Getting Indie Music Online

Consolidated Independent director and co-founder Paul Sanders outside the CI offices in East London.Photo: Piers Allardyce

In the age of iTunes, if you want to sell your music, you have to be able to get it online. But to do this, you need to understand a ton of Internet technology. Does this man have the answer?

With the advent of Apple's iTunes Music Store last year, the music industry finally got a compelling commercial alternative to the free filesharing of the peer-to-peer networks. The commercial success of the iTunes store — it recently passed its hundred millionth track sale —and the emergence in its wake of other online music stores has finally established digital download sales as a viable market in the minds of the majors. And the recent spread of iTunes, Napster MkII and Sony Connect from the US to Europe — or at least to part of it — has raised the profile of legal download services over here.

What all this means for record labels large and small — and musicians everywhere, from major-label artists down to those of us recording in our bedrooms — is that getting CDs pressed and onto the shelves of record stores is no longer the only viable sales opportunity. And thanks to indie-label trade bodies like the Association of Independent Music (AIM) in the UK, which has negotiated a number of digital distribution deals for its label members, and the likes of CD Baby and The Orchard which have done the same for unsigned independent artists, the opportunity to earn money from sales at these stores is not only confined to major-owned labels.

But having access to the deals is only part of the story. There's the issue of how the music gets onto the online stores, and this in itself can be a barrier to entry. It's not just a matter of the record label, or even the artist themselves, sending CDs to the online stores and having them do all the ripping and encoding work — just as you wouldn't expect Tower Records to press CDs. What's more, getting music onto the stores isn't only about ripping and encoding audio files. There's also the issue of metadata, or the data which describes the music. This is what enables you to correctly see the track names, lengths, artist names, year of release, and so on, when you're browsing stores, looking at tracks and deciding whether to download them. And if the merest mention of the 'M' word brings on a headache, take heart, there's help available.

Delivering The Goods

Formed at the beginning of 2003, Consolidated Independent is a 50/50 joint venture between veteran Internet music specialists state51 and indie music news and reviews site Playlouder. London-based CI are essentially acting as the digital download supply chain equivalent of the pressing plant and the CD distributor rolled into one. Put simply, they encode the raw audio data that makes up songs, putting it into the formats required by the online music stores and attaching the required metadata, then delivering the results onto each online service with which the label has a digital distribution contract. CI themselves have contracts with the labels, not with the online services, but as a result of these contracts, they deliver data to a range of services, including iTunes, Napster, Sony Connect, Japanese mobile content provider Crosswarp, Entertainment UK, OD2, UK mobile provider 02, and Musicmatch. And they do all of this with their own custom-built software platform.

"We have definitions within our platform of all these different services, and their file and metadata requirements, their packaging format and their delivery method," explains Paul Sanders, co-founder and director of state51 and Consolidated Independent. "We've done the engineering and built all the intelligence into our platform, so we can simplify the process hugely from a management point of view. We haven't yet encountered two online services that have the same metadata requirements — the number or arrangement of parameters, or even what they're called. They all have different ways of naming things, and they've all designed a slightly different format to submit everything in."

The service being offered by CI to independent labels permits the labels to hand over their digital masters to the company and not worry about all the digital spadework that follows. There's still that pesky metadata to get together, but for people who don't know their metadata from their elbow, Consolidated can advise on exactly what data they need to gather and supply in order to get their music onto the online stores.

"The digital side of the music business is a licensing business," Sanders says. "Each point of sale is an exercise of rights, and there's nothing you can do to get around that. And just to make it a bit more complicated, each set of rules is potentially different in every country."

The 51st State

Consolidated's predecessor and associate company state51 began working with music and the Internet in 1994, and developed the pioneering Raft music web site for Virgin Records in the mid-'90s. The company, who operate from a factory in Brick Lane in the East End of London, are providing the technical know-how and the digital platform for Consolidated Independent, while Playlouder are providing the marketing know-how and their connections in the indie community.

Sanders says that CI hasn't approached the majors with its service: "The majors have the resources to do it for themselves. If they don't have the brainpower, they can hire it in. So we don't see much of a need there. And it's a lot less interesting to us, because if you're working for one major it's very unlikely that you'll be working for another. It's a position that state51's been in before, of being effectively an external department [to Virgin, back in the '90s]. It's more of a challenge for us now to put together an infrastructure that services an industry, rather than a single company."

The idea for Consolidated Independent came about when state51 had a bit of a revamp. "We were managing a little network of record-label web sites with shopping, news and mailing lists, that sort of thing," recalls Sanders. "We had quite a good system, but it was limited, so we built a new system from the ground up, with a knowledge of what we needed to build to make it useful for record companies, artists and people who wanted to run businesses around music."

Open Standards

Next, state51 built a web services-based platform using open standards like SOAP (Simple Object Access Protocol) and XML (the Extensible Markup Language used to describe data, and therefore drive databases worldwide). "We need to be able to communicate using open standards," Sanders explains. "The world is moving towards communicating systems using Web Application Programming Interfaces, or APIs. Amazon do it, eBay do it, Google do it — and now we do it. Of course if we went to a small indie label and said 'We can deliver your data and music applications through web APIs over SOAP' they'd look at us as if we were aliens and say 'I just want to sell some music, alright?' But it's going to be very relevant to them in a few years' time."

In fact, he says, using the system that state51 developed, a label can already do something like plug its own mail-order shop into Amazon using the web API. "If a label's using our system to manage their online shop, they can list and sell their products automatically on Amazon. No-one wants to do it yet, because it's too much to manage, but they'll grow into it. If labels could sell their own music directly through the Amazon Marketplace, that would be quite a strong offer. But doing it manually is very time-consuming, and very easy to get wrong. So what we did was build a system that just works, so when labels put their new release in their own online shop they also have the option of putting it onto Amazon and whatever other systems there are that open up.

"Another example is supplying music digitally to iTunes, Napster and the like. Again it's an example of where you do need a very smart platform, because all these services have got their own particular way of wrapping up their music files, and they all demand XML."

Consolidated Independence

Sanders says the applications for the new system were obviously going to be far broader, and state51 didn't feel that by itself it was in a position to get the most out of it. Hence the decision to go the joint-venture route. And state51 already knew Playlouder, as they had provided the technology for Playlouder's web site.

"They're great at marketing." says Sanders. "They've got really strong connections with the indie community. We're small, and we have ideas, do interesting things and make great software. But they have a very different focus; to build a big indie music business. Consolidated Independent really fits into what they're trying to do as the back-end services part. And frankly, for a lot of the independent sector, things aren't possible until you've got CI. You can have any number of great ideas about how maybe you'd like to do indie music communities, indie music radio, indie music rights aggregation, indie portals, and so on. But until you've actually got the music and the information managed in some way, you can't even start."

Sanders says the new company were called Consolidated Independent to highlight the way that the indies could work together on a common platform and use it as their coordinated access point to the digital marketplaces. "I think we're going through a phase when it really does help the indies enormously to pull together. You can't really imagine it working nearly so well if they all tried to do their own thing — particularly on software, because there are very big barriers to entry there.

"The way we've stuctured CI is that the labels that use the platform maintain their independence completely. They own all their data, and CI does nothing with it unless it's instructed to by the label. But also if the circumstances arise, and they agree amongst themselves, they can collaborate, knowing that they're compatible with each other. There's a de facto consolidation on the technology side, in that it's the same van that arrives at the shop with all the music in it, so to speak. Particularly when we're delivering to the digital music services, they want a very simple delivery route. So that aspect is consolidated, even though each label maintains its independence."

The New Supply Chain

The new digital supply chain is essentially about enabling a CD-free distribution path for music. Ironically, then, the current starting point in the chain is typically for labels to post or bike over CDs! "Usually, we use a CD as a source for the master and take a WAV of each of the sound files, then treat the WAV as the digital master from which all the encodings are made," Sanders reveals. "We're dealing with a huge legacy of labels' existing catalogues, and it's just impractical to go back to the studio masters."

However, as new-release material becomes available to the online services, so a new challenge arises: how to get it through the digital supply chain and into the online services in a timely fashion.

"The speed of the supply chain is an issue, so the quicker we can get access to the digital files, the better," observes Sanders. "Then the metadata can be built up round a track as it's developed through the record labels' production and release processes, so the track can be ready to go on the Web for sale as soon as it goes to radio, or even before. That's what the digital services want. They see themselves as competing with the illegal peer-to-peer filesharing services, so they want the music in the online shops by the time it gets out elsewhere on the Internet."

Sanders sees new opportunities and requirements for studios as the digital supply chain becomes more integrated into the labels' thinking.

"There's a speed issue, and studios can obviously be involved in that process by delivering directly into the digital warehouse," he observes. "If labels are happy with the studios delivering the master straight to us, then that's a lot of time and money saved. It's between the three parties — the label, the studio, and the digital warehouse service like us — to get together and work out how to give everyone access to what they need as soon as it's there, rather than go through this manual process and involve couriers. And studios who are thinking about the future should be thinking about how they're going to do that, and how they're going to manage it with their clients. It will be very much to a studio's advantage, I think, if they can offer different ways of delivering the master.

"The other aspect is that there's a big opportunity here for studios to start thinking about how to do a mix that's tailored for the digital services. I don't think the economics of mixing for each encoding format would stack up, but what you can do is try to create a middle-ground digital master that stands up a bit better to the encoding process than a CD master. And I think it's something that the forward-looking studios should be thinking about."