In Los Angeles recently, Spotify CEO Daniel Ek talked about the halo effect that artists can experience on the application.  Cultivating fans in far-flung countries, generating upswings in related, non-recording purchases.  A return towards the album, and beyond that, a ripe community of downstream API developers.

Bloggers were lapping it up, even predicting an imminent launch in the US.  But Edgar Bronfman is over freemium, over the idea that somehow freebie music communities convert towards premium in a meaningful way.  Even in Europe, premium subscribers are a small percentage of the Spotify total (less than 4 percent), despite the swell of publicity and demand.

And, for that matter, advertisers are hardly banging down the door – while testing at Midem, the French version was mostly filled with Spotify ‘house ads’ and plugs for label content.  In a similar test last summer in London, the British version suffered a similar problem.

That was an issue Amanda Marks of Universal Music Group publicly raised last year.  More recently, Edgar Bronfman said it out loud, dismissing the freemium approach in no uncertain terms.  The quote has been hashed and rehashed, but neither are playing the tech-chic popularity contest.  They need to license concepts that make money, not win praise from Spotify worshipers and ‘with it’ bloggers.  At this point in the game, looking cool is an expensive endeavor.

But the buoyant hype around Spotify has a deadweight counterpart, an underachieving sibling that rarely gets mentioned these days.  As the drool drips on Spotify, a once-promising Rhapsody is getting spun off, zipped up and mailed away by RealNetworks and MTV Networks.  Even after millions in commitments and huge amounts of advertising.

Yet, subscribers slumped towards 675,000 at the end of last year, a drop of 13 percent year-over-year.  The number itself is hardly zero, but nothing near the initial expectations heaped upon it – and the broader subscription space – in the early 2000s.  Yet this is quite an excellent application, one that was well ahead of its time – but ultimately, a niche play.

So, what again is the difference between Spotify and Rhapsody?  Sure, Spotify is freemium, and Rhapsody starts the conversation with premium (limited trials and teasers notwithstanding).  But strip away those models, and the apps are quite similar.  Rhapsody was just as dazzling in 2002, just like Spotify splashed onto the scene in 2008.  But Rhapsody was always locked in its cage, away from freebie paws.

And maybe that’s the point.  The history on Rhapsody (and similar competitors) is all-too-familiar to Bronfman and other executives looking at the same problem.  And simply flipping the model around on the cloud hardly seems like the solution.

Paul Resnikoff, Publisher.

And that was tough to watch.  This was hardly an ageless Mick Jagger jumping around; rather, it was a cringe-worthy performance on one of the biggest stages imaginable.  Songs like “Won’t Get Fooled Again” and “Pinball Wizard” are operatic challenges, not acoustic lullabies, and these format-stretchers quickly stressed their creators.

Anyway, that was the main event, at least from a musical perspective.  But plenty of other bands grabbed Super Bowl glow.  That included Carrie Underwood and Queen Latifah singing national anthems, and mega-bands like Kiss hawking Dr. Pepper.  Other huge names included T-Pain (in a self-parodying, auto-tuning spot for Doritos); Blur (powering Lance Armstrong through a Michelob Light ad); and will.i.am and Slash (a remixing team for another Who track, this time for FloTV).

Typical big-name artists for a big-name gig, right?  Well, not exactly.  Other commercials offered an interesting wildcard, and that is where bands like Grizzly Bear (Volkswagen), The Heavy (Kia), and Arcade Fire (for the NFL) shined through.  Plenty of dusty classics also grabbed exposure, including songs from ELO (Budweiser), Bill Withers (EA), KC & the Sunshine Band (Honda), and hey, even Maurice Ravel (Coca-Cola).

The list also included Cheap Trick, whose “Dream Police” was changed to “Green Police” to support an eco-friendly Audi A3.  Sellout? Bands are over that stigma, but even so, Cheap Trick is doing this one for the environment (and another ‘green cause’ as well).

Anyway, funny how Kiss can coexist with Grizzly Bear on the same mega-broadcast, and the bands the lie in-between.  Sure, big brands love big bands and classics, but they also love edgier, indie-leaning artists.  That opens the door to some surprises, and a more interesting game for the music industry.

It also underscores just how unpredictable the music business is these days.  In the middle of a chaotic disruption, there really are no rules and lots of unexpected (if far-fetched) opportunities.  Perhaps the big question now is what type of lift these featured bands will enjoy – especially in the absence of on-screen identifications.

Oh, and the football game, the one between the Saints and Colts?  The biggest winner of all is the city of New Orleans, one of the most important musical spots in the world.  All in all, it was a fun game with an unexpected soundtrack.

Paul Resnikoff, Publisher.

What a soup, but who’s complaining?  Consumers have more options for finding, accessing, and collecting music than ever before.  There are countless options for every demographic, budget (including broke) and user need.  Just choose your weapon and start the attack.

Moreover, in the current environment, these formats not only coexist, they are oftentimes intertwined.  A CD is ripped to produce a download, and that download is subsequently ported to an iPod, accessed from a networked stereo system, or stored in the cloud for anywhere access.

On Tuesday, MP3.com founder Michael Robertson offered the most cogent and informed version yet of what Apple is likely to do with its Lala acquisition.  Instead of just throwing iTunes into the cloud and jumping into on-demand streams, Apple is more likely to enhance existing download collections with sky-based access.  “An upcoming major revision of iTunes will copy each user’s catalog to the net making it available from any browser or net-connected iPod/touch/tablet,” Robertson offered, citing conversations with a number of sources.  “After installation, iTunes will push in the background their entire media library to their personal mobile iTunes area.”

So, forget about subscription-based access, or far-out concepts like 10-cent streams.  Those are all roadkill, and according to Robertson, not part of the Apple roadmap. But the bigger point is that Apple is not replacing the download with the cloud – rather, they are complementing the download with the cloud.  It’s still your collection, just easier to access, back-up, and synchronize.

Which supports the earlier point.  Sure, the cloud offers demonstrable benefits over fixed downloads.  But the download itself is still an easy and viable solution for storing and accessing content.  Instead of running into walls, downloads are getting supported by continued technological improvements – cheaper and more compact storage, a better delivery infrastructure, and continued reliability.

Reliability?  It’s 3 am.  Where are your downloads?  Resting safely on your hard drive, and soon, backed up onto an Apple-supplied cloud.  Not floating with a third-party startup like Imeem, unrecoverable if anything goes wrong.  This sounds like a more elegant solution, one that plays into the realities of format coexistence, not replacement.

Paul Resnikoff, Publisher.

Can this modern-day ‘one man band’ really make it?  Tom Silverman, founder of Tommy Boy, is pushing the discussion – and a theme of empowerment – through his artist-focused New Music Seminars.  But Silverman is also making the case for labels or other artist partners.

In a recent breakdown, Silverman estimated that 1,500 releases sold more than 10,000 units in 2008.  Of that, just 227 crossed the threshold for the first time.  “We looked at the 227 and identified that only 14 of them were artists doing it on their own and all the rest were on majors and indies; a little more than half were on indies,” Silverman relayed in an interview with Musician Coaching.

But perhaps Pandora continues to chug along in the black.  Or maybe Westergren, Tom Conrad and the rest surf into frothier times, and get rich on an acquisition.  Or, maybe Pandora truly lives up to its revolutionary potential, and becomes a serious component in the future of music consumption.  Or maybe, all of the above.

Just recently at CES in Vegas, Pandora was suddenly a big part of the future of in-car entertainment.  Among other things, near-term plans include a smart, voice-controlled integration into myFord Touch, and its embedded Sync upgrade.

Sure, the automobile industry is in the toilet, and the next-generation dashboard seems like jewelry on a dying patient.  No small point, as US-based car sales are slogging along at early-80s levels (10.4 million in 2009), though eventually, newer cars (and their dashboards) will replace older clunkers.

Automobile sales are expected to be sluggish in 2010 as well, though oddly, the dashboard is leaping forward.  Terrestrial and satellite radio providers used to worry about the iPod and talk-time on mobile phones, but now, internet radio is also creeping into the picture.  Why wait for WiMax or factory-installed mobile broadband?

Pandora isn’t waiting, that’s for sure.  The iPhone helped to change the entire growth trajectory at Pandora, and now, that momentum is spilling into the dashboard.  But even before the next-generation dashboards arrive, music fans are connecting their iPhones into their dashes through FM transmitting add-ons (Griffin’s iTrip, for example), or more primitive connections through an in-dash CD player or tape deck.

Indeed, the iPhone (and other smartphones) are the gateway drug for the automobile, skipping ahead of internet ubiquity.  What Ford is introducing is simply a more sophisticated, safer, and cooler Pandora integration, one packaged into a broader range of mobile-supplied apps (and other, non-mobile features like sophisticated navigation and in-car WiFi).

Beyond the smartphone app, the future will find Pandora more tightly integrated into the dashboard, right as the engine starts.  But in 2010, Pandora is leveraging its tremendous iPhone traction into one of the most important environments for music consumption.  It’s a giant baby step, and potentially the next big game-changer for Pandora.

Paul Resnikoff, Publisher.

Passman just released his seventh edition of the book, and the shifting nature of the business demands regular updates.  In the 90s, those changes took the form of shifting deal structures, newly-passed laws, and other modifications to an otherwise steady business and legal structure.  But in recent years, all of that has been tossed out the window, and Passman now faces an incredibly difficult challenge.  Namely, how does anyone write an authoritative book on a business that is in the middle of a tornado?

One answer is to simply describe the latest legal details and developments, as they stand at the time of the book’s pressing.  And, that is exactly how Passman approaches the problem.  In this 2009 edition, Passman dives into a range of new arrivals, including digital and mobile formats, 360-degree deal structures, and shifting rules from Capitol Hill (like Copyright Royalty Board decisions).  But what happens in 2010, when the ink starts drying on newer deal structures, fresh precedents emerge, andmore digital formats appear?

Actually, that is a problem that Passman quickly identifies in the current edition.  Before delving into a range of different digital formats (p.163), Passman warns that there’s “no guarantee this won’t be out of date fifteen minutes after I finish the book,” a half-joking disclaimer that underscores the problem.  But can the reader – an artist, executive, fellow lawyer, manager – truly be confident that certain details are up-to-date?

Well, it really depends on the specific issue.  For example, Passman devotes lots of attention to publishing, team-building, touring, and merchandising, areas that are steadier elements in the storm.  More boldly, Passman also discusses the latest in 360-degree deals and digital formats, though these details represent the best information available at this time – ie, late 2009 – and should be treated more as a guidepost than rule of law.

Either way, All You Need is hardly a lightweight reference, despite the lightweight tone of the author.  This is an incredibly complicated business, and few have the capability to offer such a comprehensive guide without writing a Brittanica companion set.  And, at $21 (on Amazon at least), this is an easy investment decision.  In a few hours, the book offers a fantastic top-level, and at the same time, delivers a great reference for future problem-solving.

But perhaps ahead of the eighth edition, or in lieu of it, Passman might consider a totally different approach.  Why not develop a more dynamic, online guide, complete with up-to-date revisions and developing sections – in other words, a living, breathing reference that changes in real-time, as needed?  Maybe the online reference could coexist with the print edition, and even require a subscription fee for access.  Passman would undoubtedly have to experiment with monetization approaches (buy the book, get a free online account, etc.), though the online guide (or companion)might help to create a more complete and authoritative ‘industry Bible’ for modern times.

Paul Resnikoff, Publisher.

Despite the rush to connect and stay engaged with fans, plenty of artists have been wondering aloud whether the internet is stealing quality creative time.  That latest is Duran Duran bassist John Taylor, who recently discussed a number of issues created by the internet.  “When artists today are asked to Twitter their every thought, their every action, to record on video their every breath, their every performance, I believe they’re diluting their creative powers, their creative potency and the durability of their work,” Taylor stated, in a speech excerpt published by the BBC.

Taylor questions whether the art is suffering, a funny thought coming from an 80s pop superstar.  But Taylor also noted that fans are increasingly diving into the deep catalogs of yesteryear, a luxury unavailable to music fans of yore.  Sounds great, though Taylor surmises that listening to past gems could be shifting creative impulses away from the present.  “This relative lack of need for current, innovative culture can cause… the innovative culture to slow down, much as an assembly line in Detroit slows down and layoffs have to be made when the demand for a new model recedes,” Taylor continued.

Now, picture this same collection in the palm of your hand, obtained for free and also completely portable.  Perhaps in something that resembles the USB stick of today.  Or, for a modern-day example, just think about the iPod classic, and its wildly-expanded storage capabilities within five or ten years.

Can these two coexist?  Or does free win once again in the cloud?

Earlier, the question posed was whether a locally-stored collection will simply suffice for most music listeners.  After all, in 2009, a stuffed iPod classic contains more music than most fans can reasonably digest.  And something like 160GB will seem laughably small within a decade.  But the shifting variables of storage and accessibility are also ingredients for an ad-hoc cloud that will be just as difficult to monetize and control.

In fact, these ingredients are already getting baked.  Think that MP3s will simply be irrelevant at some point in the 2010s?  Perhaps, but maybe the question itself is misguided. After all, who cares if MP3s are sitting on a hard drive somewhere – occupying marginal storage volumes – and if that collection is simply replicated in the cloud by a trusted third-party?  Or, alternatively, if listeners are simply porting songs directly into the cloud, secure that files are safe and accessible on a remote server for life?

In the end, the details are unimportant, but regardless of the mechanics, it will be tough to put a toll booth in front of the cloud.  The reason is that free options remain so easy, and free often goes hand-in-hand with flexibility (files are playable anywhere) and security (no outside company to trust).  Again, look no further than 2009, where an application like JukeFly can scan and replicate your collection and make it accessible from any PC.  Lala’s Music Mover does something similar, and the company is soon enabling collection access from the iPhone or iPod touch.

Outside of this specific discussion, a huge battle is brewing between Hollywood, ISPs, various government agencies like the FCC, and consumer rights advocates like the Electronic Frontier Foundation (EFF).  Currently, three-strikes disconnection solutions are getting more breathing room in Europe, but the broader question is whether free acquisition – and portable access – can truly be contained or monetized.  So far, the prospects are ‘cloudy’…

Paul Resnikoff, Publisher.

But, they’d also quickly shrink unnecessary overhead, ditch ineffective legacy commitments, assume nimbler stances, and refocus all of their energies towards digital formats and concepts.  And, start building companies designed to survive in the 2010s.

Sounds like sheer lunacy to a major label executive, especially one specialized in physical formats.  But the situation plaguing the traditional recording industry is also dragging the newspaper business as well – and eventually, other forms of media like film.  “You have to kill the print edition, stop the presses tomorrow,” Marc Andreessen recently told Charlie Rose in emphatic terms.  “The investors have completely written off the print editions, there is no value in these stock prices attributable to print anymore, it’s gone.”

Actually, investors of companies like Warner Music Group and EMI Music might recoil at a physical-free shift, and analysts like Richard Greenfield of Pali Capital have been pointing to stabilizing losses on CDs.  Whatever that means, but the best CEOs have never let Wall Street run the show.

So, get smaller, accept lower revenues, and suffer acute pain?  Entrenched companies are usually awful at this sort of thing, especially when the legacy is so lucrative.  Clayton Christensen discusses this at length across numerous publications, including The Innovator’s Dilemma (1997).  If only the CD would stop selling one day, cold turkey, instead of eroding over a decade-plus time period.  That would abruptly force the issue, and demand immediate change, instead of requiring executives to straddle two totally different eras.

Just recently at the Digital Music Forum in Hollywood, executives resisted calls to shrink their footprints and overheads, pointing instead to 360-degree deals and big brand-building partnerships with artists.  Somehow, the concept of a scrappy, smaller business approach was strikingly unattractive.

But wait, labels are already shaving their overheads, cutting employees, slashing big salaries, and decimating promotional budgets.  So, what’s the difference?  The difference is that CDs still require resources, real estate, distribution networks, transportation capital, and relationship maintenance, despite a serious shift towards digital formats.  Meanwhile, parts of the digital riddle are being figured out – some money comes from paid downloads, users are engaging with authorized on-demand platforms, and label groups are getting smarter at marketing their artists online and through mobile channels.

So why not drop the physical overhead, and force the company to figure out a viable digital model, one that signs, develops, markets, and sells acts in a totally different way?  Or, includes smart 360-degree relationships that revolve around the most lucrative and controllable areas of the business, to the extent those can be arranged?

But wait one minute. Actually, dropping the CD cold turkey is too extreme, simply because digital formats allow direct-to-consumer delivery of physical product, for those that want it. Whoever wants the disc, or vinyl, or cassette, gets the disc, or vinyl, or cassette – based on an actual order.  Classical-focused ArkivMusic is one company playing that model, and, direct-to-fan ‘channels’ like merch tables remain great places to sell collectibles like vinyl in small doses.  So, customize it, play to the increasingly niche-oriented physical buyer, but forget about mass brick-n-mortar foot traffic.

Or, take it a step further, and cater to the biggest outlets, in limited situations.  AC/DC at Wal-Mart, Christina Aguilera at Target, and hey, occasionally a whiff like GnR at Best Buy.  But not the main focus and thrust, simply a more predictable, one-off approach that includes guaranteed foot traffic and well-established stars.  In other words, not a scaled-out, physical machine that requires steady overhead, shipping logistics, and inevitable miscalculations on demand.

But, why give up billions, how does that make sense?  In 2015, labels will have either been forced into obsolescence, or totally reinvented around different formats and consumption habits.  They will either be shells for the catalog that remains licensable, bought and traded, or a meaningful contributor – and profitable beneficiary – of the music experience.  But they will not be minting billions on CDs, opening the uncomfortable question of when a clean break needs to be made.

Paul Resnikoff, Publisher.

On that note, when it comes to major label anti-piracy strategies, the results have been mixed at best.  Consumer lawsuits have been ineffective and probably damaging, startups have come-and-gone after paying exorbitant and crippling licensing fees, and ISPs have largely been unwilling to police their networks.  But is Hollywood any closer to figuring out the complex riddles of the digital era – at least in a manner that makes money?

The Motion Picture Association of America (MPAA) has been involved in its own high-profile anti-piracy pursuits, including a bull-charge against the Pirate Bay.  But this is an industry that has yet to declare war, and in many ways, Hollywood seems just as vexed as the music industry in terms of its containment strategies.

Perhaps signaling confusion, MPAA chairman Dan Glickman recently announced his intentions to leave the organization in September of 2010, a decision that largely confirms earlier reports.  “My guess is that I’ll end up in the nonprofit or academic world,” Glickman told Politico on Sunday.

A number of different reasons are floating for the exit, though a confused anti-piracy charter appears to be one culprit.  Glickman predecessor Jack Valenti lasted for 38 years, but exited just before disruptive storm clouds started gathering.

Smart move, because this issue could drag Hollywood for the next decade, and devour otherwise-qualified executives in the process.  Just recently, C|Net pointed to the firings of several MPAA executives, including a pair of anti-piracy specialists.  That, according to the report, is part of a “dramatic restructuring of the piracy-fighting operations,” a process that could eventually consume the broader organization and the film industry.

Perhaps Hollywood is doomed to repeat at least some of the mistakes of the music industry, though a bigger anti-piracy gun is great news for the smaller RIAA and its major label members.  On one hand, the whole strategy stinks, and the recording industry (and eventually Hollywood) needs to smash its physical production and control-oriented approach.  But agree or disagree with the strategy, both organizations want protection-oriented support from legislative, legal, and enforcement channels.  In that light, Hollywood could be the perfect set of coattails for the RIAA to ride – if they arrive in time.

Paul Resnikoff, Publisher.