This site is a blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.
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This is a re-post of an article I wrote a couple years ago about what I learned through my own experiences with music festivals and conferences. It was also picked up by the folks at Disc Makers, who put it up on the Echoes blog. With SXSW already in full swing, I thought now was a good time to revisit some of these music festival “do”s and “don’t”s.
The Music portion of SXSW starts soon, which makes me want to share some of my experiences at music conferences. Conferences were never exactly my forte, but I’ve come to view them very differently over the past several years. Below is a summary of some of my first conference experiences. Let it serve a perfect example of what NOT to do.
When NYU’s Independent Music Festival rolled around in 1994, I was amazingly excited … and amazingly clueless. At the time I was a member of an eight-piece funk band, an NYU student, and someone who believed whole heartedly that I would be able to “make it” as a musician even though I had never defined what “making it” would entail. I just knew it sounded better than getting a real job.
I sat in the audience for a few of the panels, I signed up for some demo critiques with independent label A&R people, and was generally bewildered that there could be so many musicians in the world.
You see, that last part was important for my perspective. Sure, I knew a ton of musicians. But it always felt like we were a very small subset of the population when I was starting out. The first time I saw a thousand musicians milling around I was … speechless. I vaguely remember thinking, “Oh, this is why everyone assumes I’m stoned when I mention that I’m a bass player.” At the time there were other reasons for that assumption, but that will come up again later.
I began to see the different musician stereotypes emerge:
- The guy with the black Zildjian t-shirt: drummer
- Long greasy hair, high top sneakers, and acid wash jeans: metal band. This was 1994. Strangely, that hasn’t changed too much.
- The collared shirt tucked into belted jeans with tennis shoes: horn player.
For all our creativity and originality, it’s funny how many of us choose to wear a uniform.
Here are some things I didn’t do:
Find like-minded peers. Often the real value of these conferences is that you meet like-minded people who are in situations similar to yours. It’s not hard to find them; they are in the audiences of the panels or out in the streets or… well, everywhere.
Forming relationships with other musicians can be as important – if not more important – than getting to know executives who have very sexy business cards. At my first conference I spoke to no other musicians. I didn’t know where to start. Think about it though: other musicians who are doing well (locally or regionally) tend to have a hell of a lot more practical and ground-level contacts and advice that you can use immediately than executives have.
Present yourself and your product well. At my first conference, I made a dash for the independent label demo critiques. I had a hot-off-the-tape-deck, 2nd generation dub of four of the best songs from my band’s last live show. I quickly hand wrote my contact info on the cover and included the names of the songs. It didn’t occur to me (how could it?) that as quickly as two years later I would be getting demos sent to me as a major label employee, and that I’d be ignoring the ones that were presented this poorly.
I don’t recall 100%, but I believe that …
- I was wearing one of the two pairs of pants I owned at the time that were stapled together where they had ripped. Yes, stapled.
- I was wearing a baseball jersey with the words “Junkie Coach” stenciled across the front of it (oh sweet, sweet irony).
- I was either intoxicated or hung over.
Needless to say, that was how I presented my band and myself to a potential independent label partner. I can only imagine that looking into my red-rimmed eyes, the label executive must have thought “This kid is more likely to make progress eating a bale of Twinkies than making progress in life, let alone the business…”
Have a plan.
- I had no clue about just how many musicians there were.
- I spoke to no other musicians at the conference.
- I dressed like I was an extra in a Cheech and Chong movie, and I was far too impaired to be effective at networking.
- I handed out a sloppy, hand-labeled cassette tape long before I had a product that was ready to be promoted.
So- what should you know about SXSW and what should be your plan? (I get asked this a lot for some reason) Here goes–
If I can impart anything about SXSW, I would say, “It’s big.” Massive. It’s the size of any three other conferences combined (at least the ones I have been to). It is important to consider who you are in a social settings and who you are going to know before going to any big conference.
Who am I? I’m a wallflower. I’ll stand on the edge of a circle of people and not know where to begin or even where to put my eyes, and I have a general distain for small talk. If this sounds at all like you, and you won’t know many people down there, it may be a good idea to schedule some appointments beforehand – but not too many, so you can allow for spontaneous meetings and random events to pop up … and they will pop up. I can’t tell you how many times my best experiences have come from bumping into someone on Sixth St who said something like, “Somethingorother.com is throwing a party, and Metallica will be performing for only 13 people, and there’s going to be lobster rolls and animal balloons for everyone!” Roughly 2 out of 3 of these insane stories are actually true.
Even if you are that special someone who could comfortably mingle and shoot the shit at an insurance seminar and will know a ton of folks at the conference- it is probably good to reach out to people and schedule some meetings a few weeks out with people you want to connect with- the whole conference can be a bit of a blur just on the pure volume of people you meet.
2) Pace Yourself:
Yes- there will be parties that go until dawn the first night. And the second night… and the third night too… Pick and choose your battles for the late late nights and the excessive consumption- it will be there whenever you want it. No judgments – you just want to be able to turn on the charm when you need to and I don’t recall a hangover ever helping with that.
This may seem like a weird suggestion but – find a quality group of people and enjoy Austin Texas. Try the BBQ, take a run along the river, take a few hours to get off the main drag and see some of the sights- I highly suggest seeing the Congress Avenue Bridge bats. Sitting down at a meeting in a restaurant is one way to get to know someone but sharing an experience unique to a city that you are not from can really help cement new relationships.
Have fun out there,
Tom Silverman is the founder and head of TommyBoy Entertainment. Throughout his amazing career Tom has worked with and broken artists like De La Soul, Digital Underground, House of Pain, Queen Latifah and Afrika Bambaataa. In addition Tom helped revive the New Music Seminar and is now one of its principal executives. He’s been kind enough to allow me to feature his candid thoughts about the changing music industry on the Musician Coaching site on several occasions. In January of this year, he shared some insights about what he termed “The Music Business Resurrection.”
As we gear up for the 2012 New Music Seminar in June, Tom talked to me about some of the ideas that will be shared at this year’s event. He also expressed his views on what artists, labels, publishers, technologists and everyone else involved in the industry should be doing if they want to grow and continue to find new and profitable opportunities.
Thanks so much for taking some time, once again, to chat with me, Tom. What’s in store this year for everyone at the New Music Seminar?
The seminar has taken a big turn to taking a leadership role in driving vision for the music business and returning control of the conversation back to the creators. Technologists have controlled the conversation for at least five years now, and most of the conferences that exist now are sponsored by the technology companies. This one is sponsored by mostly creative companies, like SoundExchange. It’s actually the first SoundExchange Digital Broadcasting Summit. Last year, SoundExchange collected over $350 million and distributed it to labels and artists equally. It has become one of the biggest new sources of revenue for labels and artists in America. This year, the amount of money collected will be well over $400 million. So, we’re approaching half-a-billion dollars in digital broadcasting revenue. And that’s SiriusXM, CBS Interactive, Music Choice, iHeartRadio, all the webcasters. There are so many different people that contribute to that. But the biggest ones are Pandora and SiriusXM, though there are many more, and it’s a growing area as radio listening shifts from FM to online and smartphones.
BMI and SESAC are also sponsoring the Seminar, representing songwriters and the creative community. And there is a bigger emphasis on songwriters and publishers at this conference than at any of the past conferences. It’s much more business oriented, because the problems that are affecting the artists at the artist level have their root in the economics of the music business. And until the economics of the music business change, the lot of the artists themselves won’t change very much. We’re exploring all the new ways the business can start to be profitable again and trying to set new goals for what’s possible for the music business.
And you, personally have an interesting world view. What does the new music business look like, in your opinion?
Well, I’ve done a little research using the RIAA gross sales numbers at retail, and they say that the music business is about $7 billion in America. But when you look at what labels get at net and remove the cost of goods sold and mechanical so everything is apples to apples, you’re really looking at about a $4-bilion business in America, which isn’t that big. In 1999, that number was double that, or more – somewhere between $8 and $9 billion, which is $14 billion at wholesale. And the world business was supposedly around $37 billion using the IFPI numbers. Now it’s down to around $17-$20 billion. And the U.S. share of that has declined from, at one point, 40 percent of that to now 25 percent or less.
What those numbers are indicating is that we have a lot of things that are changing. And I think we have to look at the business in a new way so we can expand what the business is and reach numbers we couldn’t reach before. When I say the economics of the business are upside down, I mean the risk that investors in music – and for the most part, the investors are labels – are taking is not commensurate with the return on that investment. When you have a high-risk investment, you expect a high reward. And unfortunately the reward for the winners – the people that invest in people like Adele, etc. – is not high enough to justify the losses and the risks they take on the others.
It’s a very difficult business considering its high risk level . Every time you sign an artist, there’s a huge chance that artist will fail. You have to look at it as more of a venture capital business. And with a venture capitalist business, you have high risk, but you also have high return. If you invested $100,000 in Instagram, everyone could do the math and find out what it meant when it got sold a few weeks ago. That’s not happening when you hit with someone like Adele. You’ve invested millions, and then when it sells 20-million units – and when that’s the only one of its kind in over a decade that’s done those kind of numbers – what’s the return on that? And then, often the artist comes back and says, “I want to renegotiate. I don’t want the same deal going forward” in spite of their contract. When a venture capitalist makes a deal, the venturer can’t go back to the venture capitalist and say, “I want to redo the deal.” But that’s what happens in our business. And the contracts only last for six or seven years, while the venture capital contracts last longer than that and cover everything, not just records.
You have to look at that and say, “How can we make this business more interesting to investors and drive money into the music business again that will trickle down to artists? How can we get more people to invest in artist development so that more artists will be able to grow and create music?” I think we’re starting to see how that can happen. And it’s not necessarily going to be tied to record sales. We’re all caught up in record sales, and people still talk about “the record business.” But at the New Music Seminar we strike the word “record” from it and replace it with “music.”
I do remember that the first incarnation of the re-launched New Music Seminar I went to was very tech heavy. It was MySpace Music and TuneCore, which was a relatively new company. It was all these people providing technological solutions to age-old problems, and, in my opinion, there really was this overture of, “Anybody can do this now. The barrier to entry has been removed.” But that didn’t pan out.
If you’re doing something that’s more publisher and songwriter oriented, which topics of conversation are going to be the ones most in debate? What are you hoping your average musician will come away with this year?
We used to have 10-12 panels in the old days. We now have 22, and 20 intensives – the lectures and keynotes – on top of that. Plus, we’re doing a music festival for the first time, which will have about 150 artists performing in over 15 venues. All of that is new. The scope and the expanse of what we’re trying to do is double or triple of what we’ve ever tried to do before, both in terms of the music performances and the speakers. We’ll have 150 people speaking this time, and everyone’s focus will be on business.
And the focus won’t all be on songwriters, because really we’re increasing the total number of movements we have by three times. So, we’re adding a lot of new movements to the ones we have had before. There will still be A&R, producers and artists movements. But we’re also going to go beyond that. For example, we have one on video innovators – artists that are breaking through YouTube. And that’s a good example of what we talked about at the first seminar. But it didn’t really start to happen in full force until last year, when Mac Miller entered at #1 with only 27 spins at radio. Benji Grinberg will talk about how Rostrum Records has been able to be successful and sell over 140,000 units the first week for an artist with only 27 spins at radio, but over 30-million views on YouTube.
There are a lot of new methods to generate revenue now that didn’t exist even a year or two ago. The monetization of YouTube, getting the CPM up, advertisers investing in the Web and that money trickling down to artists and their investors is a new area.
Let me ask you some hot questions around that. There’s an issue with Vevo now, and it has a lot to do with branding. Artists will come to me and ask, “How do I get on Vevo?” And it’s usually through the distributor. But every time I read about how that splits, there seems to be a publishing question mark there. Do you have any first-hand experience with that? Do you think Vevo is actually helping artists break?
Vevo is a way to drive the monetization of YouTube up higher. And I think Vevo was very important in showing people you can get more than $10 CPM for music instead of $2, which is what the CPM was pre Vevo. They also spend a lot of time educating brands and advertising agencies on how that can all happen. And now Google is doing a much better job selling advertising as well.
So, I think what Vevo’s done has been really great for the business and will eventually trickle down and be great for artists. The majority of the stuff is the big stuff right now. And that’s not where these developing artists are making money. Mac Miller, Hoodie Allen – the most recent success – and Alex Day in the UK, who was #4 during Christmas week, were not Vevo artists. So, it’s not Vevo where artists are breaking. But it is Vevo that helped drive the revenue up. Alex Day makes more money from his ad share for his video views on YouTube than he makes from selling music – or at least as much. We’re seeing that trending in many places. And we’re going to see the revenue that artists are making off their share of plays increase. That’s promising.
But that’s not the answer I’m talking about. That’s not going to take our $4- or $7-billion business back to what it was in 1999, where they claimed it was $14.5 billion at retail. I’m looking for it to be $30 billion. How do we get it there when we’re sitting at $7 billion? How do we quadruple the music business in terms of dollars? The way that’s going to happen is through models more like Cricket, where the Cricket offering is one that doesn’t generate Spotify-sized monthly revenue on a per-person basis to the artist, but it taps into the passive music buyer.
The number I’ve heard recently is that there are about 200-million music buyers in the world. And there are about seven-billion people in the world. So, if we can make that 200 million grow to 250 million, we can make a little bit more money. But that would only take the net world music business from $16 billion to $20 billion. It won’t take it back to its peak in 1999. It will just make it a little bigger. If we can get the people who are buying music to buy more music, maybe we can push it a little further than that. And if we can get them to spend a little more money, we might be able to take it even further than that.
But none of this will take us to a 100-billion-dollar worldwide business. The only way we’ll get there is by finding a way to monetize passives. Because, the passives outnumber music buyers – there are six billion passives vs. 200 million music buyers. There are six-billion activated cell phones in the world. And there are 1.2-billion smartphones activated now, which means smartphones that are actively being used, with active subscriptions that have been paid for. The trend everywhere is moving towards smartphones. The entire world is going to open up to that level of accessing music.
Cricket will have most of their phones within the next three or four years, include music as part of their offerings. You’ll get unlimited downloads to your phones as part of your subscription. You don’t have to pay or opt-in. So, if you want a song, you can get it. Of course, you can only get it on your phone and can’t do anything with it. That’s why it’s less expensive, and they only pay us less than three dollars a month for that subscription out of the $55 charge. That amount will add up. And there will be theoretically 10-, to 30-million people that might have phones in America that have music as part of them. But they won’t even feel like they’re paying for the music, because it will be so inexpensive that it will feel like free. But they will have access. And some people won’t use it at all, some people might download two or three songs, others might download a million. It doesn’t matter. We’ll be generating revenue from all of them, which will be new revenue for the music business.
You mentioned there are about 250-million music purchasers out there.
The number I heard was 200 million. But I’d say it’s between 200 and 250 million. It’s a hard number to pin down, but no one thinks it’s higher than that. And I’m referring to people that have ever bought music in the last decade, worldwide.
What’s daunting to me is that by my calculations – and I’ve been doing research on this as I’ve been preparing for my own talk at New Music Seminar – there are about 63-million musicians in the United States alone. Roughly one in five people are musicians. And this is based on the U.S. Census and a study NAMM did on the number of musicians per household. Mind you, it’s really next to impossible to calculate how many of those people are aspiring vs. how many of them are professional.
And I think those numbers include anyone who owns a musical instrument. For example, I have guitars but don’t play guitar anymore, so I would fall into that category.
Yes. Clearly, those are people that own musical instruments too. Even if the number is a tenth of that, those are kind of long odds.
So, assume those are the people that buy music. What if those were the only people in America who buy music? Say 60-, 70- or maybe even 80-million people buy music, and another 120-million people around the music buy music. That’s your number right there. The rest are happy with the radio or just listen to whatever they hear around them.
I think that we in the music business are so passionate about music that we assume that everyone is as passionate as we are and has similar music-buying habits. But I don’t think that’s the case. If you want to step back far enough and help this business become a $100-billion business, you have to activate 3- or 4-billion people, even if it’s only at $1 per month. And then you’ll generate an extra $36 billion on top of $15 or $20 billion that’s there, and you’ll be in a $50- or $60-billion business, which compared to what we’re in now is four-times bigger.
The way the music business can really tap into significant revenues is going to be through mobile phone providers. That needs to be a big priority for us in the industry: How do we expand the business by working with mobile phone companies to create systems that work for them and also work for us? I’m not saying that’s going to be easy, because dealing with publishers and labels never is. But there needs to be leadership on the label side trying to drive that.
Do you think the label system is prepared for that kind of seismic shift?
Big time. More than ever before in our history. If you were going to tell somebody at Universal or Warner Bros., “I could make your catalog be worth three-times as much in 10 years, what’s that worth to you?”
They’d say, “What do I have to do?” If that means hiring specialists to work phone companies and mobile service providers in every territory in the world the way they work radio stations to get records on the air, that might be a good investment in the future. Or maybe that’s something that RIAA should be involved in. I’m not sure. Or maybe that’s something for the IFPI, instead of 100-percent protectionism. How can we grow the business?
SiriusXM has 22-million subscriptions. And if it wasn’t for Detroit, they probably wouldn’t have a million or two million. It’s the car companies that are driving SiriusXM subscriptions. They understand that. We need to understand that as a business, we have to find a way to attach music to other things that can generate revenue for us that we’re not getting right now and monetize music much more fully than having to have sales be the sole driver, which is really a limiting factor.
I have a couple questions. Spotify is a hot-button issue right now with a lot of people because royalty statements have been disappointing to artists.
Why are they disappointing? You’ve probably talked to a lot of artists about this, but I just don’t understand why artists feel any differently about Spotify revenues than they feel about CD sales or track downloads on iTunes. Why are these any different from any other kind of revenue they’ve gotten in the past?
I guess a lot of artists are still married to the old model. I can’t speak to exactly why. But most artists I speak to through my site and otherwise seem disappointed by what they’re getting per play. And maybe that’s silly.
Are they getting more per play when they get played on FM radio? They don’t get anything from FM radio, because FM radio in America doesn’t pay any artists. Anything they get from a streaming service – even if it’s a penny – is better than what they get from a play on a traditional radio station. So, finally all that SoundExchange money we’ve talked about is new revenue that is coming from digital broadcasters. If all broadcasting was digital broadcasting, that could be billions of dollars in new money.
You only have 500,000 – 600,000 subscribers – and we don’t know the exact numbers – on Spotify. It doesn’t have a million subscribers yet in America, so the revenues are going to still be small. But when that number gets big enough – somewhere between 11 and 15 million – the amount they collect should be about the same they receive from iTunes in America.
But if this is done through a label and the artist’s balance is unrecouped, that money is going to go against their unrecouped balance, and they won’t see it, just like they don’t see their money from CD or iTunes now. If an artist is in an unrecouped position, they won’t get paid no matter what happens. Because the investor has to get their money back before the artist can make money.
That’s what I don’t understand. No artist has been able to articulate to me what the problem is or where they see an issue. How is money from Spotify or any other subscription service different from money that comes from iTunes or from WalMart? They get their 15-percent of all of it after the investor gets recouped. So, they’re getting their percentage of the pie at the same level as they’re getting it everywhere else, except it’s based on streaming.
It’s interesting when you look at it alongside what we’ve talked about with the future of the music business. What you’re really talking about is not only growing the business in terms of selling more music, but also growing the businesses and platforms that could be the delivery mechanisms for music in the future, such as mobile phone providers, car manufacturers, streaming music services, etc. That seems to be the evolving trend of the music business.
I think that’s one trend. Another is monetizing attention. One of the things we’ve learned from Instagram, Facebook, Google and everything like that is that we’re in an attention-based economy: Attention equals dollars now. If you look at the attention that’s garnered by the artists and music that the labels control, it seems like there should be a better way to monetize that attention. Labels are so focused on selling albums and secondarily, music, that they aren’t really focused on monetizing the attention and focus that those artists and that music create. If they created relationships with artists where they would manage and monetize the relationships artists have with fans and the impressions the artists and their music create in the world, the value of that would probably be 10-50-times greater than just selling records.
For details about the upcoming seminar , which takes place June 17-19 in New York City, visit the official New Music Seminar website. If you haven’t already signed up, you can get a 20% discount by using the code NMSNYMC2348 at registration.
Also, stay tuned for more thoughts from Tom Silverman in the coming weeks.
Benjamin Costantini is a conference manager at the midem music festival, an annual conference that takes place in Cannes, France where music makers, technology companies, a variety of brands and other talent come together to meet and share music and information about the industry. With many years’ experience in the Arts and technology, Benjamin got his start in music when he founded and managed the indie Spanish record label La Crème Records, a shareable CC-driven record label where he manage several bands. He also founded Objetivearte, a company dedicated to research support services.
Benjamin took some time to talk to me during the festival – which I had the pleasure of attending earlier this week – about how he got involved with midem and its importance to the music industry, how artists can maximize the benefits of attending and participating in music festivals and where he sees the music world headed in the future.
Thanks so much for taking some time to share your experience, Benjamin. How did you first get into the music business, and how did you get involved with midem?
I founded a pro-DIY record label in 2004, which happened to be identified in Spain as a grassroots movement for free culture advocacy. I’ve been managing several bands and even toured China in 2006 as a road manager. I was recruited by midem in 2011 as a conference manager.
What is the concept behind the midem conference, and what sets it apart from other festivals and conferences throughout the world?
MIDEM is the largest global music conference and has been a must-attend event for labels, publishers, distributors and other professionals for decades. It is broadening its scope more and more to embrace the whole ecosystem of the new music business, with tech companies, start-ups and developers, brands and ad agencies, artists, managers, marketers, etc. What really sets MIDEM apart from other events is its size and how profitable it is for business, networking, learning and forecasting.
What advice do you have for artists who wish to attend midem or industry events in general?
An artist should plan the trip well in advance to ensure a great return on investment. The best option would probably be to raise funds and perform live, get a great marketing campaign running prior to the event to raise awareness and never, never come alone. You need to know some people there to maximize connections. And if you don’t know anyone, travel with someone like your manager. Also, you need to carefully read the schedule of events, attend the conference and panels that matters to you most and jump in to connect with the speakers at the end of their talks. They love it!
What are some of the things artists should be doing to promote themselves, get attention and build relationships before, during and after a music conference like MIDEM?
With the midem conference in particular, there is a great tool called midemconnect, an online database that enables to contact directly with other midem participants. The midem off programme is also a great opportunity to showcase your music in one of the many bars of Cannes. There are also different competitions where artists can submit their tracks for consideration such as the music pitch sessions or the midem off showcase competition, both powered by Sonicbids. And if you really want to create a buzz, bring your ukulele like Amanda Palmer did in 2011 and crash the conference!
Are there artists or companies that you’ve noticed have been really successful at promoting themselves at the conference in past years? What would you say they did that separated them from others who did not do so well?
I wasn’t working for midem before the past couple years, but I feel that what the Pavilions do is great. Some countries are also starting to invest a lot to sponsor young talent so they can come to the festival.
Do you have any specific guidelines for artists when approaching music industry people at conferences and festivals?
Be professional. Think of yourself as an entrepreneur first, then an artist. Don’t be ashamed to talk to people outside your network. Make sure when you get back home, you have hundreds of business cards. And schedule your time well. Set up a daily to-do list and book as many meetings as possible.
Also, remember that you no longer need to bring CDs with you. They are useless for a DIY artist at conferences. Bring your PR materials or your manager, or even your tech guy/girl. It’s worth it!
From your vantage point, are there areas of the music business that you think are going to be more successful than others in the future? Are there any parts of the industry that really need improvement or growth?
Midem in particular is betting strongly on direct-to-fan (D2F) as a real strategy both for emerging bands and for established artists. There’s still a lot to learn, explore and invent in this field, and many labels really need to embrace this business model beyond the pure marketing dimension of D2F.
Also, you can see with SOPA for example or HADOPI in France that there is still a lot to do in the fields of copyright, rights management and the business of sharing, so that will be something to keep an eye on.
Do you have any parting words of advice for musicians or music start-ups trying to succeed in the current industry?
If you’re a musician, you are lucky, because this is the best time ever. You will get the opportunity to record awesome tracks in professional studios and get played and reviewed by people from across the globe. Your market is the world.
If you are a music start-up, don’t pay for the rights upfront – unless your home market is Sweden. Now, innovation in the field of music has a serious cost that needs to be addressed in your business model. Keep in mind that you may not be able to launch your service as planned without signing partnerships with record labels and/or publishing companies.
To learn more about the work Benjamin Costantini does and check out details about the annual midem conference (and prepare for next year!), visit the official midem website. Next year’s festival is scheduled for January 26-29, 2013.
Those of you who have been reading this blog for a long time may remember my 2010 interview with Tom Silverman that wound up being picked up by several larger periodicals. Tom is the founder of TommyBoy records and one of the principal executives at the New Music Seminar. He asked me to re-post one of his latest blog posts about where the music business is just over two years later. I personally feel it’s premature to call the upward swings in some areas of the business a “resurrection” but I have enormous respect for what Tom built at TommyBoy and the work he continues to do with the New Music Seminar. If nothing else, the statistics he presents below are very interesting. The article below is unedited and written and compiled by Tom himself.
THE MUSIC BUSINESS RESURRECTION
As I sat and planned the program for the June 2012 New Music Seminar, it occurred to me that we are approaching the first anniversary of the music business resurrection. After ten years of decline, the music business hit bottom in the second week of February 2010 and began to rise the week of February 14th. There have been many reports of the music business comeback and many have tried to figure out what was responsible for this upturn. Some have credited Adele, others the shuttering of Limewire, still others the Walmart $5 dump bins.
Let’s look at the good news.
In 2003, there were virtually no single sales as the labels stopped manufacturing them to drive buyers to higher priced albums to get the song they wanted. In 2004, iTunes changed all that and for the first time music lovers could buy not only the radio single, but also every track on the album separately for only 99 cents. Digital singles exploded, soon surpassing total album sales, physical and digital combined.
In 2010, digital single sales increased only 1.1% leading people to believe that tracks had peaked and might begin to decline. 2011 proved them wrong as singles grew 8.5%. Although this seems like a small number, due to the huge denominator, this represents growth of over 100 million singles in 2011.
Most of the 1.27 billion tracks that sold in 2011 were at the higher $1.29 price point showing the inelasticity of demand for digital singles even in the face of free illegal downloads and a half a year of Spotify plus Rhapsody, Mog and Rdio offering streaming competition. It is important to note that this growth did not come from current hits like Adele, Katy Perry or LMFAO but across the board especially from catalog.
More good news came from digital album sales where the growth rate increased from 13.3% in 2010 to 19.5% in 2011.
In unit sales, digital albums took the biggest jump since 2007 and the second biggest jump ever.
16.8 million more digital albums sold in 2011 than in 2010. 2011 was the first year that the increase in digital album sales exceeded the fall in CD sales. This is a significant benchmark that few seem to have noticed.
Good old CDs had quite an amazing year. In the face of the Borders chain closing and many other stores folding and CD SKUs shrinking within existing stores, we saw the smallest percentage shrinkage in CD sales since 2001.
Physical CD sales on the internet were actually up 17.7% in 2011 indicating an increasing desire for CDs at least online. With CD sales still running almost 69% of all album sales seven years into the iTunes era, it is clear that people still want physical CDs. If it were easier for record buyers to find the CDs they want in stores, there is no doubt that CD sales would be selling in far greater quantity.
More good news in the 60 year old 33 rpm vinyl LP album format where we saw a huge 37% increase in vinyl sales last year. The total sales are still under 4 million units (compared to 1.27 billion singles).
After hearing stories of the death of music acquisition from the “cloud camp,” music buying seems alive and well in all its forms. Nielsen SoundScan counted 1.6 billion music transactions for the first time ever in 2011.
If the good news in music sales is not enough of an indication of the returning health of the music business, add to that the new revenue centers of music streaming. In digital broadcasting where SoundExchange collects and distributes to artists and labels statutory fees, the industry has seen an enormous growth in new revenues.
In 2011, $95 million more dollars were collected by SoundExchange than in 2010 and conservative projections for 2012 show growth into the mid $400 billion mark. In 2011, SoundExchange collected almost the same amount from digital broadcasters as the traditional performing rights societies collected from all of the AM and FM radio stations for the songwriters and music publishers.
Other licensed streaming services with subscription models like Spotify, Mog, Rhapsody, Rdio and other subscription services added even more new revenue to the music business.
Although this graph tracks worldwide subscriber growth, Spotify’s U.S. launch in July shows great promise for significant new music revenues from the “access” model that appears to enhance rather than cannibalize music acquisition based on early results. This is comforting to a music industry that is always worried about a new format cannibalizing an older one.
The music business has clearly hit bottom and the resurrection is here. After a decade of the “music web” expanding its reach, becoming easier, faster and more social, new music discovery channels are showing their impact in more music sales and more paid music access. To be fair, all the news was not positive in 2010. The continued shrinkage of CD shelf space, the decline in mobile phone ringtone/ringback revenues and the failure of Beyond Oblivion, a promising idea tying connected devices to “feels like free” music access, were lowlights in an otherwise stellar year for the business of music. The powerful launch of iHeartRadio, the long-awaited U.S.
launch and explosive growth of Spotify, the public offering of Pandora and their achievement of 120 million registered users, Sirius/XM reaching 21.9 million subscribers. Mog, Rhapsody, Rdio, Cricket/Muve all grew their music subscriber base, all not only driving more revenue to the business, but more engagement and discovery of music and spending especially in the over-30 demographic that had historically spends far less money on music than younger demographics.
YouTube and Vevo are beginning to generate significant revenues to the music business and also driving discovery and sales as well. Mac Miller and Tyler the Creator were just two of the breakthrough YouTube driven hits proving YouTube’s ability to drive exposure as well as sales.
Smartphones reached 50% of all mobile phones in the U.S. and the recent CES Convention showed hundreds of new connected devices, and the rollout of connected automobiles all of which will drive more music access.
The 50’s saw the transition from 78’s to 33 rpm albums and 45 rpm singles that fueled a 30-growth period for music. The cassette made music portable and stimulated additional growth. The CD increased the perceived value of an album by 80% and ignited the biggest growth era in the history of the music business. A decade of adjustment is over and it is now clear that we are on the brink of the next big growth era of the music business.
On June 17-19, the New Music Seminar will explore the exciting future of the music business with the SoundExchange Digital Broadcasting Summit and the BMI Creative Conclave. The creative community and their label partners will meet the digital broadcasters, music bloggers, music technologists and all of the new music exposure and monetization players. Clear Channel CEO, Bob Pittman and Sean Parker will share their vision for the future as keynotes, as every sector of the evolving new music business convenes to discuss their perspectives for the exciting new future for the music business.
For most of us in the music business, this is probably the first time in a decade where we are feeling a new sense of optimism. Although unauthorized on-line music usage and distribution has not gone away, it is now time that the music industry begins to focus on expansion and positivity rather than fear and protectionism. Welcome to the resurrection. Have a nice day.
Vikki Walls is the Executive Director of the Dewey Beach Music Conference & Festival, held annually in Dewey Beach, Delaware. A lifelong music fan, Vikki got her start in the music industry when she decided to start her own band t-shirt business and then started booking night clubs and managing bands. She eventually stepped out of her management role when she decided that she could help more bands succeed by setting up her own music conferences and festivals, where she could bring her industry contacts together with talented artists. Together with John Harris, she started the Millennium Music Conference in Harrisburg, Pennsylvania and then eventually started the Dewey Music Conference & Festival. She has been running and participating in music festivals and conferences for over 15 years. She has also worked as co-editor of the artist resource The Musician’s Atlas and was the music expert for eBay for five years.
Vikki spoke with me about her experience in the music industry, qualities she looks for when booking bands for her festival and how artists can use music festivals and conferences to forge relationships with industry decision makers and find opportunities to build their careers.
Thanks so much for taking some time to talk to me, Vikki. How did you get into the music business, and how did it lead you to run conferences and festivals?
I was a legal secretary. And I decided I didn’t want to do that anymore. I thought I wasn’t doing what I was really meant to do. I followed a band I really liked and noticed they had no t-shirts or merchandising. So, I started a t-shirt company and did t-shirts for them. Finally, I was making more money there than I was being a legal secretary, so I quit and decided to run the t-shirt company full time.
Then, I started booking night clubs. Then I started managing bands, and I did that for quite some time. After that, I decided to focus on my career. Managing bands is a lot of hard work, and you can only take a band so far. I worked really hard. So, I said, “I’m going to work as hard on my career as I did on theirs.” I decided I really just needed to step out of the management scene.
I started the Millennium Music conference in Harrisburg with John Harris. And that was because bands kept asking me to manage them and for advice and help. So, I thought, why not set up a little conference and bring in a bunch of my contacts for these artists to meet, as opposed to just handling one band at a time? I felt I could help more bands that way. I worked on getting tradeshow exhibitors, sponsors and the panelists. I worked on the bands and organized it with John. That all came about because I had a compilation CD of central PA bands that I put out for free. And the Crossroads Music conference in Memphis got a hold of it and really liked all the bands. They gave me my own showcase at Crossroads. And from that, we took six bands from central PA. One was a band that John managed called The Martini Brothers.
So, we all went down and did the conference and hung out. At that time, John was booking several night clubs and was a banquet manager at the Best Western in Harrisburg. So, he had the venue. And we got back, and he said, “We could probably do this.” And I said I knew enough people. That’s when we decided to join forces. I decided I would bring in my contacts, and he would organize the rest. We started from scratch, not really knowing what we were doing. But because I had been to South by Southwest a minimum of 15 years, and I had done the conference circuit. Paul Sacksman from Musician Magazine was always taking me around the country and putting me on panels about do it yourself for bands. So, we decided that information was what bands really wanted. And since I wasn’t managing anymore, I started that.
I was still working for The Musician’s Atlas. Paul left Musician Magazine and started working on that. I became co-editor and helped put it together with him and Martin Feldman. And one year, I was at South by Southwest. I met the people from eBay across the booth from me and struck up a really good relationship with them. A couple months later, they stole me and made me the music expert for eBay for five years. In the meantime, I was still doing Millennium because it was just a once-per-year thing, so I could do both.
Then, I was really good friends with the owner of the Bottle & Cork in Dewey Beach. The Bottle & Cork is also a venue where the bands I used to manage played. And I even took the owner to South by Southwest many times because he’s such a music fan. He called me right after I left eBay, when they got rid of me and their other independent consultants. I had actually called him to see if he would come to Millennium to speak. And he said, “I just bought the whole Rusty Rudder complex. This might be a really cool place to have a conference. I know about your one in Harrisburg, which is well respected in the community.” So, I went down and met with him and looked at everything. And I said, “You’re right. Bands at the beach. It’s beautiful, and has a really cool vibe. Let’s try it.”
We did it there the first year, ten years ago. And after that, I realized it was a lot of work. And he had a lot more work for me to do and wanted me to do more here, including becoming the Talent Buyer for the Bottle & Cork. So, I left Millennium and figured I would concentrate on Dewey and use my contacts and do what I had to do to make Dewey the conference I wanted it to be. I just really liked everything about it. And the owner is wonderful. He will say, “I have all these restaurants. Let’s throw parties and feed the musicians.” He comes up with great ideas. As far as the organizing of it, that’s me selecting all the bands and getting the paperwork together, getting sponsors, and about a thousand other little details it takes to pull off even a small conference like ours, along with some very good friends from my Harrisburg days who have come to help me every year during the event and are now the core staff.
Obviously with the conference, you’re looking for people who are talented, people who have the capability for commercial success and that are really running their careers as businesses. What advice would you for artists as someone that has run music conferences for many years?
We take submissions through Sonicbids and ReverbNation. And my first advice to bands is to make sure their EPKs or whatever they send me in the mail are as up to date as possible. I can’t tell you how many times I go to an EPK, and a band will submit, but there will be no photograph, or there won’t be a bio, or they won’t list their gigs. Some of them, believe it or not, don’t even give me music.
I really read everything, study every band, listen to every band. I actually even try to Google a band if they don’t give me anything to go on. But that’s really a lot of work to ask me to do when I’m listening to so many bands. And it does get very frustrating. They need to keep up their site and make it as current as they can, list the clubs that book them and the festivals they’ve played, any kind of film or TV placement they’ve had, bands that they’ve opened for. These are key things that people like me are looking for. And, I feel that if the 9:30 Club is booking you, I should be booking you.
Sure. And you want to know a band is active, which means a list of current show dates. This is better than if the last show you played was two months ago.
Yeah. And I want to see that you’re not just playing two clubs in your hometown and that you’re actually getting a fan base from other places. Because of where I’m at in my career, I have to bring in a lot of really good bands. And I think I’ve built up that reputation. People that come to my event and any festival with a good reputation know they’re going to see good bands. But the bands are not the draw – the festival is. And the locals will come because they know they will see really good bands and not be disappointed. That’s why I am really hard on who I select. And I only have 120-125 slots.
If you are a band, does it help to have your industry contacts’ help to get into festivals? Does knowing someone in the industry or connected to you or the festival improve their chances and speed up the process?
Definitely. The industry folks that have attended have such a good time, they pass it on to other people and tell other bands about it. And people from other festivals come to ours and will pass me information about bands they think would be good for the festival. And some of my agents from William Morris and other places will turn me on to baby bands that they’re trying to work on getting booked. They’ll get all those bands to submit. It makes for a nice cross section of all kinds of music from all different levels, from singer/songwriters, to bands from Canada. I get it from all ways. And the goal is really just to keep the quality really good.
If you were a band coming into Dewey or Millenium what are some of the things you should be doing to promote yourself, get attention and build relationships before, during and after the festival? I can’t even compare it to South by Southwest, because that’s so huge it doesn’t work the same way.
Oh, yes. That’s so big. That’s one benefit of a smaller festival like ours. We’re small, and you see the same people all weekend. The reason I throw these VIP parties – and these are for all the bands – is to get everyone all under one roof so that everyone can network in a relaxed atmosphere. You’re having a few drinks and eating great food. And you’re in the same room with the producers, talent buyers, label executives and all the sponsors and tradeshow people. We’re all there together.
It’s the same thing I did as a manager when I would go to a music conference. I tell bands when they get accepted to try to come for the whole three days. There’s really no reason not to, because it’s free. We don’t even charge a badge fee to the bands that submit or the bands that play. Even the bands that don’t get selected get badges.
That’s pretty common I think. If you get accepted, you get a badge for the event.
Probably now. But, I don’t know if it was that way ten years ago. I always remember having to buy badges for the bands I managed. But I’ve always offered them free to bands. And I am not sure if other events in the country give free badges to all bands that submit for consideration, regardless if they are selected to showcase or not. This is our way of giving back to them to still give them a chance to schmooze, network, and participate in the panels, mentoring, etc.
Generally, if you’re coming to any festival, you should plan to go for all the days – in the case of my festival, all three days. And you go to the first VIP party, where everybody is schmoozing. You can tell the bands that work it, because they’re at every panel, they’re walking the floor of the tradeshow, they’re doing the mentoring sessions and the clinics. They get there at 10:30 in the morning, and they’re still doing business at 7 p.m. They really work it. They walk around and hand out literature. But, the biggest thing is, they’re taking every bit of advice and putting stuff in the goodie bags, etc.
At our conference, we give every band a half-page ad in the conference directory. So, as a band, you need to make your ad look really good, tell people where you’re playing and help promote yourselves. It’s like the band Halestorm from Harrisburg. They always knew how to work the conference. They would do everything. They would get up and do open mics, jump up on stage with other people, do the afternoon acoustic performance. They would even bring cookies, coffee and food to myself and staff in the mornings because they knew what our days were like running this event.
And they were subsequently signed to Atlantic.
And a lot of it was attributable to their participation in a music festival. The producer found them at the festival, there were a couple showcases with industry people that came to, and ultimately Atlantic took them on.
As a band, if you want to make the most out of going to a festival, you should attend all days of the conference, go to as many panels as you can instead of just showing up to do your 40-minute set. There are a lot of business-related things going on during the day that you need to participate in, including clinics, workshops, mentoring sessions, panels and tradeshow events. You also need to walk the street and hand out fliers.
It seems obvious to those that have gone, but a lot of artists forget how important doing all these activities at festivals is.
I know. And we still get people that don’t understand the importance of doing the whole event. It’s the festival part they want to do. They don’t realize that the conference part is what is really going to make a difference for them with their careers.
And I would imagine they need to research potential people they want to meet beforehand. There’s really no excuse now that we have LinkedIn and all the other social networking sites. When you find out someone’s participating, you use the information you can find online and find an excuse to reach out to them at the event. Have you found this type of research and networking to be helpful?
Yes. Because we do list the panelists, and we do provide information about them before the event, and so do many of the other festivals. And musicians should take advantage of that. As a musician, you should also check out the trade show exhibitors. If you go to any conference, you will see all that information at your fingertips, so you can do your advance work before you even set foot in town.
I found, especially in my experience as an A&R guy going to festivals, I would feel so assaulted by artists. Which guidelines would you give artists for approaching music industry gatekeepers at a festival?
I’ve been guilty of the same thing. When I first started managing bands, I would go to conferences and just after the panel, approach people saying, “Take my CD, take my bio.” And that’s your first natural instinct – to just keep passing stuff on. But I realized it was better to make the introduction, take a business card, make a connection and send the CD, bio and other materials later. Because, you know how many CDs they go home with.
I think bands learn not to be that way that after a few times. They’re just so happy to be someplace where there are industry people. So, they’re very aggressive at it. Once you learn a better way to approach people – by not hounding them, things get better. Also, you shouldn’t do things like fax them or email them every day about your showcase. I used to see bands do that all the time.
Just be smart about it. Don’t get in people’s faces. And realize that everybody’s really busy. Your appearance, your show and the way you handle yourself will get the right person interested.
Can you give some examples of people that were really successful at showing up at the conference and creating a buzz about their show?
A few come to mind. The band The Kin from Australia/New York City is one example. They played the festival numerous times. They did everything it took: put stuff in the goodie bag; put a song on the compilation CD; walked around and did things right; did the acoustic daytime stage. They would go out in the middle of the audience and sing without instruments. They handled themselves very well and were very professional. You could tell they had worked it from the time they got there Thursday, to the time their show was Saturday, because everybody was there – not only the locals, but all the industry and tradeshow guys had to see this band, because they just fell in love with them.
Obviously one of the major connectors at any small festival would be the person who plays your role – the person booking the talent. So, I would guess that somebody effectively working you and getting you as a supporter is a pretty big key to that as well.
Yes; because when I hear something I’m really into, I will tell people. I get really excited to see that band. And the one this year that struck me was a band from Pittsburgh called Lovebettie. She has star quality, an amazing image and she stayed in image the entire time. She was so friendly, and they just really worked it. And they were still selling CDs for 90 minutes after their set. That’s really amazing.
Clearly, for anyone looking for empirical evidence of interest, there it is.
There are certain bands that just really know how to work it. Unfortunately, while I try to pay attention to as much as I can, there are so many things going on with trying to put together the weekend that I’m everywhere. I don’t really get a lot of time to spend with a lot of people. But I do see at night how it comes together and works. And I do hear from the industry that is there about who impressed them during the day that made them want to come see them at night.
For example, Paul Sacksman from Musician still comes every year. He’s an independent consultant now. He goes and sees every band he mentors. He doesn’t care where they are or what they’re doing. If he mentored them over the weekend, he goes to their gig. And that means a lot to those kids that he mentored. That shows that attending the mentoring events works. I don’t know if everybody does that, but I think it’s very cool that he does.
To learn more about Vikki Walls, visit the Dewey Beach Music Conference & Festival website.