THE VAST LONG TAIL

Below is my Webwalk column from last week’s Herald about how one of my favorite bands, Vast, has managed to harness the long tail to stay independent in the music industry. There are thousands of stories like this but Vast’s example is one I’ve followed closely as a fan and someone who has downloaded their music.

By the way, Vast is a fantastic, highly under-rated band. They’re hard to put in a box, but there’s a bit of Nine Inch Nails in there, some Garbage, echoes of U2 and New Order. It’s melodic, luscious sounding hard-edged rock and Jon Crosby is a great vocalist who pens thoughtful lyrics. A good starting point with Vast is their first album Visual Audio Sensory Theater. Music For People was a terrific follow-up to that. Once you’ve tried those two, there’s a Vast world to explore.



WEBWALK

By Peter Griffin

The New Zealand music chart began counting songs downloaded via the internet this week and already the change is noticeable.

As the Recording Industry Association pointed out yesterday, hip hop and R&B songs are climbing higher up the Top 40 chart, largely due to the fact that music downloads to mobile phones are now counted.

And Regina Spektor’s catchy single Fidelity debuted at number 16 thanks to digital downloads. It wasn’t released as a CD single here, only as a digital download and on the album Begin To Hope.

The changing shape of the charts illustrate how the internet is being used to get music to a diverse range of niche audiences, something known as the “long tail” effect. It means that in future, the charts may not be full of only those acts that are receiving the most airplay and industry promotion, but also acts that have successfully captured the attention of the online community.

It made me think of one little music industry story of the long tail I’ve been following closely.

One of my favourite bands is an inventive rock outfit appropriately called Vast (Visual Audio Sensory Theater). It’s the creation of American singer-songwriter and multi-instrumentalist Jon Crosby, who much like Nine Inch Nails’ Trent Reznor, likes to twiddle away in the studio on his own, comfortable working in the digital medium.

Vast flirted with big label success at the turn of the century after its song Touched appeared on the soundtrack to the Leo DiCaprio movie The Beach.

There were a lot of rave reviews.

“VAST will appropriately be huge,” proclaimed Kerrang magazine in 1999.

But Vast was dropped by Elektra when its sophomore album Music for People failed to make an impact on the charts.

So Crosby signed with small, independent label 456 Entertainment to release his third album Nude.

“There were so many problems dealing with them on every level,” says Crosby in an interview on Realvast.com.

“I feel we made a big mistake not believing in ourselves enough and doing it on our own.”

For every album since, Vast has gone it alone and gone digital, releasing its music primarily via the internet.

It was an acknowledgement by Crosby that maybe his music isn’t really for the mass market after all. But in the era of the long tail that doesn’t matter, because numerous lucrative niches can be reached via the internet.

Crosby set up his own label and media company 2Blossom.com.

As a Vast fan its great for me. Getting hold of the band’s albums even in specialist music stores like Real Groovy has always been tricky. After all, why would retailers devote shelf space to an album that isn’t a hot seller?

Now I can just download the albums through the website. The music is free of digital rights management, the files are mp3s encoded at 320Kbps (kilobits per second), which is CD quality. I can pay with my credit card via PayPal.

Best of all the music is very good value, too good really. I just downloaded Vast’s new album April, which cost me an embarrassingly paltry US$5.

But because Crosby owns the music and the record label, he’s not getting a mere slice of album sales, he’s now getting every cent.

Artists signed to major labels receive as little as US$1 per full-priced album they sell Cutting out the music industry middlemen means more money goes directly into the artist’s pocket. Without the marketing muscle of a record company which can hold great sway over which artists get radio play, which in turn influences music sales, an artist is unlikely to sell as much music.

But bypassing the traditional music industry business model has become viable, thanks to the rise of digital music download services and social networking websites that act as a digital hub for an artist’s fan base. The most notable examples are Myspace.com and Facebook.com. Vast has fan communities on both sites.

“The days of the aloof rock star are over,” says Crosby.

“Now more than ever doing new things is important, and if you can’t keep up with what’s going on, you’re left in the dust.”

In addition, since 2005, he has been selling annual subscriptions to the Vast fan club for $36 which includes a greatest hits compilation, audio commentaries on Vast albums and the chance to buy VIP ticket to shows. There have been 745 downloads of those – worth around US$27,000.

It’s not the big money usually associated with the music industry, but with music sales, touring and merchandise, it may be enough for a Crosby and his band mates to earn a living – and keep control of their destiny.

Crosby seems to like the model: “I feel like for the first time I have found my niche and my voice.”

This way of doing business will become the norm for all sorts of industries, but especially the creative, publishing and technology sectors which are most comfortable dealing in the digital medium.

For New Zealand entrepreneurs located far from our key markets, the opportunity that lies in the long tail is, well, vast.

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A CRACK AT THE RECORD BOOKS

My Herald on Sunday column about the Earthrace team abandoning their bid to circumnavigate the globe in their bio-diesel powered boat. The boat cracked after receiving a battering in the Mediterranean but it looks like the team may make a fresh attempt next year. Here’s hoping it’s smoother sailing second time around…

TOMORROW’S WORLD

They had a futuristic-looking boat, the noble intention of powering it with clean-burning biodiesel and the goal of motoring around the world in record time.

But the Earthrace expedition, its largely New Zealand crew headed by former oil exploration engineer Peter Bethune, on Friday abandoned its circumnavigation of the world.

The Earthrace boat cracked after receiving a major pounding in the Mediterranean and the time it would take to haul it out of the water and repair it would have made it impossible for the team to make the dash to San Diego and beat the 75 day circumnavigation record set by British boat Cable & Wireless in 1998.

Following the race on the internet, I was relieved when the boat successfully passed through the Suez Canal and into what I thought would be the relative safety of the Mediterranean. After all, the racers had endured so much. A week after setting out on its voyage on March 10, Earthrace was involved in a night-time collision with a fishing skiff off the coast of Guatemala which resulted in one of the fishing boat’s crew being killed.

If that wasn’t enough, it was also dogged by funding shortfalls and engine and propeller problems.

Reading the blog postings on the Earthrace website gives you an appreciation for the courage Bethune displayed in carrying on despite all these set backs.

On March 28 he writes of meeting the family of the fisherman killed in the crash with the skiff: “All were there except for Gonzalez, the man still in hospital. I start to speak to the group and there’s already a sore ache in my throat. Thirty seconds later and I start to cry, and that just sets of a chain reaction amongst almost everyone there.”

A few weeks later, with Earthrace plagued with technical problems, he ponders: “What if the crash hadn’t occurred? What if the original propellers had been OK? A whole series of incidents, that sees us in a difficult situation on a tiny Pacific island.”

It would have been nice to see Earthrace complete the 24,000 nautical mile trip and slip into San Diego in enough time to claim the world record. That won’t happen now, but what of the expedition’s real mission – to raise awareness of biodiesel fuels?

Well, the crew was interviewed wherever they touched land and pushed the biodiesel message. I saw Bethune on CNN late one night with a reporter from Singapore who went up to the Malaysian fields where the crops that made the fuel filling Earthrace’s tanks were harvested.

It wasn’t the biodiesel that held back Earthrace, though getting a regular supply of it, particularly in the Pacific ocean proved difficult at times and Bethune reluctantly had to fall back on conventional diesel at one point. The biofuel came from a wide range of suppliers and was derived from various cash crops.

Biodiesel production and usage is growing quickly around the world and new methods of biodiesel production are constantly appearing.

Marlborough company Aquaflow Bionomic last year produced what it claimed to be the world’s first samples of biodiesel fuel made from algae in sewage ponds.

But in the US, the fledgling industry faces major channels with the rising price of soybeans, a primary crop used for biodiesel there.

According to a study by economists at Iowa State University, US biodiesel production will double this year to 500 million, which accounts for around one per cent of US diesel consumption.

Corn-based ethanol production could grow to 15 billion gallons per year over the next 10 years according to the study which argues that further Government subsidies will have to be made available to encourage investment in biodiesel refineries.

In general, the business model for producing biodiesel still has plenty of kinks in it and will do until government policies to promote its production are widespread and crop growers and biodiesel makers alike are able to make a reasonable rate of return from their alternative fuel investments. The buy-in of the consumers of oil is also crucial.

The trials and tribulations of Earthrace are synonymous to those of the biodiesel industry itself. But like Earthrace’s goal to get around the world in less than 75 days was ultimately achievable, so too is a viable, global industry in cleaner fuels. It won’t be easy to get there, but as Bethune can attest to, its one goal worth making a considerable effort to meet.

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TELECOM CHANGES TACK ON MOBILE

UPDATE: A more in-depth Herald piece looking at the implications of Telecom’s shift in mobile strategy and my cHerald comment piece here. The Sunday Star Times business editor Tim Hunter explains the mobile roaming revenue Telecom can expect to tap into when it has a foot in the GSM/UMTS camp.

Juha’s scoop gives some interesting details of Telecom’s decision to spend $300 – $400 million on a GSM/UMTS network, confirming rumours that Telecom has been looking to extricate itself from CDMA.

I blogged about it in detail my Herald blog early this morning. So far, no official confirmation of the leak from Telecom and its shares are not on a trading halt, which is unusual given a development that is so material to Telecom’s business has been revealed. There’ll be lots of angles to this story. For instance:
– What will it mean for the newly flush New Zealand Communications which is set to build a GSM network itself? Maybe it’s a good thing as it will open up GSM roaming options.
– What about TelstrsClear? Will it exit the 029 arrangement with Vodafone in favour of some wholesale deal with Telecom?
– What about the hybrid network model Juha talks of, where CDMA is kept for high-speed data. How will this work for customers? Will they need dual-mode handsets to talk and use data? Will
EV-DO be restructed to PC data cards?
– What will Telecom do with its Hutchison 3G partnership? How will it leverage H3G services over here?

A few comments via the Herald:

From Keith:
Interesting comments about Telecom going GSM. I have been a Telecom mobile customer since 1989. I take a bit of an exception to your comment about CDMA being a bad choice. I have found call clarity and connections generally to be better with 025/027. In the early days 025/027 was far superior. Admittedly that may have changed in more recent times. Equally, my reading of the mobile data situation was that the Telecom products have offered better speed. Perhaps the only bad part of the decision is that the rest of the world went with a different standard. Had they gone CDMA then Telecom’s choice would have looked inspired!

As for a better selection of handsets. So what! It may be important for geeks and fashionistas but the rest of us get by with the Telecom selection (currently I have a Treo 600). I also have a work 021, a very nice and expensive Nokia, which I like. As for the Motorola RAZR phones, my previous experience with Motorola phones and modems including cable modems is that they are hopelessly unreliable. This was confirmed very recently when the boss “upgraded” to a Motorola RAZR which managed to die just prior to his overseas trip. I wouldn’t touch Motorola gear, no matter how nice it looks. I’ve also managed to persuade my kids to avoid it as well.

Telecom didn’t really have much choice by the looks of it, but for most of us it comes down to price and service, not technology.

Of course, with number portability maybe none of it matters. Not that the networks are saying much about that. Where is it at?

From Mark:
Interesting story on Telecom NZ move to GSM. I left NZ in April 1996 and went to work in Vietnam, where GSM mobile phone connections outnumber landlines by a considerable amount. I quickly realised (as you do when you work outside NZ) that a good proportion of the rest of the world also used it, and on my first trip back six weeks later gave my 027 phone to my wife and have been a Vodafone customer ever since. Interestingly, at the same time a good friend of mine owned (and still does) a Telecom franchise in New Plymouth and had no qualms telling me that CDMA would take over the world and texting would never take off. I could never convince him at the time that I thought Telecoms was a poor choice and that the rest of the world was moving in a different direction. I now own a triband Smartphone and use it in the US, Europe, the Middle East and SE Asia, roaming all of the time on Vodafone. It even worked in Brazil!

From Olga:
Your article is interesting but to share another aspect with you, as it happens Vodafone are erecting a tower & base outside my house today. This is despite my cries to Auckland City and Vodafone to move over it over the road where there are no houses.

So possibly this explains their hard stance with me.
There are bigger more powerful reasons, e.g. Telecom using the same facilities? Who cares about the safety (traffic concerns as base box obscures road & frequencies of units etc) of people when theres more profit to be made. Maybe the next time we read the glowing reports in the business section of the papers, you can highlight that the real price is being paid by a handful of affected people sacrificed for the sake of profit. What do you think??

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ZINWELL MOVES TO FIX FREEVIEW GLITCHES

Here’s the deal: New Zealand rolls out digital TV, claiming that being years behind the rest of the world in doing so means we’ll do it better, learn from the mistakes of others.

So our Freeview consortium goes and accredits only two suppliers of satellite receivers, to the outrage of set-top box importers who want their own various boxes accredited. One of those “official” suppliers, Zinwell, then delivers dodgy, faulty set-top boxes to the New Zealand public. How exactly did boxes causing serious radio frequency interference get C-tick certified? Bizarre. This is Zinwell’s business, it sells set-top boxes around the world. What’s its quality control processes like if it can’t handle something that basic?

Next Electronics, which acts as the service agent for the Zinwell boxes, put the below press release out last night, the first official acknowledgement from it and Zinwell that there is an issue with the Freeview receivers:

Zinwell ZMX-7500 Freeview Digital Receiver

Since the launch of Freeview on 2nd May and the retail sale of a significant number of Zinwell set-top-boxes we have had a 4.0% warranty return rate.

In introducing any new broadcasting technology into a country minor interference and or interface problems can be experienced due to varying standards of TV and audio systems’ interconnections.

Prior to the launch of the service both Zinwell and Freeview tested many units over an extended period and did not find the faults which have subsequently come to light.

These minor manufacturing defects have been investigated and will all be rectified shortly.

We are pleased to say that the experience of most installers with the Zinwell unit has been positive and they have had no problems installing them.

A new shipment of the product has arrived in NZ and will be used to replace units for customers who are experiencing any faults. This will be done on a case-by-case by basis by NEXT Electronics.

The warranty process is as follows:

    1. Warranty card in each box
    2. 12 months warranty
    3. Total replacement
    4. Contact NEXT Electronics on 0800 GO NEXT (0800 466 398)
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