To DYI or not DYI. That is the question!

Yesterday at MusicHackDay, I was listening to the "Starting a Music Business" panel, and two topics ran in my head:

• DYI vs. centralized management service for artists: A discussion started about the value, and load that new 'DYI' tools provide for entertainers. Derek Sivers (whose truly an awesome dude) had a really great way of putting it: "DYI? great! and now there's this tool? oh great, and now 'more information'? oh boy...". He's spot-on, I think.
  We at Adva Mobile definitely see how artists check us out and some stay, some move on. There's just so many tools. That's why integrated serices like ArtistData are the right way to go, IMO.
  There's just way too many different offerings for artists right now, and consolidation of the really good ones is bound to happen, hopefully soon (Hopefully Adva Mobile will be one of them). The flip side, though, is that many artists who would never get heard or make any money (to make art) would never have been heard by anyone without those DYI tools. So definitely the DYI tools is not for those who aren't prepared to invest in the promotion bit to be successful, and it also depends on how big you are. Hopefully, those issues are handed over to a band manager of sorts when you grow big enough.
• The other topic in my head (that was not discussed) was triggered by the inevitable "Now's a great time to start a business in the music space". Sure, Duh. But seriously, without going pessimistic about it, what do you make of the recent iLike and iMeem fire sales? Or Spiral frog shutdown or Qtrax needing add'l $50MM? I mean, these are all players who've been alive for sometime and have been trying to figure "it" out. If iMeem is worth $1MM, I'm asking myself what are we worth? A Grand latte? 

Reblogged: Music as the ideal virtual good

This weekend I was fortunate to attend MusicHackDay organized at Microsoft NERD. I was even more fortunate to ask Nabeel Hyatt about recruiting talent in the music space who will help us geeks find that moonlight on the bridge between technology and entertainment. Anyway..
Nabeels' post "Music as the ideal virtual good" is one to pay attention to, whatever your involvement in the entertainment space is. His illustration of the "music business state of affairs", if you will. is excellent. I recommend walking through his deck. I think the point is, for the creative community as well as the technology, there is a place to make money. It just needs to be found in places it wasn't there before. For Nabeel, it's music inside social games:
"While virtual goods are usually confined to conversations about pixelated clothing and weapons, music is by far the highest grossing digital good. A look at what makes music sell as a virtual good."

My take? If you're an artist, think through your revenue stream. Some of it always will come from straight music sales, no doubt. But people today are much more about the live experience in shows followed by the memorabilia that comes with the experience (that's another way to name your CDs or T-shirt). Of course music creation is the driver for all of it, but on it's own, perhaps is not what's going to get you money.

Chart Courtesy: Nabeel Hyatt

Geeky wishes...

I wish...

• There was a free way to do mobile carrier lookup from a mobile number. That way I could enable people on mobile web pages to share their favorite sites with their friends in a rifle mode (the shotgun approach is easily supported via Twitter). It cost way too much to do a carrier lookup and then send the SMS. Operators should want this more than me, because when I'll send that SMS, I will pay to send it, and the receiver will pay ~$.10 to receive it.
• There was a way to find location on mobile web pages for all phone types, not restricted to whether those devices have GPS or not (cellid or wifi router mac address is better than nothing). OEMs should want this more than me, because it opens a sea of marketing opportunities for them.
• There was a simple, easy way to bill people off-deck, from an app or mobile web pages. The current on and off-deck billing solutions in the US are unusable. Every time I hear news from the UK about PayForIt I become green with envy. If there's such a successful model, why can't the US replicate it?! *everyone* in the mobile space should want this. This morning GoPayforit announced that it lets vendors set up a payment service for their site by inserting one line of code.

If I got any of the above wrong, feel free to educate me!

Can Freemium Content Model Survive?

Image Courtesy: HypebotFollowing last weeks' rumors about MySpace starting to charge for streaming and this weeks'MySpace-iMeem possible acquisition rumors, there's a lot of (repeating) talk about the business model of free content. Of particular interest is Wireds' post "Music: Too Expensive to Be Free, Too Free to Be Expensive".

Here's some of my thoughts, and what led me to start Adva Mobile

1. Licensing Music from the majors is a difficult financial commitment to recover. If you're small and nimble, prove your bus model with the long tail, or at least the smaller players before paying the huge upfront fees. Sure, you gain (if you're lucky) the major's marketing wind behind your back, but when the honeymoon is over, you start paying. Another Wired writer's comment is almost (but not) funny: "In the world of online music, you're nobody until somebody sues you"
2. "Advertising was supposed to be music’s magic bullet". Not. In all metrics, advertising payouts are dropping fast. Even on mobile, even when you can provide pretty accurate fan profiles, the payouts are way below your operating costs or licensing costs (if you have any).
3. "Fans don't pay/Expect free". Not (again). As Debbie Chachra explained in her insightful post, fans will pay for relationships with the artists they follow in a number of levels. From tickets, hard goods to funding artist recordings, fans will pay for the experience that comes with the music. You just need to find a way to leverage those.

What's interesting in the entertainment space is that there seem to be no big winners in the game. Big problems = Big opportunities. That's what I'm banking on, anyway.

Economy's turning?

Tough times these days. With Microsoft dropping 800 peeps, Nokia-Siemens dropping thousands etc. I have a sneaking suspicion that layoffs in the mobile location space are imminent, following Google's launch of the Android full featured free GPS app.

There's no good reason for rehashing all of that other than sharing my feelings about the recent one to bite the dust: Zeemote. To be honest, I was a bit cynical about the use case and liklihood for proliferation of their gadget. But, as we know, the gaming industry has gone places no-one has predicted. In any case, Zeemote was built by a true visionary, Beth Marcus. I cringe when I think of the people who put so much effort in, go home empty handed.


All those talking about the economy turning, and there's no better time like now to start something new, I'm not sure what you're smokin', it sure is great stuff!. Here's my advice to working people: if you have a day job, get some super-glue, and put a lot of it on your chair. And I mean, A LOT!

IODA gets iPhone app for artists from MixMatchMusic

Image Courtesy: MixMatchMusic

Congratulations to MixMatchmusic and Alan Khalfin for getting IODA on the bandwagon for their artist mobile promotional tool. IODA is a key player in the marketplace and their recognition that promotion on mobile is important, is great.
I found the quote from Adam Rabinovitz (IODA VP Marketing) interesting: "The MobBase iPhone app is an innovative and low-cost solution for independent artists who want to participate in the explosively popular iPhone app market".

We at Adva Mobile asked ourselves the question whether an iPhone app was the way to go initially, or Mobile Web. It was fan reach vs. hype. Admittedly, an iPhone app has far more hype than mobile web. From our little research, it seemed like artists wanted to reach all of their fans in the crowd, using simple and known tools like mobile web and SMS. We ended up deciding that resident iPhone, Android and blackberry app would come second.
The 2nd question I'm asking myself, reading the article, is the economics of providing artists a tailored app. We all know creating and deploying an app is not an insignificant effort. What kind of revenue artists need to make to pay $20+$15/month just for this app. (BTW, the iLike iPhone is not free). What's gonna happen in a year when Android is expected to come close to the iPhone reach? Are artists expected to pay another $15/month or more? An artist who can justify this expense is a household name. Selling out big venues, music and merch. Again, this is a dilemma we've been discussing at Adva Mobile. We ended up deciding that by charging artists that much, you essentially give up a huge chunk of the market. Our service is currently free, and maybe in the future we'll add some premium services.

Overall, I'm delighted to hear these news. It means more people add mobile to the promotion toolbox, and that's good for everyone!

Mobile Location is here (now for real)

In the last couple weeks I've been playing around with new mobile technology. This time, I came across this nice piece that enables marketers to learn their audience location as they view their mobile web pages.

Mobile location, it seems, has been the talk of the industry forever. Devices that don't come out with GPS chips installed seem to be the minority these days. Many applications have some form of mobile location awareness to them. Even Google has stormed in with Google Latitude, although the availability of that database for commercial purposes remains unclear. Has the real time location awareness made a dent in how marketers think of entering the mobile playground? questionable, I think.

One reason for not making a dent is that the effort associated in creating a mobile application is not insignificant. You need to consider coverage, features, maintenance etc. There's not an obvious easy entry point for marketers to test the ('mobile') water if the options are limited to mobile applications. If users' location were available on the mobile web, then with the development of a small portal, marketers can get huge reach instantly, and figure out the next step.

It seems that the technology is becoming available to create location-aware websites, and more specifically, location-aware mobile websites. I am hoping that this will really open a new path for marketers that wasn't available before, it is certainly an exciting opportunity for innovation!

New England Mobile Sector

As I read XConomy's post on the top 10 NE Venture deals of Q3'09, all I can do is remember that only this last Monday, at Mobile Monday, I was inside a room full of mobile entrepreneurs, money people, business people and what not, everyone saying: Mobile in Boston is reality, look around you.

Well, maybe we can argue that there are people working in the mobile space in NE, trying to make a difference and make miracles happen, but at the bottom line, money talks:
NE ventures are about science projects, or late-stage successful businesses. Numerous NE VCs are uncomfortable about investing in mobile, as are the early stage angels and independents. They need infrastructure, health, IP, enterprise. That works.

Maybe it's a way to ensure mobile businesses in NE are stronger (whatever that means) because there are fewer who can survive w/o funding. Or otherwise, if you want mobile, go west.

Monetization in Mobile

Image: TextMovers

Yesterday night's great Boston Mobile Monday had an interesting panel of speakers who were talking about Monetization in Mobile. The panel included a developer, carrier, OEM and a VC, perfect.

Anyway, the question on the table is, to me, a critical question to ask: How to build a profitable business in mobile?

The panel, IMO, went down the obvious path of:

• Interesting content and services
• Compelling, yet simple engagement
• Powerful marketing, discoverability and distribution
• Advertising is not it

All true, but, duh.

Duh because the free business model, as successful as it may be (is it?), should be viewed as a pathway to an upsell. That's the critical point people seem to forget. Users have money, and they are willing to spend it. On tickets, goods, experience, less so content but some, etc.

Once we figured that out, we come to the real question of, ok, how do you charge the user

• In both scenarios: resident apps and mobile web
• In a highly user-friendly way, that does not require you to pre-sign up on the web. Yes, I'm talking about a one-click checkout on-bill transactions. Like they had for years now with PayForIt in the UK.

If developers could answer that question, then the way the US mobile space looks would have been very different. Suddenly the Mobile option would seem like a money generating, obvious decision for marketers, who are today sitting on the fence. It's not to say app stores don't allow charging, and Apple just recently approved on-app follow-on charges. But it's not anywhere near being readily available mainstream technology.

What are the available options to bill the user, in the US, today? (this is my knowledge, please correct me)

• Carrier billing
  Pros: very simple, user friendly and familiar checkout process. Does not require pre-signup on the user. Support for refunds etc.
  Cons: Expansive setup and recurring charges, to the degree that it is prohibitive for startups. Unimaginable transaction % left to the carriers. Service Guidelines (dictated by the carriers) change on a weekly basis (creating a massive engineering effort).
  
• SMS Billing
  Pros: Works (almost) cross carrier. Users are comfortable and familiar with the SMS.
  Cons: see above.
  
• WAP Billing
  Pros: Mobile web one-click Amazon-like experience, beautiful. Money savings (not sending premium SMSs).
  Cons: Definitely not cross carrier. Massive efforts required to maintain and add new services to conform with carrier guidelines.
  
• Off-Deck billing
  The reason off-deck billing is very interesting is because in the US it has huge potential: In many world countries (the Philippines is a a great example), esp. where people's access to cash and banks isn't as easy, carriers identified the potential and provided mobile solutions for financial transactions, money transfers etc. In the US, there is a growing need for mobile financial solution, but the carriers do not have the silver bullet solution today. That's the definition of a gap that entrepreneurs can fill.
  
  • Pre registration solutions:
    So yeah, Amazon, Paypal, Google and others provide great solutions, with great payout as well. The only downside is that you either need to
    
    • Be a pre-registered member of the service: an Amazon signed customer, Google checkout, Paypal mobile etc.
    • Own and be willing to enter your full credit card details (including address etc.) on your mobile phone (these days, with an increasing number of phones that have full keyboards, it's not as bad).
      
    Bottom line: Mobile is about immediacy. If we can't enable real time access to shopping for a first-time user, it's a real limitation.
    
  • On the fly: I'm actually not aware of these solutions (enlighten me). On-the-fly off-deck solutions, to me, is exactly what is needed.
    

To summarize this long post (sorry), I think there is a gap in the US as far as mobile solutions for recurring user billing transactions. It could come from the carriers in the form of financially and technically reasonable ubiquitous solution (like PayForIt), or it could come from entrepreneurs who can figure it out as a service that plugs into apps and mobile sites.

Y Combinator startup TipJoy shuts down

"Concurrent with shutting down the site, the two co-founders have moved to the west cost, Ivan Kirigin told Mass High Tech in an email. Early this year, Y Combinator announced plans to close its East Coast program, formerly headquartered in Boston, and focus on incubating West-Coast-based startups."

Read more here.

Say no more. Sigh.