Wall Street Journal Writes Off Music Podcasters

Jan 2nd, 2007 | By | Category: Audio Podcasting, Digital Music, Podcast-Legal Music, Podcasting Law

The Wall Street Journal today has a myopic report on the state of music podcasting, saying that podcasters have failed to make headway in the area of music podcasts.

The focus of the article is on the mainstream music industry’s tentative steps into the world of podcasting, but the article ignores the tremendous popularity of music podcasts that feature music from outside the world of the big four music companies.

“When podcasts attained prominence in 2004, amateurs and advertisers alike heralded the downloadable audio programs as the next step in the evolution of broadcasting,” writes WSJ’s Ethan Smith. “But they have failed to make headway in one key area: music programming.”

“The major record labels and music publishers that control the rights to about 75% of the commercially released music in the U.S. have refused to make deals that would allow songs to be used in podcasts,” adds Smith. “Consequently, podcasts have been blocked from using this music, at least legitimately. That has stopped music-oriented radio programming from being available as podcasts.”

The Journal article goes on to discuss a couple of podcasts San Francisco-based Rock River Communications is creating for DaimlerChrysler AG and Ford Motor Co, suggesting that the podcasts show that the music industry is changing its tune.

The mainstream music industry has been experimenting with unprotected MP3 distribution for years, and there’s not much to suggest that these new corporate podcasts represent a shift in the music industry’s business model of controlling access to music to create value for copyrighted material.

Over the last year or so, major labels have distributed free MP3s to promote artists, tested selling MP3s and even offered major label content in MP3 format as podcasts, Under the Radar.

While the mainstream music industry has been taking baby steps, indie artists have found that they can build an audience with free Web pages on MySpace, free music video hosting on YouTube and by promoting their music through podcasts. Hundreds of music podcasts are already available that feature indie artists and styles of music that have largely been ignored by the major labels and mainstream radio. Many of these music podcasts have developed substantial audiences, too.

As audiences for music podcasts grows, podcasting’s potential as a market for the major labels is growing, too. While some speculate that the industry will be forced to move to selling unrestricted MP3s and supporting podcasting, it seems more likely that the industry will continue to use a limited number of tracks as promotional content to promote its music, and continue to use copyright to control distribution.

Indie podcasters will continue to have very little access to mainstream music, while the major labels cut deals with a limited number of corporate podcasts. By offering tracks from major artists to a small number of corporate podcasts, the music industry can use the popularity of its artists to promote Internet music channels that it can control, rather than indie podcasts.

DaimlerChrysler AG and Ford Motor Company’s sponsored music podcasts may not signal a major shift in the major label’s attitude towards podcasting, but they do validate that there is a significant, valuable audience for music podcasts.

More discussion at Ars Technica, Seattle PI and Web Pro News.

3 Responses to “Wall Street Journal Writes Off Music Podcasters”

  1. Jughead says:

    While the article was kind of a snub to indie music podcasters the story may be very important for all music podcasters going forward.

    Since podcasts are mp3 files and can be easily redistributed because of no DRM, podcasters must begin thinking of ad supported and sponsorhip models if they are going to try and monetize their music podcasts. I agree that podcasts are great for introducing people to new music as a teaser. Outtakes, covers and unused acoustic and live concert song versions also make great podcasts. As does video. However, sales of cd’s are continuing to plummet and there is a growing concern over DRM by the music industry.

    Is it time to perhaps consider short form pre-rolls and post rolls in say two or three song podcasts? If you look at cd singles today, most try and entice you with an extra track that is not available on the original album (usually a live track). The same exact type of distribution can be dmne on a podcast. The problem is, where does the artist get paid? Is listening to a five second McDonald’s jingle going to deter someone from getting that new ColdPlay or Snoop Dog track?

    Obviously, one audio ad is not enough to offset the overall financial loss to the labels, but it’s a start. And it could pave the way for more innovations of delivery such as cool sponsored web widgets or other brand related web apps included in the podcast file. Video podcasts would present even more advertising opportunities.

    In the end, it might not matter as so many younger listeners have never paid for music that any sort of actions to monetize the music will be met with stiff resistance. However, musicians have to get paid somewhere along the line. Sponsored podcasts or ad inserts before and after music tracks in podcasts is one alternative.

  2. Ed Roberts says:

    I really see very little future for monetizing podcasts as a way to supplement musicians. The reason independent musicians are getting into podcasting is because that by hearing their music, and having a podcaster get excited for it, encourages people to buy their music. Plus, because music podcasts appeal to such a broad range of people, the value to a potential sponsor is rather limited compared to more niche podcasts. Pay for play (which ad cuts would be a version of) will never work in podcasting, at least outside of the major media mongols.

    I agree, and think it’s irresponsible for the Wall Street Journal to write off music podcasters because of the lack of major label music. Honestly, there is some GREAT independent and small label music out there (as well as a lot of BAD independent music). What we are seeing is a paradigm shift in the music industry. Buzz about a musician or band is being generated from the consumer again and not artificially created by major label dollars and marketing, as has been the case for some time.

  3. julien says:

    yeah, this thing was pretty backwards. music podcasters have pretty much left the mainstream behind, so i don’t understand why we’d be at their beck and call now. but it does leave good opportunities for music promotion, that’s for sure.

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