Dave Matthews Band was the top grossing touring act of the last decade, with $500+ million in gross ticket sales and 11+ million tickets sold.  Instead of touring as usual this year, DMB is playing four 3-day, multi-artist festivals.  While an increasing # of artists have been putting on their own festivals, it’s notable given that DMB is such a big draw on the road.  

So what does this have to do with Live Nation?  Well, in 2010, Live Nation promoted 56 of DMB’s 61 shows, with a tour gross of $61 million and 1+ million tickets.  As most of those shows took place in Live Nation venues, those 1 million people generated ancillary income for LN (parking, concessions, etc) as well as ticketing fees (most, if not all, of the shows would have been ticketed thru Ticketmaster).  

In 2011, DMB’s Caravan Festival will hit 4 venues: Bader Field (Atlantic City), Govenor’s Island (NYC), Lakeside (Chicago) and The Gorge (George, WA).  Bader Field has a 60k+ capacity and the other venues are on the 20k-25k range.  Tickets are priced at $65/day.  

Of the 4 venues, only the Gorge is a Live Nation venue.  So rather than Live Nation promoting the majority of its tour, DMB will be in control and able to ticket the festivals themselves (except for the Gorge - since it’s a LN venue its ticketed thru Ticketmaster).

Based on the venue capacities, DMB could be able to sell 350k+ tickets this summer, and could gross $25 million - before factoring in VIP packages, travels packages, concessions, etc.  Based on 12 days (3 days X 4 festivals), that’s $2 million+ per day (about 2x what they grossed last year per show, of course they have a talent bill to pay this year).

This year is the band’s 20th anniversary, so perhaps this is a one-off deal and next year they’ll be back on the road as normal.  But it’s certainly possible that the band may prefer being in control - of the ticketing, the overall experience, etc.  Fans may not want to travel as far each year, but there’s no reason DMB couldn’t expand the concept to more cities over time - the key is finding non-traditional venues not controlled by LN.  This could be a much better business model for DMB that allows them to control the overall fan experience from end-to-end and takes LN (largely) out of the equation.  Of course, that’s the strategy espoused by Live Nation - being able to control the fan experience from start to finish.  It just seems that DMB (and their team) is much credible when they make that promise.

Over the last 2.5 years, Pandora has grown it’s listener hours by almost 4x, from 1 billion hours in fiscal 2009 to 3.9 billion in fiscal 2011.  2/3 of this growth has been from Pandora’s mobile platform.  Launch in July 2008 with it’s iPhone app, Pandora’s mobile platform now accounts for greater than 50% of the company’s listener hours.  Over the same period, Pandora’s revenue has grown more than 6x, from $19 million to $138 million.  It’s a great story - significant mobile adoption and top line growth, except for one disconnect…

While mobile usage has driven the bulk of Pandora’s listener growth over the lat 2 years, it’s driven very little revenue to date.  The revenue growth has come from Pandora ramping up its online display advertising.  While this revenue growth is a clearly a good trend, Pandora needs to demonstrate it can turn a profit on its mobile platform.

As Pandora moves into the mobile market, it’s opportunity is going to be driven much more by audio ads and local customers, as opposed to national advertisers buying display ads.  While this is still a nascent market, the goal is to start capturing a share of the traditional radio advertising market ($15.7 billion in 2010).

Given the importance of mobile listeners to Pandora’s overall growth, Pandora has to significantly ramp up it’s mobile monetization (or switch to more of a subscription driven model, which hasn’t been the primary focus to date).

If Pandora can do this, they have a large market in front of them.  They are just starting to enter the automotive market, which could be another huge source of listener hours. It’s also a key listening environment if they really are going to start capturing traditional radio advertising $.

Although Mumford & Sons didn’t win a Grammy - they walked away with the breakthru performance of the show.  Their story is a reminder that the music industry is driven by artist development - getting an artist in front of an audience and building a fan base.  Everything else follows from there.

While a majority of Grammy viewers may have seen Mumford and Sons for the first time, their development (here in the US) started back about a year and half ago.  Prior to that, they had already spent a couple of years touring and developing in the UK. Here’s a look at Mumford & Sons growth in the US through a variety of measures.

October 2009-Feb 2010 - The band’s album was released in the UK in October 2009. At this point, US awareness was low - but you can see the US search activity starting to grow (Google Trends; charts below).  The US album release was in Feb, where you can see awareness continuing to grow.

Feb 2010-July 2010 - After the album release, there was sustained momentum: album sales held up, the bands social community grew, and site traffic grew.  Their single grew slowly at radio along with digital single sales.  The band played about 20 tours dates in 500-1500 capacity venues, selling 15k+ tickets. They also appeared at major US festivals (Bonnaroo, Lollapalooza, Telluride Blues, etc.) over the summer. 

Aug 2010-Nov 10 - In August, activity really took off as some traditional, more mainstream drivers kicked in.  VH1 started playing the video and featuring the band in their You Oughta Know campaign, which likely have helped drive the radio audience.  Across the board, you see a pick up in sales, site traffic, search, streams, etc.  The band plays another 18 dates in Oct/Sept, this time in 1,000-3,000 capacity venues, selling close to 40k tickets.

Dec 2010-Feb 2011 - Momentum continued to build thru the holidays and right up to the Grammy’s, at which point their performance introduced to them a much larger audience. 

Looking backwards, it’s tempting to look at the growth and think it was inevitable, or forseable, but that’s not the case.  This is a really a best case scenario.  But it’s still interesting to see the early signs of traction and growth… initially driven by the UK buzz and word of mouth.  What seems remarkable is the consistent growth, even at low levels, the trends were always moving in the right direction.  What also jumps out is that when the mainstream drivers kicked in it amplified everything that was going on. The VH1 spins and radio airplay weren’t happening in a vacuum - groundwork had already been laid.  There’s You Oughta Know artists who don’t connect, and artists who reach much greater radio audience that sell fewer albums.  But in this case these drivers had a real impact, as they were a piece of a larger story, not THE story.

There’s a lot of focus these days on the macro trends in the industry, i.e. collapsing CD sales.  While this is understandable - it should also be obvious at this point to anybody who’s paying attention.  It’s also distracts from the task at hand - which is finding a way forward to sustain the artist development process.  One piece of that is sorting out which artists are gaining traction and filtering/amplifying that info to the masses - and it sill seems like there’s a big opportunity to really nail that challenge.

Unless noted, all metrics are US only.

Google Trends (relative scale; up to but not including Grammy’s)

Monthly Site Traffic (in thousands)

Weekly Audio Streams (in thousands)

Not specifically US streams, but you can still see a growth pattern similar to the other trends (YouTube streams were probably 5x-10x this level).  Also, Myspace traffic overall was declining during this period.

Digital Singles (in thousands)

Album Sales (in thousands)

Radio Audience (in millions)

Video Audience (in millions)

Community Growth (New Facebook Fans, in thousands)

Tickets Sold

Google Trends (up to and include the Grammy’s)

This includes the Grammy spike.  The jump was about the same level as Arcarde Fire, who won album of the year - and considerably higher than the Avett Brothers of Bob Dylan, who Mumford & Sons performed with.

Data from Google Trends, Compete.com, Pollstar, Songkick, Nielsen Soundscan/BDS, Next Big Sound, and estimates.

Kyla La Grange “Walk Thru Walls" 

Stumbled across this on Soundcloud - debut single from UK artist Kyla La grange.

A haunting and powerful voice.

iTunes recently increased their song previews from 30 seconds to 90 seconds. The reasoning is straightforward: give people an opportunity to hear more music and and you have a greater chance of converting them (provided the content is good). Makes sense. But if I want to preview an album, listening to 10-12 consecutive 90-second clips is not something I would do. I want to hear the album in its entirety - hopefully multiple times.  If I don’t make it thru the first listen, I’m not a buyer. Sometimes the first listen is just on in the background while I’m working.  Before I know it, the album is over and I think to myself that sounded good.  I’m going to listen again - this time paying more attention. Maybe I’ll listen to it during a run or on my way home.  I want to live with it for a few days/plays and decide if I really like it.  At that point, if it’s an album that I’ve enjoyed, there’s a good a chance I want to add it to my permanent collection and be willing to buy it.

iTunes is limited by what it’s content partners are willing to do, and clearly 90 seconds is more then 30 seconds, but it’s still short of what I want.  Give me the music, let me live with it for a few days, and then I’ll decide if I want to buy it.  Yes, this is what album previews on Spinner, MySpace, NPR, etc. do (without the mobility).  Yes, this is what TopSpin widgets and Bandcamp pages do (again w/o the mobility).  And yes, I’m able to do this via subscription services.  Which only reinforces the point that it it could be a powerful feature if integrated into iTunes.

I want to try before I buy.

Looking at how people discover music, people seem to fall into one of two broad categories.  There are those who take an active approach - let’s call them the crate diggers.  They used to spend hours flipping through the racks of vinyl/CDs at their record store and reading music magazines.  Today they’ve likely moved their attention online – where they read blogs, share music with their social networks, and sample music from a variety of sources (YouTube, MySpace, P2P, IM, subscription services, etc).  Regardless of the shift, the crate-diggers invest their time in looking for new music, are willing to sample lots of new music, and generally take pride in discovering something new and sharing it with their friends.  They enjoy the music discovery process itself.

The other category takes a more passive approach to music discovery.  While they enjoy listening to music and are open to new music - they don’t enjoy the process of looking for new music, they don’t know how to go about it, or they simply don’t have the time to commit to it.  Let’s call this group radio listeners, because by and large that’s how they’ve often discovered music in the past (and continue to do so today) – through broadcast radio and video channels, and increasingly online radio.

These two groups aren’t mutually exclusive.  Crate-digging is very much a lean-forward media experience while radio listening is lean-back.  If I have a few free hours on the weekend, I may want to spend some time looking for new music. But when I’m busy at work, I may just want to hit a button and turn some music on.  So for any individual, music consumption may be a mix of active and passive, a mix which also will likely shift over time.  A college student may easily find a few hours a week to dedicate to active music discovery.  But a middle-aged professional with a family with limited free time may not have the same luxury.

It’s no secret that a majority of music consumption falls into the passive category.  As Pandora has pointed out, 85% of music consumption in the US is radio listening (http://bit.ly/cItRIn).   We7 in the UK recently switched it’s focus to a radio focus from online streaming.  In doing so, it announced that 55% of its tracks where being access via it’s radio feature.  Similarly, a look at the iTunes or Spotify charts shows a high correlation with radio airplay – suggesting that a large % of consumers still discover music through largely passive means.

So what?  There’s still a significant community of passive music consumers that aren’t discovering new music, which represents an opportunity for those services which address this need.

Looking forward to hearing more new material…

thefamilyrecords:

Song Of The Day: Wakey!Wakey! - Great Lake Love

The first new W!W! song the band has recorded since the current album, and a b-side to the new Dance So Good (Full Band Version) single which is set to go up on iTunes later today. Please support the band! :)

Company of Thieves performing Pressure at Bowery Ballroom.

Need to catch their next show in NYC!

Extension.fm is a Chrome extension that catalogs the mp3 files from the sites you visit into a web-based music library.  When you visit a site, the extension adds the site and its mp3 links to your library.  As the site is updated, the new mp3s are automatically added to your library.

Extension.fm provides an interesting way to discover music, as you have a constantly growing stream of music.  There’s also an iTunes like UI, which lets you access your library by song, by artist, or by source site.

By mapping song metadata to mp3 links across the web, Extension.fm is building a music catalog around which it can enable other features, like playlist sharing or a social recommendation service like M-Flow in the UK.  Of course, the catalog is limited to mp3s available on the web, but there aren’t any licensing roadblocks - since the sites hosting the mp3s are responsible for licesning, paying SoundExchange, etc.  This dynamic may change if Extension.fm’s usage grows significantly, particularly since the service won’t necessarily drive traffic to the underlying sites they way HypeMachine does (the source site of a track, while visible, isn’t really central to the product). 

Regardless, it’ll definitely be interesting to watch the product develop.  Dan Kantor, the founder, previously founded music-streaming service Streampad.  And the company recently raised a first round of funding from music-loving VC Bijan Sabet (Spark Capital) along with Betaworks and Founders Collective.

A nice addition to the NYC music-tech scene.