Music Ally

In the first of a five part series on how internet intelligence can be used to create new metrics for measuring music, we speak to Eric Garland, CEO of BigChampagne. Founded in 2000, BigChampagne started by monitoring filesharing activity but now works with record labels and movie studios measuring numerous types of entertainment usage.

Eric’s comments can be found as part of an extensive feature analysing the market for music metrics, alongside observations from other leaders in the field including executives from WaveMetrix and Nielsen BuzzMetrics. To read the feature, log in or sign up for a free trial of the Music Ally Report. And continue reading after the jump for Eric Garland’s fascinating insights into the world of digital music metrics.

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With years of experience as a music industry publicist, Wayne Rosso came to the digital music world’s attention as boss of unlicensed filesharing service Grokster. Then he attempted to pioneer a legal p2p model with Mashboxx, before more recently becoming associated with a failed attempt to buy The Pirate Bay and legitimise it.

We talked to Rosso for a feature in the latest Music Ally Report, which subscribers can read here – while non-subscribers cansign up for a free trial. Find the Q&A after the jump.

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Think tank Demos has released the results of a survey into how much UK consumers spend on music, and where they get it from. The headline that most coverage has run with is that the keenest illegal downloaders are also the keenest legal music buyers, spending £77 a year on average, compared with the £44 of non-filesharers.

However, 61% of illegal downloaders admitted that they would be put off by the threat of having their broadband suspended for a month. The data is thus being used to both condemn and justify the UK government’’s plans for a graduated response approach to tackle piracy.

The Register makes a more interesting point – that P2P users are also spending money on other types of entertainment service – Sky+ digital TV for example. “By failing to be competitive with rival rival entertainment sectors, the music business is losing its wallet share”.

Earlier this year, P2P client LimeWire got a new feature that allowed people to share files with their Facebook friends. Well, it’s been slapped down by the social network, after initially asking LimeWire to make some changes to the way it worked.

“Unfortunately, this week we were contacted again… this time not with a change request, but with a notice that they are going to disable the feature,” blogs LimeWire’s Jason Herskowitz. “Rather than leave you with a broken LimeWire, we decided to disable the feature before they did so.”

It’s not the first time Facebook has acted not-so-friendly with file-sharers – earlier this year, it squashed a similar feature on The Pirate Bay.

Music Ally’s sister consumer research company The Leading Question has released data from its fourth annual Speakerbox survey of UK music fans showing a drop of a third in regular music filesharing amongst UK teenagers.

For the first time the survey also showed a higher percentage of fans regularly purchasing downloads (19%) compared to obtaining tracks from file sharing (17%). The volume of tracks obtained for free compared to purchased tracks had also narrowed from 4:1 in Dec 2007 to 2:1 in Jan 2009 when the face to face survey of over 1,000 music fans was carried out.

We think the positive figures represent both greater takeup of legal streaming services among teens – in particular YouTube – and other competing ways of finding music for free such as CD burning and Bluetooth. Nearly twice as many teens (31%) stream music every day compared with most music fans (18%).

However, the fact that UK teens are using YouTube as a legal source of music jars with the fact that YouTube UK has removed all premium music videos due to a dispute with PRS for Music. Perhaps this research will provide an extra incentive for the pair to resolve their licensing disagreement.

A new survey by Ipsos MORI claims that two thirds of people who illegally download music online would switch to legal models if the price was right.

Which is a pretty general thing to say – what price is the right price? The report does give some indications. Only 10% of respondents were interested in buying music tracks at iTunes’ most common £0.79 price, but at £0.45 a track, this increased to 32%. Which, judging by the two-thirds claim, means a further 34% would only pay less than 45p per track.

Interestingly, the survey – which asked more than 1,000 peopl about over 30 digital content distribution models across music, film and games – found a continued preference to download-to-own, over ad-supported streaming or subscription models.

Global Gaming Factory CEO Hans Pandeya has been explaining his company’s plans for taking The Pirate Bay legit, following its acquisition earlier this week.

In short, he plans to pay users for sharing files, and pay rightsholders who provide the files that are shared. And he’ll raise money from ISPs in return for reducing the strain on their networks.

“Let’s say a popular song comes out. Rather than a million downloads from a site – which would cause a considerable strain on that ISP – we can take that song and put it out on P2P,” he says.

As Mashable points out, this strategy depends on a.) users sticking around, b.) rightsholders agreeing to such a deal, and c.) ISPs seeing enough benefits to pay for it. Meanwhile, Business Week highlights more potential legal and commercial obstacles to the new plan.

UK tech firm Detica has launched a new tool called Price for Music, together with SoundExchange, which aims to let anyone predict the level of piracy in the future – and what impact new pricing models might have.

“One of the greatest problems facing the music industry is its inability to measure and forecast the impact of various remedies, particularly pricing models, on music consumption,” says director of media Andy Frost.

“Our ‘Price for Music’ model allows the music industry to see into the unknown and provides projections of traditional and new revenue streams based on historical performance and a variety of alternative future scenarios.”

Interested in punching in some numbers? Click here.

There’s been conflicting research into how internet users will react to a letter from their ISPs warning them not to file-share. Some insight into how hardcore P2P users would react is provided by a survey on blog TorrentFreak, which asked its readers what they’d do in event of such a warning.

41% said they would take steps to conceal their identity using a service to hide their IP addresses – examples being BitBlinder and The Pirate Bay’s IPREDator. Only 7% of respondents said they would stop file-sharing.

Bear in mind, of course, that TorrentFreak’s readership are more likely to be pro-P2P and fairly tech-savvy, so these results aren’t indicative of the wider population. In that light, it’s more evidence that the warning letters strategy should probably be judged on its success in deterring more casual file-sharers.

Minnesota resident Jammie Thomas-Rasset has been found guilty (again) of wilfully infringing 24 copyrighted songs, in her file-sharing retrial.

And startlingly, the jury upped the damages awarded to the labels from $9,250 per song in the original verdict to a whopping $80,000 per song this time – leaving Thomas-Rasset with a bill for $1.92 million instead of the original $222,000.

Mindful of the negative PR implications, the RIAA has hinted that it won’t seek the full amount. “Since day one, we have been willing to settle this case, and we remain willing to do so,” says spokesperson Cara Duckworth.

This may not be the end of the case, though – Thomas-Rasset’s lawyers are apparently mulling a constitutional challenge to the verdict due to the sheer scale of the damages awarded.