Has the digital revolution really changed the music industry?


“It’s entirely possible to create a cottage business around your music and stay in control”, says Laura Kidd, an independent (indie) artist who records as She Makes War.

She argues that increasingly sophisticated technology allows artists to record music, build websites, crowd-fund, upload music videos, create and sell a variety of merchandise and, most importantly, release and promote their music online.

“Bandcamp was the game-changer for me” says Kidd. “I started using it in 2009 to release my first EP and continue to use it for the majority of my digital sales and for all my online physical sales, gig tickets and merch.”

Bandcamp is an online marketplace where artists can connect with fans, stream their music and sell digital and physical wares. The site allows artists to set their own prices, with the pay-what-you-want model being a popular option.

“Before Bandcamp it was possible to sell direct to fans with Paypal buttons on your website but it’s so much nicer to use their service, and the browsing functionality is really the only successful attempt to build on the best feature MySpace ever had. The ethos is lovely too – artists can recommend other music they like to fans who buy their stuff. It’s a friendly community and I feel proud to be part of it.”

“Jessie J’s home-made YouTube videos bagged her a major label record deal.”

Birthplace of stars

MySpace may have fallen out of favour in recent years, but during its prime, the site was a revolutionary force in the music industry, setting a new precedent for social media and creating a platform that spawned online sensations-turned big pop acts such as Lily Allen.

Other sites have followed this star-making trend: Jessie J’s home-made YouTube videos bagged her a major label record deal, while Mike Posner used a loophole in iTunes U – a free-to-upload channel designed for educational audio content ­– to launch his career.

Famed indie rapper Macklemore met his collaborator Ryan Lewis through MySpace in the mid-noughties. The phenomenal success of their Grammy-winning 2012 album, The Heist, has been hailed by some as proof that indie artists operating in the digital age can now reach global audiences without the clout of majors.

Years of touring and web-based promotion laid the necessary foundations, and staying indie (Macklmeore released The Heist and the albums that preceded it through his own indie label, Macklemore LLC) meant retaining the publishing rights artists normally relinquish to labels, and forgoing the percentage cuts that majors impose on their artists.

But the idea that Macklemore made it alone is misleading. The duo’s success owes much to the Alternative Distribution Alliance (ADA), the independent arm of major label Warner Music Group. For a flat monthly fee, ADA used its acumen and contacts to promote, plug and distribute The Heist, pushing Macklemore into the highest echelons of the mainstream.


Digital distribution

As Kristin Thomson, social researcher and co-director of the Artist Revenue Streams Project points out, even talented, commercially viable artists need experienced partners to achieve that level of impact.

“Independent is often synonymous with ‘Do It Yourself’, but they need to be thought of as separate objectives,” she says. “Thanks to the surge in new [digital] methods to discover, access, listen to, share and purchase music, there are dozens of ways that an independent musician can reach very large audiences. But even with these new platforms and channels, it takes a ton of work and strategic thinking.”

Very few indie artists can access the services of big-league distributors such as ADA, who prefer artists to have had demonstrable success with radio airplay and online sales. But the proliferation of digital distributors has helped indie artists ply their trade online.

“I can get my music everywhere online through AWAL,” says Kidd. “They don’t charge upload and storage fees. It’s quick and easy to upload new releases for distribution to iTunes and all the other online music stores.”

Beatport does similar, and is a trusted source for the electronic dance music scene while Naxos is a favourite for classical musicians.

CD Baby.com, which started in the late 90s as an online mail-order service, allows unsigned musicians around the globe to make their music available online in the same stores and streaming services used by major and indie labels alike.

“CD Baby was one of the first aggregators to forge a partnership with iTunes,” explains Thomson. The fact that CD Baby sends 91% of the net proceeds from sales back to its artist clients has made it a firm favourite among indie artists.

Other renowned aggregators include TuneCore, ReverbNation and Ditto Music. Each of these digital aggregators represents a massive disruption of the former label-distributor-retailer chain, says Thomson, allowing artists to be paid quickly and transparently.


A radical shift

This is a radical shift from yesteryear, says Thomson – and she should know. In the 90s, together with Jenny Toomey, Thomson founded the much-loved, now-defunct indie label Simple Machines.

“Prior to 2000, if you wanted to sell recorded music on a semi-wide scale, you needed to manufacture discs or vinyl (and probably needed a record label to do that),” she explains. “Then you needed to make a deal with a distributor, which would then act as a middleman between you as the artist/label and the retail record shop. Payments for sales were often slow, and unsold stock could be returned. Clearly, the development of digital music sales via stores like iTunes and Amazon has been revolutionary on its own.”

Thomson says watching the shift into digital distribution has been fascinating. “As someone who used to fill out the UPS log book and take crates of mail-order packages to the post office, digital distribution means no more shipping physical inventory around, no more worrying about what is in stock. Everything is always in print!

“But that’s the downside too; everything is always in print. For a music fan this is great, but for any new label/musician that wants to attract fans to their music, they are no longer just competing for attention with the week’s new releases – they are also competing with just about everything else that was recorded and released in the past 40 years.”

“The Artist Revenue Streams project has identified more than 42 revenue streams for indie musicians.”

Beyond online sales

Artists may be able to sell both digital and physical releases directly from their websites but getting physical stock into shops is still vital for emerging artists says Rich Walker, general manager at respected indie label 4AD.

Finding online distributors such as AWAL may be easy, but convincing reputable distributors your physical releases are profitable is getting harder for indie artists. “You have to see it from a distributor’s point of view: if artists have low demand then the risk is too great,” he explains. “What they do isn’t easy, especially with the likes of Amazon being able to undercut prices so much.”

Focusing on sales alone isn’t an accurate way of gaging the modern indie musician’s income, which can include physical (CD and vinyl) sales, digital sales, merchandise, touring, teaching, session musician work, song-writing for others, streaming royalties (which now count towards chart positions in the UK singles chart, with every 100 streams on sites such as Spotify being treated as equivalent to one single sale) and syncs (letting a company use your music in a TV/radio advert).   

The Artist Revenue Streams research project that Thomson co-runs for the Future of Music Coalition, a US-based non-profit organisation, has identified more than 42 revenue streams. Their 2011 survey of over 5,300 US-based musicians found that 82% were drawing income from a mix of sources, with income varying significantly depending on the role and genre the artist works in.

However, the proliferation of revenue streams doesn’t automatically equal guaranteed profit, Thomson emphasises. “There are many ways that musicians can make money, but it’s certainly not guaranteed that they will.”


The majors still rule

For all the new avenues the digital age has opened up, there are pitfalls – and indie artists are at the mercy of these potholes.

YouTube has been a boon for indie artist, says Kidd. “You used to have to pay to submit videos for MTV and cross your fingers. Now we can upload massive file sizes for nothing and have people stumble across our music.”

Worryingly, this democracy looks set to change. The Worldwide Independent Network, an international consortium that represents indie music labels, claims that Google-owned YouTube is coercing indie labels into signing away their copyright ahead of the site’s upcoming music streaming subscription service, or risk being removed.

In some ways, the digital age – which was meant to democratise – is further entrenching traditional power structures. Hierarchies still exist, says Walker. “Just look at the charts – the majors dominate them as much as ever.”

“Taking out a label still leaves artists to work in a pretty traditional way.”

Label or no label

As Thomson points out, this is because majors own or control licensing for a huge swathe of recorded music history, giving them enormous leverage in the music-technology licensing world.

They have long-established ties with commercial radio, which, in the US, is still the leading way that young music fans discover new music. They also have the contacts, expertise and capital to mount ambitious marketing campaigns, while indie artists and labels operate on much tighter budgets.

But there is room for both majors and indies, believes Thomson. “There are only so many hours in the day,” she says. “Musicians need to be selective about what they can do, and identify where they need help.”

Walker believes labels are necessary and valuable. “Taking out a label still leaves artists to work in a pretty traditional way – employing managers, agents, promo staff, distributors, lawyers, accountants. I don’t know of any act that has truly broken out of that cycle.”

Even Kidd, who is staunchly indie, isn’t anti-label, she says – “just opposed to bad, money-wasting, creativity-dampening labels! There are some great ones out there gathering excellent artists under their umbrellas: Jagjagwar, Secretly Canadian, Cherry Red, Howling Owl, Alcopop. The benefit to artists is the extra energy, strategic skills and contacts that a good label can bring. I think there will always be a place for those things.”

Featured image and inline image 1 courtesy of Avis De Miranda / Shutterstock.com.

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World-renowned physicist Stephen Hawking has died at the age of 76. When Hawking was diagnosed with motor neurone disease aged 22, doctors predicted he would live just a few more years. But in the ensuing 54 years he married, kept working and inspired millions of people around the world. In his last few years, Hawking was outspoken of the subject of AI, and Factor got the chance to hear him speak on the subject at Web Summit 2017…

Stephen Hawking was often described as being a vocal critic of AI. Headlines were filled with predictions of doom by from scientist, but the reality was more complex.

Hawking was not convinced that AI was to become the harbinger of the end of humanity, but instead was balanced about its risks and rewards, and at a compelling talk broadcast at Web Summit, he outlined his perspectives and what the tech world can do to ensure the end results are positive.

Stephen Hawking on the potential challenges and opportunities of AI

Beginning with the potential of artificial intelligence, Hawking highlighted the potential level of sophistication that the technology could reach.

“There are many challenges and opportunities facing us at this moment, and I believe that one of the biggest of these is the advent and impact of AI for humanity,” said Hawking in the talk. “As most of you may know, I am on record as saying that I believe there is no real difference between what can be achieved by a biological brain and what can be achieved by a computer.

“Of course, there is unlimited potential for what the human mind can learn and develop. So if my reasoning is correct, it also follows that computers can, in theory, emulate human intelligence and exceed it.”

Moving onto the potential impact, he began with an optimistic tone, identifying the technology as a possible tool for health, the environment and beyond.

“We cannot predict what we might achieve when our own minds are amplified by AI. Perhaps with the tools of this new technological revolution, we will be able to undo some of the damage done to the natural world by the last one: industrialisation,” he said.

“We will aim to finally eradicate disease and poverty; every aspect of our lives will be transformed.”

However, he also acknowledged the negatives of the technology, from warfare to economic destruction.

“In short, success in creating effective AI could be the biggest event in the history of our civilisation, or the worst. We just don’t know. So we cannot know if we will be infinitely helped by AI, or ignored by it and sidelined or conceivably destroyed by it,” he said.

“Unless we learn how to prepare for – and avoid – the potential risks, AI could be the worst event in the history of our civilisation. It brings dangers like powerful autonomous weapons or new ways for the few to oppress the many. It could bring great disruption to our economy.

“Already we have concerns that clever machines will be increasingly capable of undertaking work currently done by humans, and swiftly destroy millions of jobs. AI could develop a will of its own, a will that is in conflict with ours and which could destroy us.

“In short, the rise of powerful AI will be either the best or the worst thing ever to happen to humanity.”

In the vanguard of AI development

In 2014, Hawking and several other scientists and experts called for increased levels of research to be undertaken in the field of AI, which he acknowledged has begun to happen.

“I am very glad that someone was listening to me,” he said.

However, he argued that there is there is much to be done if we are to ensure the technology doesn’t pose a significant threat.

“To control AI and make it work for us and eliminate – as far as possible – its very real dangers, we need to employ best practice and effective management in all areas of its development,” he said. “That goes without saying, of course, that this is what every sector of the economy should incorporate into its ethos and vision, but with artificial intelligence this is vital.”

Addressing a thousands-strong crowd of tech-savvy attendees at the event, he urged them to think beyond the immediate business potential of the technology.

“Perhaps we should all stop for a moment and focus our thinking not only on making AI more capable and successful, but on maximising its societal benefit”

“Everyone here today is in the vanguard of AI development. We are the scientists. We develop an idea. But you are also the influencers: you need to make it work. Perhaps we should all stop for a moment and focus our thinking not only on making AI more capable and successful, but on maximising its societal benefit,” he said. “Our AI systems must do what we want them to do, for the benefit of humanity.”

In particular he raised the importance of working across different fields.

“Interdisciplinary research can be a way forward, ranging from economics and law to computer security, formal methods and, of course, various branches of AI itself,” he said.

“Such considerations motivated the American Association for Artificial Intelligence Presidential Panel on Long-Term AI Futures, which up until recently had focused largely on techniques that are neutral with respect to purpose.”

He also gave the example of calls at the start of 2017 by Members of the European Parliament (MEPs) the introduction of liability rules around AI and robotics.

“MEPs called for more comprehensive robot rules in a new draft report concerning the rules on robotics, and citing the development of AI as one of the most prominent technological trends of our century,” he summarised.

“The report calls for a set of core fundamental values, an urgent regulation on the recent developments to govern the use and creation of robots and AI. [It] acknowledges the possibility that within the space of a few decades, AI could surpass human intellectual capacity and challenge the human-robot relationship.

“Finally, the report calls for the creation of a European agency for robotics and AI that can provide technical, ethical and regulatory expertise. If MEPs vote in favour of legislation, the report will go to the European Commission, which will decide what legislative steps it will take.”

Creating artificial intelligence for the world

No one can say for certain whether AI will truly be a force for positive or negative change, but – despite the headlines – Hawking was positive about the future.

“I am an optimist and I believe that we can create AI for the world that can work in harmony with us. We simply need to be aware of the dangers, identify them, employ the best possible practice and management and prepare for its consequences well in advance,” he said. “Perhaps some of you listening today will already have solutions or answers to the many questions AI poses.”

You all have the potential to push the boundaries of what is accepted or expected, and to think big

However, he stressed that everyone has a part to play in ensuring AI is ultimately a benefit to humanity.

“We all have a role to play in making sure that we, and the next generation, have not just the opportunity but the determination to engage fully with the study of science at an early level, so that we can go on to fulfill our potential and create a better world for the whole human race,” he said.

“We need to take learning beyond a theoretical discussion of how AI should be, and take action to make sure we plan for how it can be. You all have the potential to push the boundaries of what is accepted or expected, and to think big.

“We stand on the threshold of a brave new world. It is an exciting – if precarious – place to be and you are the pioneers. I wish you well.”