A Hip-Hop Star's MySpace Dreams
By John Heilemann, Business 2.0 Magazine columnist,
Business 2.0 columnist John Heilemann talks with music impresario Damon Dash about his new social networking venture and why he'd rather be Bill Gates than Steve Jobs.



(Business 2.0 Magazine) -- The New York office of Damon Dash isn't your typical high-tech startup CEO's spread. The space is vast and the ceiling is vaulted. Painted on the wall is a giant red handgun bearing the inscription "Crime Fighter." In the corner is an antique barber's chair -- in which the man himself is seated, getting his head shaved.

"My barber says it's the best chair he's ever seen," Dash reports. "I took it off a Rockefeller yacht."

The Harlem-born, 36-year-old Dash, who rose to prominence in the 1990s as the hip-hop impresario behind the likes of Jay-Z and Kanye West, has always had a thing about Rockefeller. His first company was Roc-A-Fella Records; his second was the B-boy apparel house Rocawear. He co-founded both of them with his pals Jay-Z and Kareem "Biggs" Burke.

But after Dash and Jay-Z split up in 2005, Dash was reportedly left with a net worth of $50 million and not a piece of either Roc. Since then he has undertaken a variety of entrepreneurial activities, from fashion to filmmaking. And now he's suddenly thrown himself into the realm of social networking.


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Go Green. Get Rich. 101 Dumbest Moments in Business How to Create Your Own TV Channel 20 Smart Companies to Start Now Dash's new Web venture is BlockSavvy, a site aimed at what he dubs the "urban-lifestyle demographic." When I ask what motivated this endeavor, Dash answers bluntly, "Money." When I ask him to elaborate, he turns to Burke, who explains, "After MySpace sold for $580 million, we said, damn, we gotta get us some of that."

Such comments, of course, may seem a sign that the Web 2.0 bubble has peaked, that the greater fools are rushing in. But Dash and Burke are clearly no fools. And whether BlockSavvy succeeds or not, its approach suggests much about what direction social networking is headed.

The real driving force behind BlockSavvy, in fact, isn't either Dash or Burke. It's a young Web designer, Kwame DeCuir, who was Dash's technical consultant on his BET reality show Ultimate Hustler. Trained in computer science at the University of Texas at Austin, DeCuir was likewise struck by the success of MySpace -- especially since, as he says, "I wasn't too impressed with their technology, and they had no real business model." So he set out to create something better and persuaded Dash and Burke to back him.

What DeCuir and his team built, as he describes it, is a site that offers all the social-networking basics -- profiles, content sharing, blogging -- in a rich-media environment segmented at the moment into three "neighborhoods" appealing to different groups. Once users choose where to "live," they can set up 3-D-rendered, photorealistic rooms and trick them out with virtual branded products.

These they purchase with "SavvyDollars" earned by spending time interacting with the site. They can also use their virtual bucks to bid in auctions for real-world items such as iPods and Nintendo Wiis.

The virtual economy is central to the site's business model. Through what DeCuir calls an "invest-and-reward program," advertisers pay to erect virtual storefronts selling cybergoods. They offer users SavvyDollars to participate and then monitor their behavior.

Indeed, to DeCuir's way of thinking, the most valuable thing BlockSavvy offers advertisers -- along with the ability to interact with some hard-to-reach demographics -- is reams of qualitative data about the whims of its users.

It's far too early to know how well any of this will work. BlockSavvy went live in November and has just 10,000 invitation-only members, though the company has lined up some impressive advertisers, including AT&T and Toyota.

What's beyond doubt is that marketers are craving more immersive and interactive ways to communicate with young consumers online. Around the world an emerging array of new social networks, from Cyworld in South Korea to Webkinz in Canada, hint at a future in which MySpace may soon look rather antiquated. And let's not forget Second Life, the virtual world with which BlockSavvy also shares certain attributes.

By now you might be thinking, OK, but what does Dash bring to this party? Certainly not a deep understanding of, or even interest in, the online world.

"Not at all," he answers when I ask whether he's spent time on MySpace. "I'm a grown-ass man. I'm not a Web kind of guy. I'm not a TV guy, or a videogame guy. I'm not an anything guy where I have to sit still for very long."

What Dash does bring to the party is his money (though he and Burke have put less than $1 million into BlockSavvy so far), his network of connections in the worlds of music and fashion, and, most important, his imprimatur.

"In the urban demographic, people know that if it's a Damon Dash product, there's a certain quality," he says. "But I'm not a celebrity. I don't believe that having my name on something is going to make it sell. I believe that having my name on something is going to make me sell it."

It would be easy to dismiss Dash as some kind of a digital dilettante. But he strikes me as a kind of venture capitalist -- one who dispenses with the mumbo jumbo that tech VCs ritually spit out to make themselves sound noble. In Dash, you have a guy whose main gifts are a nose for talent and an eye for a market opportunity. He's got an appetite for risk and a thirst for the big score.

"The bigger the stakes, the bigger the reward," he says. "If you make $10, it's easy to put that s--t back on the street. But a real hustler makes $20 million and puts $18 million back on the street. And that's me. I just always feel like if I don't, I'm gonna miss out on making $100 million."

The VCs on Sand Hill Road might not put it quite so starkly, but their sentiments are identical. And something similar can be said about the underlying motivation that keeps all of them in the game. "Once I flip this for a bunch of money," Dash says, "I'll be validated in technology. People will have to notice me."

So, given a choice, who would Dash rather be: Bill Gates or Steve Jobs? "Which one got more money?" Dash shoots back. Gates has more money, but Jobs is cooler. "Yeah, but if I was Bill Gates, Bill Gates would be cooler," Dash says. "Definitely."

Does digital file sharing render copyright obsolete?

By Victoria Shannon
Published: June 3, 2007

BRUSSELS: When the 1980s pop star Robin Gibb writes a song these days, he says he doesn't think about whether it is copyrighted or licensed - he devotes himself to his art and lets his handlers see to its legal and financial well-being.

But when NoobishPineapple, an 18-year-old from Spearfish, South Dakota, uploads his 36-second rap video about fast food onto YouTube, he has no staff of assistants to make sure his creation is protected or paid for - and he probably doesn't care, anyway.

That makes people like David Ferguson, head of the British Academy of Composers and Authors, nervous about how art will be sustained in the future. And it is giving people like Lawrence Lessig, founder of Creative Commons, an opening to promote alternatives to the world's increasingly maligned copyright systems.

The youth craze for making and posting digitized audio and video on the Internet - their own creations and those of others, without regard to ownership or payment - is driving a wedge between the traditional "commercial" economy and the upstart "sharing" market, analysts say. Likewise, it is paralyzing and polarizing the groups that are supposed to make sure writers and composers get the royalties they are due.

At a self-described summit meeting on copyrights in Brussels last week, the world's major groups representing creative authors - the collecting societies at "the bottom of the food chain," griped one executive - vented, fumed and wrung their collective hands about their future. At the end of the event, Italian authors called for a "strike" to suspend licensing any form of public performance for a week in June to call attention to illegal downloading and authors' rights.

In the absence of a wholesale update of royalty systems, billion-dollar court battles - like the Viacom lawsuit against Google, which owns the YouTube video-sharing site - will most likely be the determinant of the value of digital copyrights, analysts say.

"There are an extraordinary number of people who are creating on their own and doing so for a different reason than money," Lessig, a lawyer who allies himself with Google in copyright positions, said during an interview. "Somehow we've got to find a system that ratifies both kinds of creativity and doesn't try to destroy one in order to preserve the other."

Ben Verwaayen, chief executive of BT Group, the British phone company, laid the blame at the feet of the societies, not technology or authors themselves. "The problems are the institutions," he said. "They have to change."

In Europe, collecting societies have so far dodged a bullet aimed at them last year, after the European Commission started antitrust proceedings against their 150-year-old system of coordinating royalty payments and redistributing them to authors.

Gibb, part of the successful BeeGees band of "Night Fever" fame, testified on behalf of author societies at the hearing last summer on the commission's objections over royalty competitiveness issues. Now, he is adopting a more formal role; on Friday, he took over as president of Cisac, the international collecting-rights umbrella organization that sponsored the meeting.

"I feel strongly that it's a moral right for everybody to get what they deserve if they write a piece of work," Gibb said during an interview, "and they have a right to see that it's not used in a way that they're left out of the loop."

The commission has not closed its investigation. But since Gibb's intervention and other conversations with many of the 217 societies in Cisac, Ferguson said, "they are no longer talking about fining us, and they're not talking about taking money out of the pockets of creators."

But something has to give, most agree. Roger Faxon, chairman and chief executive of EMI Music Publishing, said the rigidity of European licensing had crimped digital music sales in Europe.

"We need to loosen it up," he said. "If we don't, we may well go back to a world in which you need a patron in order to make a living as a songwriter."

Gerd Leonhard, chief executive of a digital music start-up and author of "The End of Control," said he believes that the existing structure has outlived its usefulness, and - at a time when royalty-payment functions can be automated - he gives the collecting societies no more than three or five years of life.

Everyone seemed to have their own new way of going forward. After the European Commission's move against the collecting societies, EMI set up Celas, a one-stop shop for pan-European licensing of online and mobile service rights.

"In many ways it is an experiment, an attempt to find a different approach to try to solve the problem," Faxon said.

In Britain, meanwhile, Ferguson and Gibb are starting a cooperative record label called Academy Recordings that is designed from the ground up for the music writers. Ferguson said Academy had already struck deals with Apple's iTunes and the British start-up We7, the ad-supported British music download service backed by the rock artist Peter Gabriel.

Its first release will include members of the British music writers group like Gibb, Gabriel and the Pretenders. Like others before him, Ferguson envisions "a brand new digital business model."

The more, the merrier, some say. "We can't rely on knowing which business model is the one that is going to work," said Larry Kenswil, executive vice president of business strategy for Universal Music. "As content owners, we're obligated to try everything."

Joe Mohen, chairman and founder of SpiralFrog, which aims to start its advertising-supported free digital music store by the end of the summer, urged radical action, saying he had to cut deals with 38,000 music publishers in the United States alone.

"For new companies starting up, it is impossible to license country by country," he said. "If legitimate businesses are forced to do that, they're never going to be able to compete with the pirates. There's got to be some sort of pan-European licensing, and frankly global licensing is the preferred way."

Lessig, whose Creative Commons alternative licenses have been almost as abhorrent as online music theft to the societies, has nevertheless gained a grass-roots following as well as limited adoption by companies like Microsoft and the BBC. The licenses let the author determine whether to apply commercial rights and how much. They are available in 34 countries and were applied an estimated 145 million times last year.

Many collecting societies in Australia, Finland, France, Germany, Luxembourg, Spain, Taiwan and the Netherlands manage authors' rights for them, so individuals cannot apply a Creative Commons license. Lessig, a Stanford University law professor who is on a teaching fellowship at the American University in Berlin, said he hoped to announce a breakthrough agreement with a collecting society at the time of a Creative Commons conference in Croatia on June 15.

The author groups themselves are obviously conflicted, trying to balance supporting the audio and visual arts and making sure their creators get a portion of the royalty pie, when no one knows what the pie will look like.

Last year, more than half of all music acquired by consumers was unpaid, according to NPD Group, a market research company. Social "sharing" of CDs by friends accounted for 37 percent of all music consumption, NPD said.

"The CD is dying at a rate that is predictable at this point," Kenswil said. "It will someday level off into a niche market the way vinyl has. In five years, it will be of very little consequence.

"The problem is there is no physical medium to replace it. It's digital, but digital is in its infancy."

And many of those who would abolish copyrights in the digital age also are young, influenced by Internet social movements like free software code, blogging and file-sharing.

"A lot of people under 30 are 'can't pay, won't pay,' " Mohen said. "Many of them have never purchased a CD, and many never will. They have more time than they have money."

Ferguson can imagine the music distribution business disrupted so much in a few years that the entire world's catalog of music may be prepackaged and prepaid on some kind of key chain sold at gas stations. But he does not see the end of authors' rights groups.

"We're still going to need to license the hairdresser, the restaurant, the small radio station, national broadcasters," he said, noting that digital downloading may well represent an unsustainable business bubble.

But Alex Callier, songwriter and bass player with Hooverphonic, the Belgian pop band, bemoans the focus on business models and digital sleights of hand around "user-generated content."

"It used to be you had to know how to play the guitar and have some talent to make it in the music business," he said. "Some of the mystery and magic is gone."

Gibb, who said he never thought of his work as "intellectual property" but rather the result of an overwhelming need to write and perform, nonetheless was hopeful. "We're chipping away at the stone," he said.

Peter Jenner, chairman of the International Music Managers Forum, suggested a different approach. "I'd lock all the societies in a room until they get their act together," he said.




A HUGE thank you to Michael London for sending me both this article and the last one that I posted just prior to this one...

The Storm Is Coming ... And It Has Nothing To Do With Global Warming

"The CD is dying at a rate that is predictable at this point. It will someday level off into a niche market the way vinyl has. In five years, it will be of very little consequence. The problem is there is no physical medium to replace it. It's digital, but digital is in its infancy."
-- Larry Kenswil, executive vice president of business strategy for Universal Music. (As quoted in the article, "Does digital file sharing render copyright obsolete?" -- see link below.).
Well, I'm glad another label executive has come out and admitted the obvious. But since the CD "is dying at a rate that is predictable at this point," it immediately brings about several questions.

1. If the labels all know this, why haven't they dropped prices on CDs even more? This should be done as soon as possible to extend whatever shelf life is left for physical disc sales. Profits would still be more than those generated by online sales of music at iTunes and elsewhere, and lower prices might even increase disc sales of hot product and possibly good catalog titles. Online sales of digital music make current CD pricing inane and if prices aren't lowered, CD sales will decline even faster.

2. If the labels all know this, why aren't they trying to offer more "bang for the buck" by introducing something like more Dual-Disc/DVD titles into the marketplace that could open up another ancillary revenue stream beyond the CD? The Dual-Disc is a format that would allow labels to package great video content with great albums, and in doing could possibly provide even greater profits than music DVDs being sold separately. Imagine the marketing possibilities, and, at this point, what is there to lose by trying this? Not a thing. Oh sure, there are label suits who say the cost of making such packages won't be justified in the end because sales won't reach levels needed to make these profitable. But why not try it first with some great classic album titles and video content and see what happens. When consumers know what they want, and they want it badly enough, they somehow always find a way to get it. They've bought special box-sets, enhanced audio CDs of great albums, and special edition titles as well.

3. If the labels all know this, where is the innovation needed for the industry to successfully move from one business model to another as online digital sales of music increase? If indeed, there are strategies being drawn up in smoke-filled rooms somewhere at any labels, nobody anywhere is talking about them. The ONLY innovative ideas we read about are coming from technology companies like Apple, Microsoft, et al. Why aren't any labels working to create symbiotic relationships with tech companies? (And again, if they are, let's hear about it.) Yes, technology companies must innovate to survive, but is there any doubt now that all entertainment\content companies must do so as well?

4. While it's true that CD sales are declining fast, there are audiophiles and others who will always want to own CDs. This market can be exploited with great growth possibilities if labels utilize customer retention methodologies already in place in so many other industries. Reward programs that offer points towards future purchases (online or off) will generate not only more retention, but they can also generate a great database for individual labels that they can utilize to communicate directly with their consumers. As Sam Walton said, "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else." With all the entertainment options out there, it's more than high time to for the industry to create more customer loyalty.

Once CD sales do get to a level "of very little consequence" the industry will possibly find itself like the crew aboard the Andrea Gail. Headed into "The Perfect Storm."

A tidal wave of digital music sales that don't offer the same profit margins and a whirlpool sucking away physical CD sales. How to stay afloat during this time will be the industry's greatest test.


--------------------------------------------------------------------------------

AND NOW THIS
This week Justin Timberlake signed YouTube.com sensation from Holland, Esmee Denters, as the first artist to his newly formed Tennman Records. The 18-year-old Denters is one of the most notable singers-songwriters to gain attention strictly as an Internet performer and with a soulful voice beyond her years, she quickly became a YouTube celebrity.
Here's the big reason why Esmee is a YouTube hottie. She has allegedly received over 21 million views since posting his first performance on YouTube a little over eight months ago. 21 million!

Try and relate how 21 million views compares to a #1 record that gets 8,000 to 9,000+ spins a week (while it's red hot) at radio here, and you can see quite easily that radio is not the primary media of choice for active music people who are potential consumers looking for new music by new artists.

If only five percent of the people who have been potentially exposed to Esmee's videos (I say potentially because repeated views by people add into the total view number tally) buy her music, she has a potential platinum level album upon release. If only two-and-a-half percent buy her debut release, she's gold out-of-the-box.

Yet another case of artist development 2007 style by an artist that did it on her own.

This a little insight on CD sales from Allen Johnston
You can check out his site at:http://www.asha.com/


THE BUSINESS TODAY



I am old enough to remember the BANDS of yesterday that sold DIAMOND (10,000,000) units and had 1.5 to 2 million selling weeks. The consensus today is that the Internet killed these sales, I say DON'T BELIEVE THE HYPE!


Let's look at some realities,

Over 30 MILLION people a week watch American Idol; the winner has an almost immediate single release followed by a rushed album. With the hype and marketing surrounding these American Idol winners you would imagine that they could sell 10's of Millions of albums. This is completely not the case. A great selling American idol winner is lucky if they move approximately 2 Million units worldwide. It seems that the public wants something different and sales have dropped significantly. They're never coming back

Based on the 2006 RIAA shipment figures the music business is shipping and selling less than they did in 1996 BEFORE the CD explosion that occurred in 1999, 2000 & 2001. Nay sayers suggest that the digital download business is making up for the loss in CD sales, however the digital business only makes up less than 7% of the total music sales.


In 2006, the best-selling rap album was T.I.'s "King," which sold 1.6 million copies, while the best-selling R&B album was Beyoncé's "B'Day," which moved 1.8 million units. But those are exceptions. Between eroding profits and the shorter life span, most labels no longer push a second single from a rap project.


R&B and rap suffered the biggest declines in 2006 of all styles of music tracked by Nielsen SoundScan. Since 2000, R&B and rap's Nielsen SoundScan numbers have dipped more than any other genre. Other genres have shrunk in sales since 2000, but those musical styles aren't falling as fast as overall U.S. album sales.


What do you do now if you want to be in the music business?


There is no longer a mainstream music buying public. Crossing over means more about your death than it does about hearing music on different formatted stations. You can't get a job at a major record label because they are firing their departments (consolidation) while they have difficulty paying their bills. Major management companies are going broke while they try and find promoters that want to book nondescript boring acts. I investigated Pollstar to see what the top selling concerts were, what I found was enlightening. Out of the Top 50 concerts touring today Beyonce was number 24 and there was not another Black act and absolutely no Hip Hop acts.


The record business created a formula for promoting and marketing music, this formula no longer works. Spending hundreds of thousands of dollars to promote a song is not a good business proposition. Especially since anyone can make a song at home and place it on MySpace.

The major label formula is to create a single, push it and sell the album for profit. Today the consumer wants a good track and a steady stream of good tracks to follow. First and foremost, STEADY! If you're not constantly releasing new good stuff, your audience moves on to something else. And unlike in the seventies, there's TONS of other stuff easily available. Don't put out an album for three years today and most people have FORGOTTEN YOU! Second, the album is irrelevant to most listeners. People focus on song quality as opposed to quantity. Remember the term Album Filler?

People have choice. And they're hard to reach. They want something that is familiar. You've got to get the music into people's hands, oftentimes initially for free. You can't push it, people have to pull it. Which means it can't be sold on hype, but quality And when you get an audience, you have to build slowly, you've got no choice. To try and take a short cut, to sign with a major and be the beneficiary of all their marketing, NO LONGER WORKS! The major can't blow up your indie act, there's nowhere to do it!

Two years ago I had a meeting with a Florida label. At this meeting I told them that the best way to establish themselves was to create good music and a company first so that a major label would take them seriously. The owner of the label told me that he didn't have time for any of that and he wanted to just "jump over that stuff and go straight to the label deal". I wouldn't help them and today they are out of business. No deal, No records Sold nothin.

Wonder if anyone ever even got a royalty statement from my record company?
We never ever got one. (Herman's Hermits).
Apparently one was mailed in 1967 but it still hasn't arrived.
I bet we sold a few records once upon a time. Maybe you bought one thinking that one of the Hermits or Herman himself would get a nickel or something?
I just saw someone mention $1.40. That is more than we got for ALL our combined sales.
We all made records because we wanted to make records. Who knew that there were people waiting to steal all our work and buy houses and pay for bar mitzvahs for people we would never meet?
I am proud to say I never made a record for money. That's the way it was back then.
--
Peter Noone
Herman
http://peternoone.com
http://www.myspace.com/hermanshermitspeternoone
http://hermanshermits.com

WHAT IS LATIN HIP HOP?
By, Heist

There seems to be a huge confusion about what Latin Hip Hop is! We are faced with not understanding the music, which is fast becoming the next Genre to come into its own within the Latin market. The question is do we consider an artist who is Spanish a Latin Hip Hop artist just because of their country of origin? The misconception is great when it comes to this particular topic, not only is it a touchy one but also a little difficult to really remark on. The reason its difficult is because for many years no one really looked at Latinos as major players within the Hip Hop community so we had to go on and do our own thing so as to have a part in the Music itself. When it comes down to the elements of Hip Hop we Hispanics have played a huge part in many of them, and sometimes actually making it our own and Latinos being recognized as pioneers a few.

A great example is the Rock Steady Crew, a troop of Break Dancers that emerged within the Hip Hop community in 1977 and started by Joseph Torres, which was of Puerto Rican descent. The fact that we had a big part of the Graffiti movement and popularity during the 70's also proves we were involved way back when Hip Hop was still at its infancy. During the early 80's we had producers that were deeply rooted within the rising genre and of course we had what some would consider our forefathers of Latin Hip Hop starting out their fledgling careers. Hip Hop is not only music, but a culture within itself, and one that has no particular color or race involved within it. If we only look at sales and those who buy the music we will come to see that we have come a long way from where it all started and it has grown to be accepted by everyone through out the world.

As the music has gained acceptance so should those involved in the industry from both the English and Spanish side alike. We Latinos have been making Hip Hop music since day one, be it producing, dancing, rapping, singing or Dj'ing we have always had a part in Hip Hop. Now the whole thing is what part and how can we determine where we belong? All in all we just straight up belong within the culture, no ifs and or buts about it! Now it's only about recognizing what we have to offer and properly assessing how to manage and market it. As we move into a New era where we will have Latin artist’s making Hip Hop music in Spanish and having the world as their stage we truly need to learn from our past mistakes and correct them so we can rightfully gain the spot we have so long fought to have. We have Hip Hop artists in our community and we have Latin Hip Hop artists as well.

To differentiate we only need hear what they are saying, in all reality it's that simple! Hip Hop is Hip Hop no matter what Language it's in, so you can't really say the artists are different. The only thing different is the language they rap in. Now where it becomes a little tricky is when you have a Spanish artist and he/she raps in Spanish or English or even more confusing when you have a non-Hispanic rapping or singing in Spanish, how would you classify them? We all have our own opinions on this and none of us are wrong but when you sit down and analyze it you can only have one real answer. If you rap in English no matter your origin it's just Hip Hop but when you rap in Spanish you now have Latin Hip Hop even if you're a black artist doing it. It's that simple!

What we need to grasp is that we aren't inventing something new, or reinventing the wheel here! We are just making music we Love for our own people and others who will appreciate it. We are singing or rapping in our own Language and adding our own rhythms to the Beats that we are all accustomed to and have been listening to for over two decades. So why do we not know how to market this? Because the record labels don't pay close enough attention to the origins to understand that the same methods will work if put into use in our own markets. Just change them to work for us and we will be fine. Consumers know what they like and will buy it if it's out there, but if you don't provide the product it will not be purchased. So make it accessible and you will have success. Radio, Record Labels, Marketing companies need to give it a chance and it will work, just don't sit there and wait for the next Daddy Yankee because it will NOT happen. If we take this by the horns and make it work not only will we have a solid genre we will not have a FAD! What we have done so many times is gotten in late and allowed the American Market to come in and take it away from us and turn it into a Fad that fades away just as fast as it came in. So let's do this right this time and lets take control of it, so we too can have a genre that generates Billions of dollars a yr, we are the largest minority in the , why can't we have the biggest selling albums too?

Written by: Heist
www.Perrealo.com
www.myspace.com/heistness
perrealo@gmail.com
Si No Sabias, Nao Yu No!