Behind the Numbers: Song Streaming

March 30, 2015

Michael Driscoll 03/27/15 WSJ.com

Payments in the recording industry were once a straightforward affair. A label sold a compact disc through a retailer like Tower Records, and percentages from that one-time sale were divvied up among musicians, the label and others involved in the process of making and distributing the music. That was about it: a single transaction multiplied by, at most, several million albums sold for top artists.

The advent of the streamed file has complicated the equation. A streaming service sells access to a song–a single listen, rather than a permanent copy of the recording–and a tiny per-play sum is split among the same coterie of musicians and industry players. But now what was once a single transaction for a CD purchase is multiplied by hundreds of millions, and even billions, for each individual “listen.”

“You go from selling 10 albums to a hundred files to a million streams, and the amount of data you’re dealing with is phenomenal,” says Martin Goldschmidt, co-founder of the U.K.’s Cooking Vinylrecord label, whose roster of musicians includes the Prodigy, Marilyn Manson and Groove Armada.

The new distribution model may be a boon for those interested in knowing exactly how many times their songs are played, and by whom. But managing per-song, per-play transactions isn’t a simple task.

A figure Spotify AB released last year hints at the scope of the data involved. In a November blog post, Chief Executive Daniel Ek said the company had paid $2 billion to artists and other rights holders since 2008. Given its payments average 0.6-0.84 cent per stream, that would amount to more than 250 billion transactions.

And that’s just Spotify. Songs today are streamed on an array of services, whose big players include YouTube, Rhapsody and Pandora. And those services may have different pricing levels even within their own frameworks, like Spotify paying higher amounts for songs streamed by paying customers than for songs streamed on its free, ad-supported tier.

“You need to build whole new systems to deal with it,” says Mr. Goldschmidt, who thinks the people focusing on minuscule payouts for each stream have their priorities misaligned. “It’s a much bigger problem than just the [per-play] numbers.”

Willard Ahdritz, chief executive of Kobalt Music Group Ltd., has built a system to help manage the data deluge. He founded his company in 2000, in the early days of music on the Internet. Today, in an average week, Kobalt tracks digital royalties for about 40% of the top 100 songs and albums in the U.S., the company says.

Cooking Vinyl has established its own framework to manage the many revenue streams, Mr. Goldschmidt says, adding that he sees tracking such payments as a vital part of his work with musicians.

“We’re really good at it,” he says. “It’s important that artists are accounted to properly.”

Kobalt’s Mr. Ahdritz says he sees addressing accounting problems as key to helping bring cash back to the music industry, whose revenue in the U.S. has fallen by half since peaking around $14 billion in 1999.

“Very few…can process the volume of data so actually people get paid,” he says. The industry can be “significantly more profitable than it’s ever been before, if you run it with the right structure.”

Apple and Beats Developing Streaming Music Service to Rival Spotify

March 26, 2015

By BEN SISARIO and BRIAN X. CHEN NYTimes.com 03/25/15

In what would be the biggest change to its music strategy in years, Apple is pressing ahead with a sweeping overhaul of its digital music services that would allow the company to compete directly with streaming upstarts like Spotify.

Almost a year after agreeing to pay $3 billion for Beats, the maker of hip headphones and a streaming music service, Apple is working with Beats engineers and executives to introduce its own subscription streaming service. The company is also planning an enhanced iTunes Radio that may be tailored to listeners in regional markets, and, if Apple gets what it wants, more splashy new albums that will be on iTunes before they are available anywhere else, according to people briefed on the company’s plans.

In a sign of how important Beats is in reshaping Apple’s digital music, the company has made a musician a point man for overhauling the iPhone’s music app to include the streaming music service, as opposed to an engineer. Trent Reznor, the Nine Inch Nails frontman who was the chief creative officer for Beats, is playing a major role in redesigning the music app, according to two Apple employees familiar with the product, who spoke on the condition they not be named because the plans are private.

Perhaps most telling for Apple is what its new streaming service will not have: a lower price than rival services.

According to several music executives, who spoke on the condition of anonymity because the talks are private, Apple recently tried but failed to persuade record labels to agree to lower licensing costs that would have let Apple sell subscriptions to its streaming service for $8 a month — a discount from the $10 that has become standard for services like Spotify, Rhapsody and Rdio.

That $2 markdown may be small, but Apple’s failure to secure it reflects a shift in the company’s relationship with the music industry. While Apple once enjoyed enormous negotiating power as the dominant force in digital music — an area it helped pioneer more than a decade ago with music downloads — it now faces an array of new competitors and finds itself in the position of needing to modernize its offerings to catch up to the streaming revolution.

That has weakened Apple’s leverage — and the labels could not be happier about it.

Toni Sacconaghi, a financial analyst for Sanford C. Bernstein, said that Apple’s apparent struggle over lowering the pricing of its music service now was a result of being late to the streaming game.
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“They’re used to being a shaper rather than a responder,” Mr. Sacconaghi said. “This is one of the few times where Apple is playing catch-up and not necessarily coming from a position of strength.”

Tom Neumayr, an Apple spokesman, declined to comment or make executives including Mr. Reznor available for interviews.

Apple’s turn toward streaming is a matter of necessity, as listeners increasingly shift from music downloads to streaming. According to the Recording Industry Association of America, downloads generated $2.6 billion in revenue in 2014, down 8.5 percent from the year before. Streaming made $1.87 billion last year, and overtook CD sales for the first time.
Continue reading the main story Continue reading the main story
Continue reading the main story

As the biggest retailer of music, Apple remains a crucial marketing partner for the music industry. Yet its absence from streaming has let others get a head start. Spotify, which started in Sweden in 2008 and came to the United States in 2011, said in January that it has 15 million paying subscribers around the world, as well as 45 million more who listen free, with advertising. (Apple’s iTunes has more than 800 million customer accounts.)

Exactly how Apple will match Spotify is unclear. Music executives say they have not been shown a prototype of the new streaming service, nor been given much detail on it.

The new music app, which is a collaborative effort between Mr. Reznor and other Apple and Beats employees, including Jimmy Iovine — who founded Beats with the hip-hop star Dr. Dre — will feature the streaming music service with many of the same characteristics as the Beats Music streaming service, one Apple employee said. Those may include curated playlists and a more vivid visual appeal, while conforming to Apple’s sleek and minimal design aesthetic, one person said. The name Beats Music will most likely be shed.

According to an Apple employee, the service is being tested as part of a new version of the company’s mobile software system, iOS, which has been given the code name “Copper” and is expected for public release this year.

Mr. Iovine has set the tone of the transformation of Apple’s music plans, according to music executives. Mr. Iovine, who reports to Eddy Cue, Apple’s head of software and Internet services, has been leading aggressive talks to secure prominent album releases that will be exclusive to Apple, akin to what Beyoncé did when she released her self-titled album on iTunes in December 2013. One music executive involved in the negotiations described this part of the new iTunes as “Spotify with Jimmy juice.”

A crucial difference for Apple’s streaming service is that unlike Spotify, it will have no free tier. That has greatly pleased top executives at major music labels, who have begun to complain openly that so much free music has given consumers too little reason to pay for it.

Apple is also expected to overhaul iTunes Radio, the free service that the company introduced in September 2013 as a competitor to Pandora, and which has had little impact on the marketplace. One new player is Zane Lowe, a former BBC radio D.J. known as a trend-spotter. Last month he announced that he would join Apple in Los Angeles, where the Beats team is concentrated.

Mr. Lowe is expected to play a role reconfiguring iTunes Radio. Among the ideas that have been floated for iTunes Radio are a more geographically targeted approach that would bear some resemblance to a traditional radio station, with Mr. Lowe as the voice, music executives said.

Whether or not Beats is a success, it would make just a small dent in Apple’s overall business. Mr. Sacconaghi of Sanford C. Bernstein noted that if Apple’s streaming music service were to make as much money as, say, Pandora, which generates roughly $1 billion in revenue a year, that amount would be less than one half of 1 percent of Apple’s annual $183 billion in revenue.

Ben Bajarin, a consumer technology analyst for Creative Strategies, said that the hope for online entertainment services like Beats is to add more hooks for people to keep buying Apple products. But a music service is just one potential lure among many others in Apple’s offerings, like apps, movies and the iPhone’s operating system.

“In the grand scheme of things, this isn’t trying to be the next big business,” Mr. Bajarin said of Beats Music. “It’s just trying to be an evolution in their ecosystem that has many moving parts, not just one.”

Roadies: Unlikely Survivors in the Music Business

March 25, 2015

Roadies’ elevation to ‘concert technicians’—the term many practitioners favor—is reshaping their culture
For today’s roadies, sex, drugs, and rock ’n’ roll are out; efficiency, tech skills, and professionalism are in, as musicians take to the road more often to make money

Neil Shah 03/19/15 WSJ.com

The shakeout that is rattling the music business is turning up some unlikely survivors: roadies, the black-clad backstage grunts of live shows.

“I know musicians who play on the road who make less money than the tech guys I know,” says Jimmy Davis, the stage manager for country singer Hank Williams Jr.

Roadies’ elevation to “concert technicians”—the term many practitioners favor—is reshaping their culture. Sex, drugs and rock ’n’ roll are out; efficiency, tech skills and professionalism are in. “We’re the Marines of the music business,” says Tom Weber, who got his start filling in for an absent roadie at a Kiss show 40 years ago.
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Now 57 years old, Mr. Weber is one of many roadies who have converted a one-off gig into a career. In a good year, Mr. Weber, who lives in Kentucky, earns about $200,000—a princely sum for a nonprofessional job. He is in demand, with high-profile artists such as the Cult’s Billy Duffy balking at touring without him.

Mr. Weber has maintained guitars for Van Halen, Poison and Nine Inch Nails as well as country stars Reba McEntire and Lyle Lovett. Before each show he restrings nearly every guitar and says he has “never had an artist break a string on stage.”

One typical roadie job—sound engineering technician—pays $57,000 a year, on average, according to the Bureau of Labor Statistics. (The figure doesn’t take into account the legion of roadies who are self-employed.) Surveys by the Berklee College of Music say a “front of house” live-sound engineer—the person who controls what concertgoers hear—earns at least $60,000 a year, and can top $120,000. Road managers can earn $125,000 or more. Tour coordinators? $175,000.
Speakeasy: A Day in the Life of a Roadie

The ascent of the concert technician reflects a seismic shift in the economics of the music industry. As concerts and festivals increasingly become a vital source of profits, cultural “middlemen”—label executives, talent scouts and other traditional tastemakers—are losing clout, experts say. Technical middlemen—artist managers, concert promoters, festival organizers, and social-media promoters, as well as DJs and roadies who mix sound at shows—are gaining it.

That makes bands increasingly reliant on live performances to make money, spurring demand for stage hands, instrument techs, sound mixers, lighting specialists and tour managers. The physical labor needed to erect elaborate, high-tech stages has spared most roadies. Their jobs can’t be moved to China or be done by a robot—at least not yet.

“Employment opportunities in the live-music industry have never been better,” says Gary Bongiovanni, the editor of Pollstar, a trade publication. “While record-company jobs have nearly disappeared, road- and tech-production-crew gigs continue to grow.”

It’s hard to pinpoint how many people work in the music industry because many of them toil in ancillary areas, such as promotion or transportation, that support artists. Federal surveys don’t track the industry’s scores of part-timers and freelancers.

The North American concert industry was valued at $6.2 billion in 2014, Pollstar estimates, up from $1.4 billion in 1994. Multiday festivals such as Coachella, Bonnaroo and Sasquatch! are flourishing, generating jobs to handle setup, security and operations.

Two years ago, Gavin Rossdale, a singer and guitarist in the rock band Bush, hired Mr. Weber for a gig. Before working with Mr. Rossdale, who is married to singer Gwen Stefani, Mr. Weber spent a week reading a 201-page manual for the Fractal Audio Axe-FX II, a complex guitar-effects system Mr. Rossdale wanted to use. To learn the ins and outs of the $2,300 system, Mr. Weber eventually bought one of his own.

“You have to know your stuff,” says Dick Adams, 69, a production manager for Metallica, Pearl Jam and Heart. A big part of the job is keeping up on the latest toys for musicians, he says. “You have to do a lot of reading.”

Despite the enduring caricature of roadies as tattooed guys with beer bellies in heavy-metal T-shirts, today’s concert hands often resemble computer geeks—and many of them are women.

“There are a lot of women in all kinds of positions—not just wardrobe and catering,” says Meg MacRae, 44, a tour manager and production coordinator who has worked with Bon Jovi and Neil Young. On a recent arena-size tour, she counted eight women among 60 crew members.

Ms. MacRae’s main job is putting out fires that inevitably erupt as her crews adapt to different venues. In between 18-hour days, she relaxes with yoga. Her only regret about her career: She and her longtime boyfriend haven’t had children. “I chose to marry the road,” she says.

The occasional brushes with celebrity and other flashes of glamour aside, working concerts isn’t for everyone. The job means extensive travel, which can be hard on relationships, and it often exacts a physical toll, including hearing loss. The flow of assignments can be irregular and the hours long and unpredictable. Roadies often earn a flat fee for a day’s work, whether it runs for four hours or 14.

Glen Rowe of Cato Music Ltd., a U.K.-based tour-production company that handles shows for bands such as Haim and Bastille, estimates that on a typical, arena-size tour, the average wage for crew members is around $450 a day. Entry-level crew members can earn around $200 to $275, Mr. Rowe says, though with experience, that can climb to as high as $1,500 a day.

Concert workers today are more likely to be foodies than junkies, says T.J. Hoffmann, a onetime roadie for Agnostic Front and Skid Row. He is making a documentary about “America’s last blue-collar army,” as he calls his colleagues. Crew members on a European tour don’t spend their days off “drinking and doing drugs,” the 45-year-old Mr. Hoffmann says. “They’re going to the Louvre.”

Harley Zinker, who just wrapped up work on three Interpol concerts in Mexico, says, “I don’t think we drink or do nearly as many drugs as people in finance do.” He started working two decades ago in New York City clubs. Nowadays, Mr. Zinker, 45, handles sound for performances by the Killers, the Strokes and others. He earns enough to take six weeks off between tours and put a chunk of money away for retirement. “It’s a very viable career,” Mr. Zinker says.

Longtime roadie Harley Zinker got his start working sound in New York City clubs like Brownies two decades ago. Now his resumé includes the Strokes and the Killers.

Mr. Zinker is what’s known as a ‘front-of-house’ engineer. While pay depends on the person—their experience, what bands they work for, how big the shows are—some ‘front-of-house’ engineers can make upwards of $120,000 a year, according to the Berklee College of Music.

It’s the job of Mr. Zinker to finalize the position of the band’s drum microphones.

As the band does a sound check, a local stage hand works on video projectors while Mark Powell, bottom right, adjusts lights and Harley Zinker, top left, adjusts sound.

There are more women roadies than in the 1970s and 1980s. Christina Moon, Interpol’s monitor engineer, is in charge of the sound that band members hear in their in-ear monitors during a performance. Ms. Moon, 40, also works for Death Cab for Cutie, Cat Power and Yeah Yeah Yeahs.

Perhaps the most visible roadies for audience members are instrument techs, since they sometimes briefly appear on stage. Here, Shawn Lobb tunes guitars ahead of the March 10 show.

Interpol performs. The band’s lighting is handled by production designer Mark Powell, who favors ’moody side and back light’ and ‘heavily-saturated monochromatic color palettes,’ he says.

Roadies and local workers begin the process of setting up the stage — lights, sound, video, instruments — for an Interpol concert at Auditorio Banamex in Monterrey, Mexico, on March 10.

Roadies and local workers begin the process of setting up the stage — lights, sound, video, instruments — for an Interpol concert at Auditorio Banamex in Monterrey, Mexico, on March 10. Adam Wiseman for The Wall Street Journal

Two local stage hands position a sound-mixing console for the opening band. Adam Wiseman for The Wall Street Journal

Longtime roadie Harley Zinker got his start working sound in New York City clubs like Brownies two decades ago. Now his resumé includes the Strokes and the Killers. Adam Wiseman for The Wall Street Journal

Mr. Zinker is what’s known as a ‘front-of-house’ engineer. While pay depends on the person—their experience, what bands they work for, how big the shows are—some ‘front-of-house’ engineers can make upwards of $120,000 a year, according to the Berklee College of Music. Adam Wiseman for The Wall Street Journal

It’s the job of Mr. Zinker to finalize the position of the band’s drum microphones. Adam Wiseman for The Wall Street Journal

As the band does a sound check, a local stage hand works on video projectors while Mark Powell, bottom right, adjusts lights and Harley Zinker, top left, adjusts sound. Adam Wiseman for The Wall Street Journal

There are more women roadies than in the 1970s and 1980s. Christina Moon, Interpol’s monitor engineer, is in charge of the sound that band members hear in their in-ear monitors during a performance. Ms. Moon, 40, also works for Death Cab for Cutie, Cat Power and Yeah Yeah Yeahs. Adam Wiseman for The Wall Street Journal

Perhaps the most visible roadies for audience members are instrument techs, since they sometimes briefly appear on stage. Here, Shawn Lobb tunes guitars ahead of the March 10 show. Adam Wiseman for The Wall Street Journal

Interpol performs. The band’s lighting is handled by production designer Mark Powell, who favors ’moody side and back light’ and ‘heavily-saturated monochromatic color palettes,’ he says. Adam Wiseman for The Wall Street Journal
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Like many freelance or “gig economy” workers, less-experienced concert techs have little bargaining power over pay. Employers—sometimes musical acts, but more often production companies—hold the cards when negotiating contracts.

Wages tend to rise only when a roadie jumps to the next level by getting on a bigger tour, says Adam Zendel, a doctoral student at the University of Toronto who is writing his dissertation on roadies’ working conditions.

Few roadie jobs require formal credentials, so candidates with limited skills or experience can apply. That translates into a wide potential labor pool, he says, holding down wages for newcomers or roadies with scant experience.

Mr. Zendel, 28, paid his way through college in Canada by working as a freelance sound technician for shows by artists such as electronic-music star Skrillex and the metal band Cannibal Corpse. He was paid $300 a day working gigs for 100 fans or 10,000, he says, and after a while, he burned out.

But once a roadie gains a foothold in the industry and establishes a network, one gig often leads to another. Moving up to bigger tours from smaller ones is commonplace, concert workers say. And roadies routinely refer friends to potential employers when they can’t take gigs themselves. “It’s very incestuous,” Mr. Zinker says. On Crewspace, an invitation-only website, roadies land jobs, swap tips and share war stories.

After years on tour, some roadies take part-time jobs in construction or special-events production to smooth out their work schedule and travel less.

Mr. Davis, the stage manager for Hank Williams Jr., makes a little more than half his annual salary working for LogiCom, an entertainment and event-production company based in Nashville, Tenn. All told, Mr. Davis, who is 53 and lives in Alabama, brings home almost six figures a year. “It’s very good money,” he says.

In recent months, Mr. Weber, the guitar tech, has been on the road with Lyle Lovett, who tours with just two acoustics—simplifying Mr. Weber’s job. By evening’s end, if everything goes as planned, no one even notices what Mr. Weber has done.

But that doesn’t mean Mr. Weber leaves anything to chance. He restrings backup guitars, always has a contingency plan and maintains a professional demeanor.

When handing a guitar to Mr. Lovett, he says, it’s “Good evening, sir,” not “Hey, dude.”

How to Become a Roadie »

Eager for a behind-the-scenes view of concerts—over and over? If wanderlust strikes and backstage beckons, here’s some advice for breaking into life on the road. Although many roadies credit their careers to luck and serendipity, today there are a number of instruction options.

Christina Moon is in charge of the sound that band members hear in their earpieces during performances. She earned a music degree and worked in clubs before heading out on tour. Ms. Moon has worked for artists including the Yeah Yeah Yeahs, Death Cab for Cutie and Cat Power.

For newcomers, schools such as Full Sail University in Orlando, Fla., offer sound-production courses. Alabama resident Nick Bryant, who plays drums and wants to be a drum technician, starts classes at Full Sail in August.

For the moment, Mr. Bryant, 20, is working at Zaxby’s, a fast-casual chain restaurant. Much of his family has worked in nearby chicken-processing plants. Going to Full Sail will mean taking on debt, Mr. Bryant says, but after seeing his parents struggle in their jobs, he wants something different. “I want to be happy doing what I’m doing, no matter how much money I’m making,” he says.

Glen Rowe of the U.K.’s Cato Music Ltd. launched a training course last year in London—perhaps the world’s first “roadie school.” He wants to open locations in Los Angeles, Nashville and New York. Roughly half of Cato’s students—who each pay about $2,500 for the 11-week course—have been women.

Mollie MacGregor, a 20-year-old from Cardiff, Wales, took Cato’s course last year. In a guitar-maintenance workshop, Ms. MacGregor and 10 or so other students were put in pairs, given a guitar, tuner and strings, and taught how to tune and string guitars. Among the course’s written materials is a 12-page glossary of “roadie lingo” defining everything from “book of lies” (the tour itinerary) and “gig foot” (the condition of “having bits of tape stuck to your shoe”) to “Ohm’s law” (the “relationship between voltage, current and resistance”).

As in many fields, experience and contacts are critical to getting more concert work—and higher pay. Roadies must network constantly to snag jobs and fellow workers are often the best source of new gigs.

Sales of Streaming Music Top CDs in Flat Year for Industry

March 20, 2015

BEN SISARIO NYTimes.com 3/18/15

The American market for recorded music was flat in 2014, but income from streaming services like Spotify and Pandora has quickly grown to become a major part of the business, eclipsing CD sales for the first time, according to a report released Wednesday by the Recording Industry Association of America.

The association, a trade group that represents the major record companies, said that recorded music generated $6.97 billion in 2014, down less than 0.5 percent from the year before, when revenue was slightly more than $7 billion.

Overall revenue from recorded music, after falling from a high of $14.6 billion in 1999 — when CDs were the dominant format — has remained relatively stable for the last several years, hovering around $7 billion, according to the recording industry association. But within that total, the sources of income have changed significantly as consumers have increasingly shifted their purchasing habits online

In 2010, for example, when 253 million CDs were sold, sales of physical formats, like CDs and vinyl LPs, made up about 52 percent of total music revenue; downloads represented 32 percent, and streaming about 6.6 percent. (Ringtones and other miscellaneous income made up the rest.) By last year, the number of CDs sold had fallen to 144 million, and the split between formats was evening out: Physical formats were 32 percent of revenue, digital downloads 37 percent and streaming 27 percent.

The finer details of the industry association’s report, which is compiled from data supplied by the record companies, show how quickly the shifts are happening. In 2014, downloads of singles and albums generated about $2.6 billion, down 8.5 percent from the year before. CD sales were down 12.6 percent to $1.85 billion. (Vinyl records, a growing niche, were worth $321 million, up 50 percent.)

In aggregate, the various kinds of streaming outlets generated $1.87 billion, up nearly 29 percent from the year before — and, for the first time, slightly more than the total for CDs. That figure includes not only paid subscription outlets like Spotify, Rdio and Rhapsody, but also Internet radio services like Pandora, which does not let users pick exactly what songs they will hear, and outlets like YouTube and Spotify’s free tier, which let users pick specific songs and are generally supported by advertising.

Industry Issues Intrude in ‘Blurred Lines’ Case

March 3, 2015

BEN SISARIO NYTimes.com 03/01/15

Before a special audience in Los Angeles last week, the velvet-voiced pop singer Robin Thicke performed his 2013 hit “Blurred Lines,” ran through a medley at the piano and discussed artistic inspiration.

Mr. Thicke’s stage was not an arena or a nightclub, but rather a federal courtroom where he is part of a lawsuit over copyright infringement that has gripped the music industry and revived perennial questions about when a song crosses the line from homage to outright plagiarism.

The case, which continues this week, pits Mr. Thicke and his two credited co-writers of “Blurred Lines,” Pharrell Williams and the rapper T.I., against the family of Marvin Gaye. The family accuses Mr. Thicke and his colleagues of using distinct musical elements of Gaye’s 1977 hit “Got to Give It Up” without permission.

Copyright cases can be esoteric affairs. But the “Blurred Lines” trial, which began Tuesday before Judge John A. Kronstadt in United States District Court for the Central District of California, has provided a rare window into an unseemly and embarrassing side of the music industry. Testimony and a flurry of pretrial documents have revealed lurid details of drugs, unearned songwriting credits, and intentional deception of the news media employed as a standard promotional practice.

Mr. Thicke has been the most affected by the revelations, many of which he has made himself. On Wednesday, he testified that despite his official credit, he did not write “Blurred Lines,” an upbeat tune that dominated pop radio in the summer of 2013. Instead, Mr. Thicke said, the song was largely written by Mr. Williams.

“The biggest hit of my career was written by somebody else, and I was jealous and wanted credit,” Mr. Thicke testified, according to news reports. “I felt it was a little white lie that didn’t hurt his career but boosted mine.”

Mr. Williams, who was present in court at the beginning of the trial and is expected to testify this week, has acknowledged the issue of incorrect credit with a shrug. “This is what happens every day in our industry,” he said in an earlier deposition in the case.

Lawyers for both sides declined to comment while the case was in progress.

The lawsuit has drawn attention not only for the fame of the parties involved but also because of what legal experts said was the relative rarity of an infringement case that goes to trial. Accusations of plagiarism are common, these experts said, but are often settled quietly to avoid embarrassment and further expenses.

“There is an old saying in the music business,” said Kenneth J. Abdo, a music lawyer who is not involved in the “Blurred Lines” case, “that if you get a hit, you will get a writ.”

Another recent case involved Sam Smith’s song “Stay With Me,” a global smash that won two Grammy Awards. After being approached by representatives of Tom Petty, Mr. Smith’s publishers quickly admitted that parts of “Stay With Me” were uncomfortably similar to Mr. Petty’s 1989 hit “I Won’t Back Down,” and gave credit — and royalties — to Mr. Petty and his co-writer, Jeff Lynne.
In a sign of how sensitive a plagiarism charge can be for musicians, even those victimized, Mr. Petty sounded almost apologetic after news of the settlement emerged. “All my years of songwriting have shown me that these things can happen,” he said in a statement.

The “Blurred Lines” affair represents a different extreme. In August 2013, Mr. Thicke and his fellow writers filed a pre-emptive suit against the Gaye family, seeking a judgment in their favor as protection against infringement claims that they said had been made privately. In response, Nona and Frankie Gaye, two of Marvin Gaye’s children, quickly countersued. (Marvin Gaye died in 1984.)

Janis Gaye, the mother of Nona and Frankie, testified last week that the family had at first been delighted with “Blurred Lines,” hoping that it could breathe new life into “Got to Give It Up.” Then they learned that Gaye’s song had never been licensed by the “Blurred Lines” songwriters, and they cried foul.

Rulings by Judge Kronstadt have limited the scope of the case to the sheet-music versions of both songs — meaning that any infringement must be decided only on the basis of chords, melodies and lyrics, not on the sound of the songs’ commercial recordings. As part of his testimony, Mr. Thicke performed “Blurred Lines” at a keyboard as well as bits of songs by U2, the Beatles, Michael Jackson and others, as a demonstration of how easily one song can be made to resemble others.

Still, during testimony by record executives and music experts, the jury — five women and three men, from various ethnic backgrounds — heard fragments of both “Blurred Lines” and “Got to Give It Up” in various combinations, leading to some confusion about musical terminology. At one point on Friday, the judge read a question from a juror: “Is there only one way to write a chord?”

If Mr. Thicke’s side loses, the potential damages could be large. “Blurred Lines” has sold 7.3 million copies in the United States, and Richard S. Busch, the Gaye family’s lawyer, claimed in his opening statement that the song had earned at least $30 million in profit — a figure Mr. Thicke’s lawyers disputed. If Mr. Thicke’s side is found liable of infringement, then the jury would decide what percentage of the song’s profits should be shared with the Gayes as damages.

In one prominent case in the 1990s, Michael Bolton and Sony lost an infringement suit brought by the Isley Brothers, and were ordered to pay $5.4 million.

The “Blurred Lines” case has stirred debate in the music world about what constitutes a fair amount of borrowing, particularly when it comes to atmospheric and textural elements that may be common in many songs.

“Even if they didn’t sample Gaye directly, it’s so similar that you could have predicted that this would happen,” said Sway Calloway, the MTV News personality. “The irony is that it’s supposed to be an homage. But you still have to follow the rules. If you’re going to take from someone else’s creation, then you may have to pay the piper.”

2014 Summary

February 22, 2015

Top Music of 2014 - Infographic
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43 things that scare a major record company in 2015

February 13, 2015

Tim Ingham http://www.musicbusinessworldwide.com 2/12/15

It’s tough running a major music company today. For starters, you’re reliant on off-the-wall creative types to help you hit your ever-stricter targets.

Then there’s piracy, cost-cutting and that big question mark over whether streaming, in reality, can ever really take this industry back to the promised land.

In fact, you might not realise just how many fears play on the mind of a major label boss every single day.

So we’re here to tell you. It’s 43.

Earlier today, Warner Music Group announced its fiscal results for the last quarter of 2014, recording Q1 net losses of $41m against a 1.7% revenue jump to $829m.

Buried within the company’s investor information lay something rather revealing about its biggest fears for the future: a list of what it deems its ‘risks, uncertainties and other important factors’.

This is the stuff that Warner warns, at any moment, could derail its hopes of hitting its financial forecasts.

Non-fiscal types might find some chuckle-worthy language in there: “Our indebtedness levels, and the fact that we may be able to incur substantially more indebtedness which may increase the risks created by our substantial indebtedness.”

But that doesn’t mean that many of the points below aren’t salient for any big music company in this day and age.

Don’t have nightmares.
1.The continued decline in the global recorded music industry and the rate of overall decline in the music industry;
2.Downward pressure on our pricing and our profit margins and reductions in shelf space;
3.Our ability to identify, sign and retain artists and songwriters and the existence or absence of superstar releases;
4.Threats to our business associated with home copying and digital downloading;
5.The significant threat posed to our business and the music industry by organized industrial piracy;
6.The popular demand for particular recording artists and/or songwriters and albums and the timely completion of albums by major recording artists and/or songwriters;
7.The diversity and quality of our portfolio of songwriters;
8.The diversity and quality of our album releases;
9.The impact of legitimate channels for digital distribution of our creative content;
10.Our dependence on a limited number of digital music services, in particular Apple’s iTunes Music Store, for the online sale of our music recordings and their ability to significantly influence the pricing structure for online music stores;
11.Our involvement in intellectual property litigation;
12.Our ability to continue to enforce our intellectual property rights in digital environments;
13.The ability to develop a successful business model applicable to a digital environment and to enter into artist services and expanded-rights deals with recording artists in order to broaden our revenue streams in growing segments of the music business;
14.The impact of heightened and intensive competition in the recorded music and music publishing businesses and our inability to execute our business strategy;
15.Failure to realize expected cost savings and other synergies and benefits contemplated by the PLG Acquisition;
16.Risks associated with our non-U.S. operations, including limited legal protections of our intellectual property rights and restrictions on the repatriation of capital;
17.Significant fluctuations in our operations and cash flows from period to period;
18.Our inability to compete successfully in the highly competitive markets in which we operate;
19.Trends, developments or other events in some foreign countries in which we operate;
20.Local economic conditions in the countries in which we operate;
21.Our failure to attract and retain our executive officers and other key personnel;
22.The impact of rate regulations on our Recorded Music and Music Publishing businesses;
23.The impact of rates on other income streams that may be set by arbitration proceedings on our business;
24.An impairment in the carrying value of goodwill or other intangible and long-lived assets;
25.Unfavorable currency exchange rate fluctuations;
26.Our failure to have full control and ability to direct the operations we conduct through joint ventures;
27.Legislation limiting the terms by which an individual can be bound under a “personal services” contract;
28.A potential loss of catalog if it is determined that recording artists have a right to recapture rights in their recordings under the U.S. Copyright Act;
29.Trends that affect the end uses of our musical compositions (which include uses in broadcast radio and television, film and advertising businesses);
30.The growth of other products that compete for the disposable income of consumers;
31.The impact of, and risks inherent in, acquisitions or business combinations;
32.Risks inherent to our outsourcing of IT infrastructure and certain finance and accounting functions;
33.Our ability to maintain the security of information relating to our customers, employees and vendors and our music-based content;
34.The fact that we have engaged in substantial restructuring activities in the past, and may need to implement further restructurings in the future and our restructuring efforts may not be successful or generate expected cost-savings;
35.The impact of our substantial leverage on our ability to raise additional capital to fund our operations, on our ability to react to changes in the economy or our industry and on our ability to meet our obligations under our indebtedness;
36.The ability to generate sufficient cash to service all of our indebtedness, and the risk that we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful;
37.The fact that our debt agreements contain restrictions that limit our flexibility in operating our business;
38.Our indebtedness levels, and the fact that we may be able to incur substantially more indebtedness which may increase the risks created by our substantial indebtedness;
39.The significant amount of cash required to service our indebtedness and the ability to generate cash or refinance indebtedness as it becomes due depends on many factors, some of which are beyond our control;
40.Risks of downgrade, suspension or withdrawal of the rating assigned by a rating agency to us could impact our cost of capital;
41.Risks relating to Access [Industries], which indirectly owns all of our outstanding capital stock, and controls our company and may have conflicts of interest with the holders of our debt or us in the future. Access may also enter into, or cause us to enter into, strategic transactions that could change the nature or structure of our business, capital structure or credit profile;
42.Our reliance on one company as the primary supplier for the manufacturing, packaging and physical distribution of our products in the United States and Canada and part of Europe;
43.Risks related to evolving regulations concerning data privacy which might result in increased regulation and different industry standards

A history of hustling gives hip hop its entrepreneurial edge

February 4, 2015

Dan Charnas http://www.ft.com 2/03/15
Rappers’ facility with commerce can teach us about the value of human capital, writes Dan Charnas

Back in 2007 it seemed that rappers had peaked as entrepreneurs. In that year, Jay-Z sold his clothing company, Rocawear, for more than $200m and 50 Cent had a reported $40m personal stake in the $4bn sale of Glacéau, makers of Vitaminwater, to Coca-Cola. But in the past year we have seen bigger and important milestones. In May 2014 Dr Dre sold Beats Electronics to Apple for $3bn. And a few days ago Jay-Z offered $56m for Aspiro, a Swedish music streaming company.

The cliché of the music business is that of the exploited artist. The legendary figures of jazz, R&B, rock and soul often seemed to be on the wrong end of the deal. So why is it that hip hop artists seem to have such facility with commerce, even when many of their contemporaries in other genres still do not?

The answer lies in hip hop’s DNA. The artists developed a sense of entrepreneurship because they had to. Hardly anyone wanted to do business with hip hop. The first rap records were released into the most hostile environment for black music since the 1950s. In the midst of the early 1980s backlash against disco, big music companies viewed rap as an even less palatable offshoot. And so for half a decade independent operators built a scene on their own — until Rick Rubin and Russell Simmons signed a distribution deal for their indie label Def Jam with CBS Records in 1985, when the major could no longer ignore the beats in the streets.

A closed market is also a captive market. Hip hop built a wholly separate and lucrative ecosystem with its own institutions, tastemakers and power brokers. When clothing companies rebuffed rappers’ attentions and balked at endorsement deals, artists started their own brands. By the time the biggest corporations woke up in the 1990s it was too late; they simply did not have the knowledge or credibility in the market. Most often, they did deals with established or budding entrepreneurs such as Sean “Diddy” Combs.

Combs was reviled in some corners of the hip hop world as a crass profiteer. But he was only the latest in a line of hustlers who went back to the beginning of the culture. They were the early club promoters, tape and record slingers, and artist managers whose class and race often limited their options for advancement and focused them, laser-like, on hip hop. These were folks for whom the separation of art and commerce was an artificial, unaffordable and frivolous bourgeois conceit.

Over the decades hip hop spawned a paradoxical consciousness that allowed it to be hypercapitalist and the voice of the underclass at the same time. Add to that the success and global adaptability of the culture — which provides its entrepreneurs with not only enormous influence but also an ideal focus group — and you will understand why rappers make better businesspeople than indie rockers.

Now that the corporate world has largely opened its doors to hip hop, the entrepreneurial impulse that arose from necessity has dwindled somewhat among younger artists. Superficially, this decline seems to be part of the normal life cycle of untapped cultural markets, the side effect of corporatisation.

But the real lesson of hip hop is what it can teach us about the value of human capital. Many of the great hip hop entrepreneurs were kids who had been given the worst of everything: housing, schools and expectations. When they became successful, we were surprised. We still are, obviously. Why? Hip hop, after all, has been calmly telling us where the gold is for about four decades. And it is not the music, not the products. The untapped treasure is what it always was. It is that smart kid you never saw coming.

The writer is author of ‘The Big Payback: The History of the Business of Hip-Hop,’ and an associate professor at New York University

Apple makes more money every 3 weeks than the entire recorded music industry does in a year

January 30, 2015

Tim Ingham http://www.musicbusinessworldwide.com 1/29/15

As the world comes to terms with Apple posting the biggest quarterly profits in Wall Street’s history, it’s surely worth asking this question: just how much bigger is the iPhone giant than companies which the music industry considers ‘major’?

First, though, let’s explain that headline. Apple turned over US $75bn in its fiscal Q1, in the three months to December 27, 2014.

[Just take a moment to digest that. $75bn. That’s roughly the annual GDP of Jamaica, Iceland and Slovenia combined.]

Back to business… that gives Apple a mean average monthly turnover of $25bn.

According to the IFPI, the entire global recorded music business generated $15bn in 2013 – the last year we currently have on record.

In other words, Apple is making more money every three weeks than Universal Music, Sony Music, Warner Music, Beggars etc. combined manage to generate each year.

Let’s take a look at how Apple’s latest quarter stacks up against music’s biggest companies.

Universal Music group

Universal Music Group’s latest public quarterly results came in parent Vivendi’s Q3.

The French conglomerate reported the numbers by covering the nine months to the end of September 2014.

UMG – which owns Universal Music and Universal Music Publishing – posted revenues of €3.01bn, or $3.4bn, in the nine-month period, which averages out at a clean €1bn ($1.1bn) per quarter.

That means Apple’s turnover – wait for it – is around 75 TIMES that of recorded music’s biggest company.

It’s fair to note that because Apple’s results are hot off the press, they’re for the busiest consumer period of the year – the three months before Christmas – while Vivendi’s latest results cover quieter spring/summer/autumn months.

But as a rough guide, it certainly paints a telling picture. (Universal’s revenues in the whole of 2013 were €4.9bn, so its quarterly average income is slightly higher at around €1.2bn.)

In terms of net profits, I hope you’re sitting comfortably.

Vivendi posted a €442m net income in the first nine months of its latest fiscal year. That works out at around €147m ($166m) each quarter.

Apple notoriously posted a ginormous $18bn net profit for its Q1 this week, making its take-home quarterly income 108 times as big as the Universal parent’s average in 2014 so far.

One hundred. And eight. Times.

SONY MUSIC entertainment

We’re used to writing ‘Japanese technology giant’ or ‘Japanese entertainment giant’ when referring to Sony.

But, in reality, Apple now makes it look pretty weeny.

Let’s first look specifically at Sony Music. According to Sony Corp’s Q2 fiscal results for the three months to the end of September, 2014, Sony Music Entertainment – including Sony’s record company and its share of the world’s biggest music publisher, Sony/ATV – turned over $1.07bn in the quarter.

Handily, that’s basically the same as Universal.

Looking at Sony Corp as an entire entity – PlayStation, mobile phones, music, TVs and all – it turned over an impressive $17.5bn in its Q2.

Impressive, that is, until you realise that’s a tenth of the size of Apple’s revenues in its latest quarter.

Some ‘giant’…

And let’s have a look at the balance sheet. Apple, remember, posted that whopping $18bn net profit in its Q1.

In Sony’s Q2? A $1.24bn loss.

Ouch.

WARNER MUSIC GROUP

Warner Music Group is technically a private company, owned by Len Blavatnik’s Access Industries – who bought it in 2011 for $3.3bn.

But it still reports its quarterly figures publicly, giving us an insight into its fiscal health.

In its latest public quarter – its Q4, the three months to end of September 2014 – WMG turned over $771m.

That makes its quarterly revenue slightly smaller than both UMG and Sony Music Entertainment. And a LOT smaller than Apple’s record-breaking Q1.

97 times smaller, in fact.

As for profit/loss, Warner posted a net loss of $24m in its Q4 2014 (narrowed compared to Q4 2013’s $57m).

That might sound like loose change to Apple, but it still makes Warner’s latest balance sheet $18.02bn behind the Cupertino company’s.

Live Nation

Ah, we hear you say. But that’s all records and publishing. Everyone knows they’ve been hurting for more than a decade.

Live music. That’s what will give Apple a hiding. That’s where the big money is.

Well, yes, it is true that in Live Nation’s latest quarter – its Q3, in the three months to end of September 2014 – it did turn over more than double that of any major label group, with $2.5bn on its books.

Even relatively speaking, that hardly cuts Apple down to size.

The iPhone company’s quarterly revenue is still 30 times as big as Live Nation’s.

As for what’s left after expenses, Live Nation’s net profit in its Q3 stood at a healthy-sounding $115.8m.

We don’t need to tell you how far behind Apple that is.

How far behind Apple everybody is.

Why CDs May Actually Sound Better Than Vinyl

January 28, 2015

Chris Kornelis http://www.laweekly.com 1/27/15

James Russell’s mother told him that his first invention was the “automated battleship” he built when he was 6. By the time he was 13, he was fixing toasters, irons and fans at a local appliance store in his hometown outside Seattle. The summer before he left for college, he was hired to set up a radio station — transmitter and all — something he’d never done before. He’d never even seen an antenna that big.

“That’s why I am an inventor,” says Russell, now 83. “I can envision how it should be.”

At Portland’s Reed College, Russell studied physics and built his first turntable. Unsatisfied with the standard needles of the day, he used cactus needles, which he sharpened with sandpaper, to play the first LP he purchased: Nikolai Rimsky-Korsakov’s Scheherazade. Even so, with his sharp ears, he could hear the quality of his LPs disintegrate after the 10th or 12th spin.

After he graduated in 1953, Russell took a job in the research laboratories at Washington state’s Hanford Works, the nuclear reservation that produced the plutonium used in the atomic bomb dropped on Nagasaki. Longtime classical music fans, Russell and his wife, Barbara, were subscribers to the Seattle Opera, even though it meant a 400-mile drive round-trip for each performance.

He worked on projects tangentially related to nuclear reactors for several years, then convinced his superiors to let him research ways in which optics — the use of light — could be used to improve the recording and reproduction of music.

Russell wasn’t trying to make recorded music more convenient or portable. He was trying to make it more accurate, a clearer reflection of the performance. “I wanted the symphony to sound like the symphony,” he says.

On a Saturday morning in 1965, Barbara took the kids to buy shoes. Home alone, free to think about his problem, Russell figured out how to bring optics, digital technology and other disciplines together to create the digital optical storage and playback technology that would be used in what is now known as the compact disc.

The CD revolutionized the music industry, but it was never cool. Even as CD sales eclipsed and nearly exterminated vinyl, the format was plagued by accusations that its sound was inferior, that it was merely a convenient alternative to the LP.

As consumers flocked to the convenience and ubiquity of downloadable and streaming music, they unsentimentally abandoned their CD collections. But as CD sales have plummeted, vinyl’s sales figures have been moving in the other direction. The CD-versus-vinyl debate — and, by extension, the debate over digital versus analog sound — has only grown.

By 2014, vinyl’s resurgence as a marketable product and fetish property appeared to be hastening the CD’s obsolescence. While CD album sales in the United States had dropped by 80 percent since their 2001 peak, LP sales hit 9.2 million, up 52 percent from 2013 and nearly 800 percent since 2004. Jack White’s Lazaretto moved 86,700 LPs, the most units in a calendar year since Nielsen SoundScan started keeping track in 1991.

Even purely digital music is now marketed using the trappings of vinyl. When U2 distributed 500 million digital copies of its new album to iTunes users — a reach unimaginable when the band released its debut in 1980 — the artwork depicted a vinyl record inside a sleeve with the initials “LP” scribbled on the exterior. And when Neil Young launched a Kickstarter campaign for PonoMusic, a digital music player and online store, his company’s stated mission was to “re-create the vinyl experience in the digital realm.”

Baked into the vinyl resurgence is the suggestion — fed by analog apostles such as Young and White — that an LP’s analog playback produces honest, authentic sound, while digital formats like the CD compromise quality for the sake of portability and convenience. Young articulated this sentiment earlier this month at the International Consumer Electronics Show in Las Vegas, where he told Rolling Stone’s Nathan Brackett that the vinyl resurgence is due to the fact that “[vinyl is] the only place people can go where they can really hear.”

Fathers of the compact disc — and many audio engineers who make a living reproducing what transpires in the recording studio — bristle at this notion.

“As long as you can measure the difference, the CD will be better than the vinyl, absolutely,” says Kees A. Schouhamer Immink, a former Philips engineer in the Netherlands, who was a member of the Sony/Philips task force that created the compact disc standards. “But if you say the whole experience — just like smoking cigars with friends — [is better], well, do it. Enjoy smoking cigars with friends, and drink beer and brandy and enjoy listening to an old-fashioned record player. But don’t say the sound is better.

“You may say it sounds better to you. That’s OK. That’s a subjective matter.”

In 1968, a 23-year-old audio engineer named Bob Ludwig at New York’s A&R Recording was asked to create a test pressing of The Band’s debut, Music From Big Pink, so that the producers could hear what it would sound like on LP. During the process, he especially tried to preserve as much as possible of the deep low end of the band’s sound, which he believed was critical to its music.

But when he heard the final LP that was released, he was stunned. “All the low, extreme low bass that I knew was there, was chopped right off.”

Years later, when Ludwig was hired to provide the final edit (known as mastering) for a greatest-hits package for The Band, he got the album’s master tapes back from Capitol Records. On the box was a note from the cutting engineer who’d made the original vinyl master, saying the album’s extreme low end had to be cut out.

Of vinyl’s inherent deficiencies, reproducing bass is one of its most glaring. The other is that the last track on each side of a record sounds worse than the first, due to the fact that the player’s stylus covers fewer inches of grooves per second as it gets closer to the center.

“The vinyl disc is a steadily collapsing medium,” says Ludwig, who went on to become a Grammy-winning mastering engineer, with credits on Patti Smith’s Horses, Steely Dan’s Gaucho and White’s Lazaretto, among many others. “The closer it gets to the label, the more the information is getting compromised, the high frequencies getting lost.”

Ludwig’s colleague Bob Clearmountain is one of the industry’s most respected mixing engineers, responsible for setting the levels of a band’s performance before it’s sent to the mastering engineer. He has worked with everyone from The Rolling Stones and David Bowie to Ricky Martin and Lenny Kravitz.

When Clearmountain mixed vinyl albums for Columbia Records, he says the label required the test pressing of each LP to play on an old, cheap turntable without skipping, or it would have to be mixed again. Too much bass in one speaker could make the needle skip out of the groove, as would too much sibilance — a harsh “s” — in a singer’s voice.

Clearmountain, who now works out of Mix This! in Pacific Palisades, says that when he heard the vinyl test pressings of the albums he’d worked on in the studio, he always felt the same way: depressed.

“I’d just listen and go: ‘Jesus, after all that work, that’s all I get?’ It was sort of a percentage of what we did in the studio,” he says. “All that work and trying to make everything sound so good, and the vinyl just wasn’t as good.”

Not only did records provide only a sliver of what he’d done in the studio but they also came with plenty of sounds that hadn’t been there in the first place: ticks and pops.

“If you’re a musician like Bob and I,” Ludwig says, “and you get to do a mix and you listen to it and you love the way it sounds, and then it’s transferred to vinyl and suddenly it’s got noise and ticks and pops, for me that’s an extremely unmusical event.”

Unlike Russell, not all of the engineers and scientists whose inventions and developments laid the groundwork for the CD were motivated by the quest for clearer sound. Richard Wilkinson was searching for a better picture.

At MCA Laboratories in Torrance, Wilkinson was charged with developing ways to record television programs and put them on master discs with a laser beam at a time when few commercially available lasers existed. It was an experimental project with slim hope of success. “The director of the lab told me there was no guarantee the job would last more than six months,” Wilkinson says.

But he and his colleagues succeeded. In partnership with Immink and his colleagues at Philips, Wilkinson’s team helped create the standards for what we now know as the laserdisc. Under an agreement between the two companies, Philips built the players and MCA manufactured the discs at a factory in Carson.

“If you really want to have problems between Dutch people and Americans, then you should do this kind of thing,” Immink says. “If a system didn’t work, who was to blame, the disc or the player? That was a huge problem.”

The bigger problem was that the public was not impressed. Philips’ first commercially available laserdisc player — the Magnavox 8000 — was introduced in 1978, but Immink estimates that after half a billion dollars in development resources, only a few hundred players were sold.

But the excursion was not a total loss. While Immink and his colleagues were developing the video disc, management asked them to pursue a sound-only disc as well.

Immink grew up saving his money to buy 45s by American artists such as Elvis Presley. But when his team started testing the digital audio disc, they used recordings of performances such as Mussorgsky’s Pictures at an Exhibition. Classical music could demonstrate the format’s superior dynamic range over the LP better than popular music, which has a comparably smaller range — the distance between soft passages of music and loud ones.

“From a record player, it’s impossible to have such a dynamic range,” Immink says. “You have to suppress the dynamic range, otherwise the grooves will touch or you [have reduced] playing time.”

In 1979, Immink was brought into a joint task force between Philips and Sony to develop standards for the compact disc. In 1982, the new format went on the market.

Two years later, the first CD was manufactured in the United States. Fittingly, it was Bruce Springsteen’s Born in the U.S.A., an album that was mixed by Bob Clearmountain and mastered by Bob Ludwig.

Hearing Born in the U.S.A. on CD didn’t make either man a digital advocate. Clearmountain and Ludwig say that early analog-to-digital converters had an industrial sound, which made CDs sound brittle. But when Apogee Electronics — a company co-founded by Clearmountain’s wife, Betty Bennett — developed the first high-quality converters in 1985, the sound came into focus.

“It wasn’t until CDs actually started to sound good [that I went]: ‘That’s what it sounded like. That’s what I remember doing in the studio,’ ” Clearmountain says. “The great thing for me about digital, about CDs, was that I could do things that I could never do for a vinyl record.”

Scott Metcalfe, director of recording arts and sciences at the Peabody Conservatory of Johns Hopkins University, says the move to CDs was especially beneficial for reproducing classical recordings.

“Really in every way measurable, the digital formats are going to exceed analog in dynamic range, meaning the distance between how loud and how soft,” he says. “In the classical world, [that means] getting really quiet music that isn’t obscured by the pops and clicks of vinyl or just the noise floor of the friction of the stylus against the [LP] itself.”

That said, every audio engineer L.A. Weekly spoke to said it’s not hard to find LPs that sound better than CDs. Mastering, production and manufacturing variables can drastically tilt the scale either way.

The seemingly endless possibilities of the CD also resulted in unexpected consequences.

“When the CD came, everybody discovered that they could do everything with the CD — or they believed they could do everything,” says Andres Mayo, president of the Audio Engineering Society. “So they started pushing and pushing and pushing the volume up and up and up, and that created a totally different sound.”

Even before the advent of the CD, there had been a “loudness war” in the music industry — the desire to make an album louder than its competitors, so it would catch the attention of listeners and radio programmers. But when CDs made it possible to increase the volume exponentially — no more skipping needles — nuance and dynamics often suffered.

Because vinyl’s restrictions do not permit the same abuse of audio levels as the CD, Mayo says that listeners might hear a wider dynamic range in an album mixed separately for vinyl over a compact disc version optimized for loudness — even though vinyl, as a format, has a narrower range than CD.

“It’s not just the format,” Mayo says. “It’s what you do with it.”

It is a fact that vinyl sounds different from CDs. And many people prefer vinyl’s sound. But it’s not clean reproduction of a recording that makes vinyl a preferred format; it’s the affect the vinyl adds to a recording that people find pleasing.

“I think some people interpret the lack of top end [on vinyl] and interpret an analog type of distortion as warmth,” says Jim Anderson, a Grammy-winning recording engineer and professor at New York University’s Clive Davis Institute of Recorded Music. “It’s a misinterpretation of it. But if they like it, they like it. That’s fine.”

It’s also clear that the vinyl experience is about more than just sound. Pete Lyman, co-owner and chief mastering technician at Infrasonic Sound, an audio and vinyl mastering studio in Echo Park, says he believes listeners are gravitating toward vinyl for the physical experience of owning, holding and flipping an LP.

“I don’t think that [sound is] really the appeal for people right now,” Lyman says. “They like the collectability factor. They like the whole ritual and process of listening to it. They’re more engaged with the music that way.”

Ben Blackwell, head of vinyl operations at Jack White’s Third Man Records in Nashville, says that he thinks some people prefer vinyl because it tells the world something about who they are. “It’s like the kid walking around with a copy of The Catcher in the Rye in his back pocket,” he says. “Does he really connect with it or does he think it’s making a statement?”

In the rush to get into the vinyl game, Lyman — who not only masters recordings but also cuts the master lacquer disc that is sent to the vinyl pressing plant — says a lot of corners are getting cut. In the 1960s and ’70s, when artists were recording specifically for vinyl, they recorded and mixed to fit the confines of the medium, he explains. They kept sides below 20 minutes, and put loud songs on the outside tracks and quiet ones toward the center to account for the natural deterioration of sound that occurs when the needle gets closer to the middle of the LP.

These days, Lyman says, vinyl is often the last thing artists and labels think about. Clients who employ Infrasonic’s services only for lacquer cutting often hand over albums that are optimized for digital downloads and CD but are too long for vinyl, with track sequencing that fails to account for the medium’s natural limitations.

To get an album longer than 40 minutes to fit onto one LP, Lyman says, high frequencies and bass are the first things that go. There’s also extra distortion because he has to cut the master lacquer at a lower volume to fit all that extra music onto the LP.

“As soon as you have to cut that record at a quieter volume, you’re going to hear more kicks and pops, you’re going to hear more surface noise,” he says, “because you’re going to have to turn your stereo up to accommodate the lower level on the disc.”

As labels seek to capitalize on a physical medium that is gaining momentum, some marketing efforts offering superior sound are downright misleading. Most notable among these is “audiophile-quality 180-gram vinyl,” which consumers assume is superior because it is heavier. Lyman, however, says the added weight offers no musical benefit at all.

“It increases shipping costs and sales cost of the record. That’s about it,” he says. “It’s the Super Big Gulp of vinyl, but you’re not getting more [sound quality], really, you’re just getting more vinyl.”

With PonoMusic, Neil Young is leading fans down the digital version of a similar “bigger is better” sonic trail.

It has long been believed that the human ear cannot hear frequencies above 22 kHz. This is why CDs sample sound at 44.1 kHz and 16 bits of information per sample. According to a theorem called Nyquist-Shannon, in order to reach a desired range, sound must be sampled at twice that range. Half of 44, obviously, is 22.

Pono — along with some other digital retailers such as HDtracks.com — sells some tracks that sample music as high as 192 kHz, with 24 bits per sample. Pono also offers a PonoPlayer (retail price: $399), which the company says is optimized to play those tracks.

Pedram Abrari, Pono’s executive vice president of technology and engineering, says the idea behind the player and the store is to sell and play back tracks at the rate at which artists record them. Since artists typically record at rates much higher than 44.1 kHz for editing purposes — such as 96 and 192 kHz — the company believes that offering recordings at their original rates drastically improves the sound.

This, however, is a matter of intense debate.

“There is no evidence that humans can perceive frequencies above 22 kHz,” says Dr. Daniel Levitin, a neuroscientist and author of the best-selling book This Is Your Brain on Music. “There is nothing in the auditory system or brain that processes sounds this high, as far as we know.”

In double-blind tests conducted by Levitin and others — some results of which were published in the Journal of the Audio Engineering Society — listeners cannot tell the difference between high-resolution audio and CD-quality audio.

But many audio professionals, including Bob Ludwig and NYU’s Jim Anderson, say they can hear an improvement over CD quality, and they prefer the higher frequencies and sample rates. Anderson even teaches a class at NYU in which he instructs students on how to listen for the differences.

“I think if people can’t hear it, they probably didn’t know what they were listening for,” Anderson says. “Someone has to say to you: Listen for this, listen for this, listen for this. And when you start to home in on those details, it starts to become very clear.”

Abrari says Pono doesn’t like to get into the science. And he says it’s not just about what a person can hear but what they feel.

But even if humans can hear or “feel” above 22 kHz, the experience of listening to high-resolution digital tracks is very different from listening to vinyl. If anything, it’s closer to that of the CD.

The ticks and pops are gone. There is no disc to ritually flip. The tracks sound closer to what the artist laid down in the studio, but that’s only because the distortion and limitations present in the vinyl pressing are no longer part of the experience.

It’s not as cheap an obsession, either. You can buy an armload of used LPs for the $21.79 it costs to buy a 192 kHz version of Young’s Harvest at the Pono store.

As he’s been pitching Pono, Young has continued to promote the idea that analog formats and recording gear offer the authentic sound, and digital is a compromise.

“I don’t think [Pono] can sound better than vinyl,” he said earlier this month at the Consumer Electronics Show. “Because vinyl is a reflection and any digital is a reconstitution; it’s not the same thing.”

Many audio engineers disagree. Scott Metcalfe, for example, says that recording to analog tape isn’t any purer than recording music digitally. But the distortion and pitch variation that analog tape adds to the recording are preferred by some artists and audiences.

“I think there are few people who would tell you that recording classical music to analog tape has any benefit at all,” Metcalfe says. But for some artists, he says — particularly in rock — those layers of distortion are preferable.

Ludwig says he mastered White’s Lazaretto on analog tape not because it’s a better way to master but because “it’s what [White] wanted.”

“For many world-class mixers,” Ludwig says, “mixing to analog tape has no advantages if what comes out of the console is exactly what you want.” However, for a less skilled mixing engineer, mixing to analog tape can “ ’glue’ the music together in the most wonderful way,” he says.

Whether it’s analog tape versus digital recordings, or vinyl versus CDs, objective quality is not the conversation: It’s about which one the artist and listener prefer.

“Every way you can measure it, digital is going to be superior,” Metcalfe says. “It really does come down to the preference of the end user.”

Or, as Kees Immink says: “Some people like marmalade and some people like mustard. If people like to listen to vinyl, do so, enjoy life. But don’t say that the sound is better.”


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