We7 - from Butterfly to Caterpillar Tuesday, October 14, 2008

Image representing we7 as depicted in CrunchBaseImage via CrunchBaseI haven't logged in We7, the music site for over 9 months but was prompted to today when I received an email from the service advising that they were dramatically changing their model.

Their initial offering worked as follows
The economics were simple - advertisers got to directly place their message at a targeted audience, assured that their ads couldn't be avoided; artists got paid; customers got free music with the minor inconvenience of hearing ads for a short time.

Evidently their dealings with the large record labels has forced a re-working of the service with the consequence that the site emphasis is now on free streaming of specific tracks you choose, with adverts appended.
Only a small proportion of tracks appear to be available for download and this seems to excludes recent releases from major artists.

This is a dramatic reversal of approach, which I think is a retrograde move, and whilst always being online to access streamed content is increasingly possible thanks to a combination of broadband and "all you can eat" mobile data plans, there remains a large proportion of the population who
Where I do see that We7 has the edge over services like Finetune, Pandora and Last.fm, which are similar streaming services, is that you actually get to select the songs that you want to listen to in full, rather than samples or "stations". Whilst We7 lacks the "discovery" element that something like Pandora offers, the ability to listen to any track for free online means that exploring new tracks and artists isn't impeded in anyway. Of course, if you live outside of the US, you are presently barred from directly listening to Pandora thanks to licensing restrictions.

If you spend much time online or have unlimited broadband access at home and enjoy listening to music, I think that We7 is definitely worth adding to your bookmarks. Meantime, I hope they will be able to find a way for their original model to re-emerge.
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The Light Bulb - the comeback tour Friday, March 14, 2008

Seth Godin has posted an excerpt from Dan Kennedy's new book and Dan's thoughts on record label executives looking at changing a light bulb.

First of all, before we change anything, is the light bulb really burned out? Maybe we just need to breathe some life into it; repackage it, maybe the light bulb could do a duet with somebody (Sheryl Crow? Tim McGraw?) in hopes of getting some crossover appeal, maybe it could be in a beer commercial, maybe we could get it out on the road with a brighter light bulb. The other thing to think about is that this summer, Honda is rolling out a 100 Million dollar campaign for a new car aimed at thirty-somethings who consider themselves adventurous/spontaneous but can't really afford something like a luxury S.U.V. and it might be a perfect campaign to tie this light bulb into, at least it would be the perfect demographic, in terms of age.

Also, and this is just an idea: what if we found out what video games are being released in the third quarter and maybe pitched the idea of having our light bulb make an appearance in the video game at some certain level of completion; like, you get to a dark cave, let's say, if it's an adventure game, and if you have enough points you can get the light bulb - and it would be our light bulb, obviously - and then it's easier to see in the cave. The other thing is this: worst-case scenario the light bulb is, in fact, burned out. Is that really the end of the world? I mean, maybe that's actually of more value to us in the long run: Picture this for voice over: "The light bulb is dead. . . but the legend lives on. . . re-released, re-mastered, revealed. . . the light bulb. . . IN STORES NOW." It almost makes more sense than taking the time changing it, plus, if it's dead we can sell it without dealing with it, you know what I mean? No demands from it, no hotels, no road expense, no delays in the project from its end, etc. But, like I said, I'm just thinking off the top of my head here, just brainstorming, and none of this is written in stone. But the first thing we should do is figure out how we want to handle this, because the light bulb's manager is a total nightmare and we're going to have to take a meeting and listen to him sooner or later, and we should know what our plan is before we sit down with him. And let me tell you right now that the first thing out of his mouth is going to be, "This light bulb should be the brightest light bulb in the world, and it could be the brightest light bulb in the world, but you need to support the light bulb, you need to give the light bulb TV ads, you need to be more active in giving the light bulb tour support, we need to have some promotion from your end!" and on and on. And in that meeting, if you're in it, the only answer from our side should be that we're obviously very excited to be working with the light bulb, that we don't think it needs to be changed, that the only problem is people haven't seen how bright the light bulb could be, and our plan is to do everything we can to make this light bulb happen.

I'll send out an email to everyone before the meeting to remind people of our position on this, but the bottom line is we don't have the budgets right now, and basically we need to see something happening with the light bulb before we go throwing good money after bad, but obviously we can't have the light bulb's manager hearing that. I can tell you all that I'm personally very excited to be working with the light bulb, I think it will light up very brightly, and we're not going to stop working the light bulb, in whatever ways budgets will permit, until it does, in fact, light up very brightly. . . the light bulb is a very big priority for us from the top of the company to the bottom. Period. We can talk more about this when I am back from Barbados next week, and I'm going to need everybody's help on this. I know we can do it, but we need everybody working hard.

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Gimado - Seeqpod has company Sunday, February 03, 2008

Kasian over at Seeqpod has a mantra of "playable search is the future". Well, Gimado evidently agrees with him.

The site invites you to search for an artist and presents you with a list of tracks found that you can either listen to on the site or download. The site doesn't host or distribute tracks, it is a search engine, but it's not hard to see why the record labels whince when piracy is made this easy by a site. Moreover, I suspect that the sites that are hosting the content are unwittingly assisting the piracy rather than deliberately participating.

Whilst it is not as slick as Seeqpod [no saved playlists, video or discover features] it is astonishingly fast and has no user sign-up requirement. Use with care.

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Novatunes - a galaxy of music stars Thursday, January 31, 2008

I like to try out lots of internet services and sites, especially music ones, and often sign up to beta invite lists of services on the basis of patchy information. Months later an invite can pop into my inbox and I've no recollection of who or what on earth the service is, so discover it all over again.

One such service invite arrived today for Novatunes. The email included a long blurb which I couldn't be bothered to read and so dived onto the site. What I found was a music site that showcases a "select" group of artist for whom Novatunes operates as a promotion and distribution platform. At present, 48 artists are signed up and each has their own profile pages on which they can provide news, bio, photos, tour news and operate a fan site, as well as enabling you to listen to their album via a player on the site. Most significantly they can sell their DRM-free music directly to the consumer, retaining 70% of the proceeds, by-passing the record industry machine.

Clearly this model isn't unique and other sites do something similar. But what does differentiate the site from many is that Novatunes is a) going for a restricted set of artists to showcase for now b) those artists evidently have to make a larger commitment to the site than might be the case with simply setting up a profile pages as they might on say Bebo or MySpace. I say this because several random artist I looked at featured an intro video interview with the artist in which they specifically explained the rationale behind their Novatunes site.

The biggest kick for me though was that one of the artists I stumbled upon was Julia Fordham, who is one of my favourite artists - her track "Love moves in mysterious ways" was the track my wife and I selected at our wedding for the "first dance" because we loved her albums. Complete serendipity to find her showcased on the site and I'm listening to her new album on the site as I write this post.

Glancing at the artist directory, I confess that I don't recognise many of the artist names and nor does it look like chart topping stuff. But these are evidently talented musicians showcasing on a new but well-put together site. Worth a browse round even if you are only window shopping - you should check out Meiko and Julia Fordham as a minimum.

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If you can't beat em, buy em Tuesday, January 29, 2008

In a huge corporate u-turn, some have described as hypocritical, Ticketmaster in the UK have bought secondary ticket exchange Getmein. This follows a purchase of a similar business in the USA this month by Ticketmaster USA.

Ticketmaster had made strong representations to the UK Government Select Committee in the Summer arguing it should legislate against such ventures. That Committee declined to make such recommendations in its recent report.

So, following the flop of its Ticket Exchange venture that ensured people could only sell tickets at a loss, they've evidently had a sudden change of heart.

This raises an interesting scenario. Thanks to exclusive deals with many venues and promoters, Ticketmaster control some of the ticket supply to popular events. So what precludes them from releasing such supply directly into the secondary market and profiteering on their own account? Whilst they may be separate legal entities etc it would be staggering for them not to cross sell, especially with 4 million registered customers known to want tickets.

Perhaps this is part of the start of an awakening to economic realities and market models by Ticketmaster.

It will certainly be interesting to see if they sign up to the Music Manager Forum backed initiative that seeks to impose a levy of 15% of revenues on secondary market operators.

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Warner believes you can search but you can't hide Friday, January 25, 2008

I was saddened to read on Techdirt today that Warner Music is suing Seeqpod, an increasingly popular search engine for music. Seeqpod don't host any music but do make it remarkably easy to consume music hosted legally or otherwise elsewhere.

In many respects, were Warner to be successful they would clearly have a case against all search engines, unless the case rested on the playing facilities provided by Seeqpod. USA Search engines have been able to rely upon safe harbour provisions to protect them in the past. However, as with any threatened legal action, the anticipated legal costs can force most small firms to capitulate.

Last year, I had the opportunity to briefly get to know some of the Seeqpod team including one of the founders, Kasian Franks. An impressive group of folks, it will be a great shame for them to be bullied out of existence.

UPDATE : Was just skyping with Kasian, who suggested that the Computer & Communications Industry Association (CCIA), whose members include many of the big names in the computer industry including Google, Microsoft and Yahoo with their big search operations, may support Seeqpod with its defence. He confirmed to me that Warner's focus is more specific than search - it's that Seeqpod offer playable search i.e. Seeqpod made it easy to consume the found items. I think that is the real issue. Why bother going to last.fm even with its new offering when you can go to Seeqpod and listen on an unfettered basis.

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If it's broken, you'd better fix it - EMI Monday, January 14, 2008

Today's FT carried an interview with Guy Hands of Terra Firma on the subject of EMI.

Amongst several stats trotted out, one section stood out for me:

Mr Hands also hinted at a clear-out of EMI Music’s roster of 14,000 artists, saying just 200 of them made most of its revenues.

About 85 per cent of artists lose money for their labels, he said, and EMI spends £70m a year subsidising the 15 per cent who never produce an album. The group has exceeded marketing budgets by about £60m a year, he added, and wastes £25m a year scrapping unsold CDs.

Leaving aside artist productivity and profitability, most businesses try to convert their "waste" into some scrap value, be it returned newsprint or whatever. That they have to destroy CDs is bizarre - why not get someone to come and take them away for instance.

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Proposed levy on secondary market in tickets Wednesday, December 05, 2007

Yesterday the Music Managers Forum ("MMF") unveiled the Resale Rights Society ("RRS"), which has been established to "license" the secondary market for live music tickets in the United Kingdom. Artist management firms representing more than 400 performers have confirmed their support for RRS, including the teams behind Robbie Williams, Arctic Monkeys and Radiohead.

RRS chairman-elect Marot explained that the body's aims are two-fold. The first is to introduce uniformity in the sector through a kite-mark system for ticket sales Web sites. Secondly, the society pledges to fight on behalf of artists and the live sector by negotiating a share in the proceeds of those resold tickets.

It is believed that a levy of 15% on the resale value is being proposed by the Society although details are sketchy. The target is the £250m turnover on the secondary market exchanges.

Unsurprisingly the online exchanges are unimpressed. Joe Cohen, CEO and founder of Seatwave, commented, "This is a direct attempt by a few music managers and promoters to line their pockets at the expense of consumers." He added, "Everyone in this value chain has already been fully paid for their work - this proposed tax is like BMW asking car owners for a cut every time someone resells a car. It's laughable that rock managers and promoters are holding themselves out as consumer champions."

Personally, I think the online exchanges hold the upper hand in the upcoming "discussions". Other than for PR reasons of being seen to co-operate with artists, they have no reason to voluntarily pay away a percentage of the turnover, since the market exists anyway. If reports are accurate, the suggested percentage would take a big chunk out of the 25% tariff the online exchanges typically enjoy.

Other than the kite mark, what else do secondary market operators get out of it?

Well, perhaps one arrangement to motive the exchanges could conceivably involve managers guaranteeing a supply of tickets to major events to provide liquidity to the online markets, with primary market tickets being diverted directly into the secondary market, allowing the price to be set based on demand and "windfall" profits retained by the event promoter/artist? This practice is not uncommon in capital markets, with allocation of new equity granted to favoured parties who then enjoy windfall profits, and which was at its height in the dot-com boom in the late 1990s. However, this may be unpalatable in some quarters.

The key problem is that the tickets issued for most events are "bearer" tickets (admittance give to whomever presents the ticket at the door) over which great care has been made to evidence their authenticity via embedded security and anti-counterfeit measures. As such private transactions can be easily conducted away from the managers and promoters. Unless this is addressed by the Managers, and "bearer" tickets discontinued, the secondary market will be able to easily avoid the levy.

Furthermore, I'm not even sure that the "Prisoners dilema" applies in this case, were one of the online operators to break ranks and agree to participate, since the others could operate without penalty. Ultimately, consumers just want access to the tickets and I suspect are less likely to care about a kite mark if the online exchange provides money back guarantees.

The timing of this initiative is very interesting though, as the UK Govt Select Committee is due to report in early 2008. In launching the RSS, the MMF has effectively endorsed the principle of secondary markets, which is a reversal of the position presented to the Select Committee which proposed that they legislate against the secondary market and effectively outlaw the reselling of tickets for a profit in a similar manner to sports events such as soccer.

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Weak dollar keeps Warner Music afloat Friday, November 30, 2007

If it weren't for a weak dollar, Warner Music result for the quarter to Sept 30 would have been even more uncomfortable. As it was the translation of overseas earnings into dollar equivalents was flattered by the decline in the value of the dollar, allowing them to report that £1 of sales was worth more in dollars than in the previous period.

PaidContent has the following report

As expected, the Warner Music Group (NYSE: WMG) quarter ending Sept. 30 proved to be a challenge: The company booked revenue of $869 million, up 2 percent from last year’s $854 million, although on a constant-currency basis, revenue would have declined by 2 percent. Net income slid to $5 million ($.03 per share) during the company’s fiscal Q4, from $12 million ($.08) in the year-ago period. Digital helped make up for weakness in physical sales, as revenue hit $130 million, up 25 percent from last year’s $104 million, and 9 percent higher than the previous quarter. Digital accounts for 15 percent of the company’s total revenue, which is roughly where it stood last quarter.

-- Recorded music sales grew by .7 percent to $736, though again, there would have been a slight decline if not for currency effects. Domestic recorded music revenue grew by 7.6 percent, while international slipped 6.3 percent. This was the same story as last quarter, but the company says this isn’t a trend, but rather a matter relating to the timing of albums of certain popular artists in each region. In other words, last year’s lineup of releases was particularly weak in the US.

-- Music publishing revenue grew by 7 percent to $137 million, although most of this was due to currency. Digital publishing revenue came to $7 million.

-- Results included $9 million in restructuring charges and a $12 million gain from the Bertelsmann/Napster (NSDQ: NAPS) settlement.

The full company release is here.

Bottom line is $5m on revenues of $869m i.e 0.6% margin after tax (big jump in tax charge relative to previous period). And people look at me with surprise when I suggest shorting the stock, perhaps because they can't believe it can get worse. I can.

One interesting snippet from PaidContent conference call was that already, non-music sales (merchandise, touring) represent 5 -15 percent of music revenues in some Asian markets, although the company isn’t giving any indication of where this is expected to grow to, or what the breakdown will look like in the US. CEO Edgar Bronfman Jnr insisted that these shouldn’t be called ancillary businesses, as they’re core to the WMG model.

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Universal CEO didn't know what they didn't know Tuesday, November 27, 2007

There's a report here about an interview in the Dec edition of Wired with the CEO of Universal Music Group, Doug Morris.

He makes clear that their failure to capitalise on music downloading in the early days of the internet and file sharing was simply through ignorance of the possible.

When Morris is asked why the music business didn't work harder, in the early days of file-sharing, to build its own (legal) online presence, there's this exchange:

"There's no one in the record industry that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"
Personally, I would hire a vet. But to Morris, even that wasn't an option. "We didn't know who to hire," he says, becoming more agitated. "I wouldn't be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me."
Even though we shouldn't be, we're actually a little shocked. We'd always assumed the labels had met with a team of technology experts in the late nineties and ignored their advice, but it turns out they never even got that far — they didn't even try!

I would stake a chunk of cash on there having been numerous people who tried to talk to Universal (and other labels) about the possibility of collaborating on such a venture but who were all rebuffed at lower levels by "business development people" who would have claimed that they were too busy on more important things and that this wasn't a priority for the business.

Do I have inside knowledge? Nope, but make this assertion since I see the same thing happen on a regular basis with big companies, who turn away ideas that are offered to them without really giving them much thought or because the points of entry to the organisation are not staffed with the right calibre of people. Whilst some ideas are daft and organisations have restricted bandwidth, it's rare that companies have a unique insight into "the next big thing". I always believed that the job of the door keeper (biz devt) is to search for and welcome/"catch" lots of such innovations for an initial evaluation and not shoo them away.

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Deacon Blue - Real Gone Kid Monday, November 26, 2007


Deacon Blue
Originally uploaded by Alec Sp
I had such a fantastic evening last night. It was the last night of Deacon Blue's 2007 tour and a group of four of us went as guest of Jim, the keyboard player. They have been one of my favourite bands ever since University days, and I have many great memories of them.

One summer I went backpacking around America and had the great fortune to see them perform in a small bar in Washington DC on their first US tour. A group of five brits from the youth hostel joined me at the gig, which was awesome show, after which we had some beer with the band. We were given a US tour t-shirt, which I still have and wear every time I go to see them.

Since then, I've seen them many times but last night was really special. Playing at Hammersmith, which is my local venue, they did a fabulous set to a three-quarter full house, who received them with rapturous applause and sang throughout - I was without a voice this morning (much to the delight of many).

After the show, the four of us went backstage to have drinks with the band, which was great fun. The band spotted the t-shirt and I chatted with Jim about that night in Washington (he politely pretended to remember). To cap it off, I got to take home a live recording of the gig, courtesy of Concert Live which I have been listening to in the office all day today.

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That's one bite of apple for you, five for them and four for me Tuesday, November 20, 2007

Mashable's quick guide to how the record pie slices up.

Out of every track sold for $.99, Apple receives $.35, the artist takes $.11, and the record label walks away with the lions share at $.53.

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Not bad for a day's work

I was with the boss of a music artist management company today chatting about the live sector. He commented that the live sector success is actually slanted towards the high end acts and the summer festivals market. Many acts aren't seeing the same results trickle down to them.

The festivals are providing bumper pay-days for some acts. Oasis reported got £1m for headlining at the V festival whilst the 3rd on the bill got £300k. Headliners are typically getting between £500k-£1m payout for an appearance. Bearing in mind these aren't usually full shows, but short sets that an act plays, it's very attractive work.

It's noteworthy that many festival goers often sign-up/buy tickets well ahead of the line-ups being announced simply on the basis of the event e.g. O2 wireless festival, V Festival, Glastonbury.

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Jay-Z - are you sure about this? Friday, November 16, 2007

Shawn "Jay-Z" Carter recently announced that his new album, American Gangster, will not be for sale through iTunes—not because of DRM issue or flat-rate pricing. Nope, it's because he doesn't want the album to be broken down into individually-purchasable tracks.

"As movies are not sold scene by scene, this collection will not be sold as individual singles," Carter said in a statement. Apparently it's the kind of album that you have to listen to from start to finish in order to really understand it.

Ok. So we can also conclude presumably that a) there will be no CD singles from the album b) radio stations will be barred from playing solitary tracks from it, lest the true art not come through. Moreover, the music video will include all the tracks from the album in one (long) piece. As for the downloadable ringtones.......

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Mobile phones companies need to jump to the beat Tuesday, November 13, 2007

Edgar Bronfman, CEO of Warner Music (and 70% controller of Warner shares with his Private Equity firm), is berating the mobile phone manufacturers to make their phones easier to use as music devices!

After all, these devices sit in the sweaty palms of 3 billion people, which are customers that Edgar want to get his hands on, if he and his colleagues are to have any hope of reversing their lingering demise. Trading at $8, down from their float price of $17 of two years ago, Pali Research now has them down at $5 target price.

Edgar conceded that the pace of demise of the CD market took them by surprise. To offset this they are now looking to use mobile phone downloads to drive growth. Plus they are now looking to monetise a wider set of related products including concert tickets, videos, merchandise and other goods.

Hmmm. Me thinks that the mobile operators aren't going to give up their customers or related value so easily. Content is great, but exclusivity is important and which label is going to want to do exclusive deals in a territory.

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Songza - music search that rocks

Seeqpod is one of my favourite sites, providing an excellent music search service with an embedded audio and video player of tracks found. Moreover, if you are a registered user, you can create and store playlists.

Along similar lines is a site I stumbled on today called Songza, which describes itself as a music search engine and internet jukebox. The simplicity of the site is its essence, but it is both slick and stylish with a very neat user interface. The site has a built-in audio player which sits unobtrusively sits at the foot of the page.

Clicking on a search result, pops up a control allowing you to play, share, rate (quality of audio), add to playlist.

One surprise was that the link to "discography" took me into a google music search service (not a well advertised service) which brought back a raft of info on the artist. I'm surprised more people aren't using this service but perhaps I'm not alone in having been ignorant of its' existence.

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Cliff Richard's new buying group Monday, October 29, 2007

Welcome to the Cliff Richards download lottery - or should that be buying group?

Today's news that Sir Cliff is embracing the new world of disruptive economics is fascinating on so many levels. In case you missed it check the story here, but in essence Cliff and his record company EMI are embracing the notion of buying groups and bulk discounts.

Here's how - Cliff is setting a maximum price of £7.99 to download his new album, but depending on how many people pre-register for the album, the price could drop to £3.99. And of course, fans can help drive the price down by encouraging others to download it too! Cliff maximises his revenues, gets good PR, and of course drives up album sales so that he may get to top the album charts.

The music industry is suddenly trying out every economic model in an attempt to find one that works!

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5 alternative business models for the music industry Thursday, October 11, 2007

Last 100 has an interesting commentary on business models that might be applied to the music industry, which usefully summarises some of the most well known models being rolled out.

Will this lot below listen? Hmmmm.

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Money or Principle

Techcrunch has a report that Madonna has signed a $120million deal with L.A. based concert promotion firm Live Nation to distribute three studio albums, promote concert tours, sell merchandise and license Madonna’s name.

Hmmm. Do you think that the $120m may have swayed her more than the politics of the music industry? As for Live Nation, it seems an obvious steps to hire the performers directly to go on tours for them, with the albums simply being the promotion device. I suspect it won't be the last deal of this sort, albeit the sums involved may differ.

Total revenue (called "360 degree) deals aren't unusual - remember Robbie Williams did this a few years back. Likewise, Elton John has been doing a live nightly show in Las Vegas for years.

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Breaking up is never easy I know - Abba Wednesday, October 10, 2007

You may have read that Snocap and CD:Baby have parted company. In case you are unaware, CD:Baby is effectively one of the world's largest music wholesalers, and even supplies about a third of iTunes catalogue. They have relationships with hundreds of thousands of artists, for whom they provide a wholesale distribution and retail CD shipping service.

I met their CEO a few weeks ago in London, with whom I've remained in touch. When I enquired about the Snocap breakup, he sent me a copy of a text he'd supplied to a music magazine about the news. Clearly, this is one-side of the story, but worth taking note of nonetheless

I learned a hard lesson this year:

Sometimes the best deal for everyone is no deal at all.

In December 2004 Snocap contacted CD Baby about being a part of our digital distribution program. They were a P2P fingerprinting service to help P2P services track and charge for music.

Since CD Baby has over 2.5 million songs directly from the artists, in full WAV format with all metadata, they wanted to import our catalog into their tracking system.

After almost two years in ongoing contract negotiations, in August 2006 Snocap completely changed their business plan to what you see today. Now they still wanted our entire digital distribution catalog, but it was to create Flash widget stores on MySpace, which sounded
like a great idea, so we said OK.

But there was one crucial hitch with this plan: our two options from Snocap were:
(1) - After delivering our entire catalog, step aside for the artists to deal with Snocap directly
(2) - After delivering our entire catalog, administer all activity through our site

The downside to #1 was the obvious "tell your 200,000 clients about us, then make them our clients for free, and get out of the way." The downside to #2 was that artists would have crippled accounts, unable to upload new material, change their pricing, or anything else.

But there's an important lesson learned, in hindsight: At this point we should have walked away, and chosen "neither". We felt screwed either way. But because of two years and thousands of dollars invested into these negotations, we chose option #2. We were assured
that #2 wouldn't be so bad, that any audio we sent them would be activated within hours, that we could send through pricing changes, and many other things.

Unfortunately, everything went about as wrong as could be. Artists had to go through a 21-step process to activate their accounts, which left us with thousands of daily confused emails from artists.

Furious artists trying to upload their songs into Snocap were wrongly told they can't because CD Baby "owns" their rights.

We had to hire 6 new full-time customer service people just to deal with the thousands of problems. We couldn't fix problems ourselves, because all the fixes had to be done by Snocap. So a thousand times a day we had to just helplessly apologize to our clients.

Every company meeting revolved around Snocap. Every employee had to be trained in the endless FAQ about Snocap. For the last 8 months, the CD Baby office has felt like a Snocap office. All we were doing, all day long, was dealing with Snocap issues.

Then the sales reports came in. $12,000 total sales for the 8 months they'd been active. Since we keep a 9% cut, that's $1080 for us, total. Ouch.

As a curiosity, I quietly enabled MP3 sales on cdbaby.com, without telling anyone. A "buy MP3" button showing up next to the "buy CD" button. In 3 weeks, with no announcements, we sold over $110,000 in downloads. Hm.

We decided to do what we should have done in the first place: to choose "no deal" as the best deal for our artists. We told Snocap we needed completely out of the contract, at any cost. Luckily, they agreed. By breaking all ties with Snocap, our artists can go directly to Snocap with no conflicts at all, and we can free-up our 24 full-time customer service people to help our clients with other things besides Snocap issues.

We're happy with it, for obvious reasons. Snocap is happy to have the direct relationships with the artists. The artists are happy to have full control and one less middle-man.

And I share this tale with no hard feelings, for the few who have asked, "What happened?", and the many more that might recognize themselves in a similar situation, and remember that sometimes the best deal for everyone is no deal at all.

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