Today I attended the Straight from the Gut Conference held by TIE. This event was sold out, and no tickets were available for walk-ins.

It was a great intro to the Internet industry and a great place to get the latest feelings from the VCs on the current state of venture capital. From the point of view of many entrepeneurs and VCs, this is actually a good time to gauge the quality of the VC firms. The general agreement is that the quality VCs will stay with their selected companies during this economic downturn and the marginal ones will close up shop and get very defensive. An overly defensive fund will end up missing some great companies if they do not continue to invest. After all, good companies are always being created regardless of the economic cycle.

The most interesting part of the show for me was the advertising panel. The people on this panel had real world experience in online advertising including numbers for ad revenues and what new sites that are depending on advertising will need to be successful. One number that I thought that was really interesting is that the CPM (cost per 1000 impressions) for general web sites has dropped to $0.50. The last that I heard, I thought that social networks and their poor advertising connections were selling for $1-3 per CPM.

As the Internet destroys old world economies and forces people to rethink their old systems of distributions, Portfolio.com put together an interesting article on how much music can be worth. The song picked is perhaps the most popular rock and roll song of all time, Led Zeppelin’s “Stairway to Heaven”. Despite its wild success, the song has not been used by the band to get all the money that they can. This careful management of the song and its image has helped to keep it fresh and not overexposed. (At least not as overexposed as it could have been.)

The numbers are surprising. The best that the band could make from the song from the traditional distribution and royalty methods is on the order of $12 or so million. For an ad campaign, they could net $8 million. For use in several different ad campaigns, they might be able to get $12 million or so, depending on how well they negotiate. All in all, $24 million or so. 

Certainly $24 million is nothing to be ashamed of, but it is nothing compared to the album sales. Since the song was never released as a single, fans had to buy the whole album. The song was so popular that it appeared on 4 different albums and DVDs. Adding together all of these sales brings in a theoretical amount of $550 million. The new distribution methods made possible by the Internet and mobile web cannot even begin to cover this. Portfolio.com guesses that ringtones might net $2 million or so.

It is no wonder why the record companies are in a panic. Today’s possible revenue of a few million with the Internet as the distribution model vs the old method of album and DVD sales which brought in half a billion dollars for the most popular songs and bands will cause pain. Ouch!

For all you busy travelers who can’t tune into the radio to find new music or may have forgotten to load your favorite CD onto your MP3 player, Pandora can solve your problems.  Pandora came from the Musical Genome Project.  This volunteer project was to break down all songs in the world into a basic description of its musical properties.  It essentially was trying to define the musical DNA of each song in its database.

Pandora is easy to use.  Surf to the Pandora web site using your high speed Internet connection and tell Pandora what are your favorite artists and/or songs.  It will take your starting list of favorites and match it with other songs by other artists that have similar DNA. All of the songs, the ones you know and the ones you are just discovering, are served directly to you over your personal Pandora “station.”  You can mix the song styles to create your own personal Internet “radio” stations. 

The best part for travelers is that your music is always on the Internet for you.  The only down side is that you are going to need a high speed connection.  Pandora can also have trouble if the server that you are using is configured to prevent streaming. 

Try it out, and let me know how well it works for you.   

Technorati tags: travel, Internet, radio, music, Pandora, personalization, streaming music