see a TMV post on this in the coming weeks.

The next panel focused on potential new revenue streams labels and artists should be looking at. The figure to note here was that Sony Computer Entertainment paid out over £30 million in royalties to artists from its “Singstar” game. Within the Singstar game, there are over 3,000 downloadable tracks… talk about new and innovative fan engagement.

Interestingly, according to Gary Clay from Xbox 360, its Rockstar and Guitar Hero games have seen over 3.5 million track downloads a month from the Xbox ecosystem…reinforcing this is that the Motley Crew single sold more tracks via Xbox than on iTunes.

Fan-funded model Slicethepie has evolved and now allows artists or labels to pay a small fee and have their songs analysed by its database of reviewers – which in TMV’s view provides a very valuable service. On the panel, Tim Grimditch from Nokia Music reinforced the fact that despite a rough start in the UK, Nokia takes a very long-term view and will be pushing onwards and upwards with their Comes With Music Service.

Final panel of the day was focused on one of TMV’s often posted about ad-funded business models. According to Simon Wheeler Digital Director at the Beggars Group of labels, money from ad-funded models make up less than 1% of all music sales revenue from there whole catalogue of artists. If that is the case then it is TMV’s view that ad-funded models really need to be selling their propositions to brands and advertisers a lot better.

Simon also noted that an unnamed label receives around 14,000 pending requests a week from YouTube which in their agreement means the label have to approve all the notices of their content being used. Obviously this is not viable to do and TMV really believe that YouTube should be undertaking this via automated filtering processes and stop wasting label resources when payback from their lame CPM rates is so low.

There was also some debate regarding the PRS per stream rate of 0.22p with We7.com fonder CEO Steve Purdham stating that it was too high. According to Martin Talbot, Managing Director of the Official Charts Company, 150 million digital music purchases are predicted for 2009 in the UK – this would signify a 70% increase over the last two years. Now TMV views this as extremely encouraging.
Perhaps the most valuable comment was that more cooperation is required between ad agencies and music content rights owners.

Talk about updating yourself in a day!

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