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.
You Are Viewing Music News 2012
Last week, Google announced the upcoming launch of its new music locker storage service in Europe and secured licensing with Warner Music Group (WMG). And the landmark “F.B.T. Productions v. Aftermath” lawsuit involving some of Eminem’s music was finally settled. Also, Trent Reznor delivered some advice for aspiring artists that want to navigate the modern music business.
Google Play to Launch in Europe
Google’s long-anticipated new free scan-and-match music locker storage service Google Play will finally launch in Europe on November 13. The music store will launch in the UK, France, Germany, Italy and Spain and will offer the full features of its cloud locker technology, Andy Rubin, Google’s SVP of mobile and digital content said in a blog post on October 29.
Rubin told users, “[You] will be able to purchase music from the Google Play store and add up to 20,000 songs – for free – from your existing collection to the cloud for streaming to your Android devices or web browser.”
He added, “We’re also launching our new matching feature to streamline the process of uploading your personal music to Google Play. We’ll scan your music collection and any song we match against the Google Play catalog will be automatically added to your online library without needing to upload it …”
The service will hit Europe before it hits the U.S., though it will soon be available there as well. All product features will be totally free, with free music storage, matching, syncing across devices and listening.
This marks a critical step in Google’s path to compete with Apple, Sony and Amazon. Google chose to launch its original cloud service without licensing deals, eliminating the possibility for a scan-and-match function.
Google also finally signed a deal with WMG – its only hold out label – to add its catalog to the store, so it now has a full set of major labels attached, a year after the official launch of Google Music.
UMG/Eminem Music Royalties Lawsuit Finally Settled
A federal lawsuit with big implications for digital royalties and the entire music industry was finally settled this past week, revealed a story published by The Hollywood Reporter. The case, F.B.T. Productions v. Aftermath Records saw Eminem’s early producers, Mark and Jeff Bass suing a subsidiary of the Universal Music Group, because they believed they were not getting royalties owed to them from iTunes and other digital store downloads. (We have been following this story at Musician Coaching for a couple years. You can read more about its origins by checking out the interview from 2011 with lawyer Patti Jones, Esq.)
UMG stated that royalties for the downloads should be the same as for CDs, but F.B.T. argued that the downloads should instead be considered licensed music, which is worth more money; artists earn 10-20 percent from sales of albums and singles and 50 percent from licenses for uses such as a TV commercial, etc.
The U.S. Court of Appeals for the Ninth Circuit in California ruled in favor of F.B.T. in 2010, overturning a previous jury verdict. And both sides have been engaged in a damages trial for over a year. Another trial was set for April, 2013, which would have given the Bass brothers a platform to reveal the details of the millions of dollars they were owed, plus the underhanded way UMG and other major labels dole out revenues between foreign and domestic factions before sharing with artists. In fact, in June, even the judge involved in the case accused UMG of trying to “dupe” him by providing misleading information about the way it distributes revenue.
However, on October 29, the lawsuit ended with a private settlement. While the settlement has been officially filed, neither side would reveal the final settlement amount or the terms of the agreement.
Eminem was not involved personally in the F.B.T. case. However, it paved the way for other litigation in the past two years. Musicians including Kenny Rogers, James Taylor, the Temptations, Weird Al Yankovic and Rob Zombie filed suits against their labels for huge sums. Sony settled a class-action suit earlier this year that gave a group of artists $8 million total in missed royalties.
Many in the music industry feel that this case will set a legal precedent for the label-artist relationship going forward. While Universal has argued that the case will not change the landscape, many lawyers disagree. San Francisco-based lawyer David M. Given, who has worked on many of these cases, including one filed by the estate of Rick James said, “The legal precedent the case has set has already had a profound impact … If UMG paid the price, which I think it probably did, then that will set the bar (which I expect will be high) for the settlement of other download royalty claims, like the ones in the James class action, for other recording artists.”
Trent Reznor, on How to Make it in the Music Industry
Trent Reznor had some words of advice to share with artists trying to make it in today’s challenging music business in a recent interview with Techdirt.com. After some misinterpretation of comments he made about going back to major record labels earlier in the month, he also decided to set the record straight and talk about his continued respect for the DIY journey and the importance for artists to understand the business aspects of their careers.
And Reznor asserted that the advice he would give to up-and-coming musicians looking to create a strong business model is the same advice he would give to established acts: “My advice today, to established acts and new-coming acts, is the same advice I’d give to myself: Pause for a minute, and really think about ‘What is your goal? Where do you see yourself?”
He detailed the danger of focusing on the ever-elusive “record deal” and why all artists need to instead focus on honing their craft and “brand” by sharing his own story: “As a 22-year-old kid in Cleveland, it seemed to me that just playing out in bars, hoping someone noticed your band, and then offered you a record contract, while that’s possible, I didn’t know anybody, and didn’t know anybody who knew anybody that that had ever happened to. The strategy then, was let’s work on getting a band, and something that means something, music that matters, music that I feel proud of, and a vibe and name and ‘brand’ of this thing, and then try to reach maybe some small labels that had music in the same vein of what I liked.”
In today’s music scene, Reznor said, artists have a lot of opportunities to build a strong fan base. And they need to define what their ultimate goals are now more than ever before and know when seeking out a record deal is appropriate, and when it is not: “If I were that person [starting out] today, there’s a hell of a lot of things that didn’t exist then, that exist now – like YouTube, like the ability to self-publish, like the ability to reach everyone in the world from your bedroom if they’re interested. I’d focus my efforts on what seems like a logical way to do that that maintains integrity. If my goal is to compete with Rihanna on the pop charts, I’d think that requires going through a major label system with a powerful manager.”
He stated that he made a decision to go back to a major label for his latest endeavor How to Destroy Angels, because it fit his current goal, which requires him to go beyond what he has built with Nine Inch Nails. He was concerned that only Nine Inch Nails fans would latch onto the new project. And a label offers him the chance to extend far beyond his current fan base.
He further explained, “The main reason I do what I do is I want to do something that matters. I want to be able to create art that reaches the maximum amount of people on my terms … That was a key component … Because it came down to us – us being the band now – sitting around and identifying what our goals were. And the top priority wasn’t to make money. It was to try to reach the most amount of people, and try to reach the most amount of people effectively, that doesn’t feel like it’s coming completely from my backyard.”
This past week was marked by on-going change in the digital music market as owners of streaming site Deezer discussed why they will be avoiding the U.S. market, and Apple’s proposed new Web radio service met with very mixed reviews among label executives. Also, blues guitarist Walter Parks gave some sound advice to artists that want to build long-lasting careers in music.
Deezer: Taking Off … but not in the U.S.
French streaming music site Deezer, one of the most successful European start-ups will not be expanding to the U.S. anytime soon, according to an article in The New York Times. And Chief Executive Axel Dauchez said that he believes ignoring America is what will help his company compete with global powerhouses like Spotify.
Founded in 2007, Deezer is the second-largest digital music streaming services, behind Spotify, in the number of paying customers it has attracted worldwide. With headquarters in Paris, it provides unlimited access to millions of on-demand songs on users’ PCs, mobile phones and tablets.
And Deezer is getting industry nods for its lack of U.S. focus: Warner Music Group’s owner Access Industries gave the company $130 million this month – one of the largest sums ever to be invested in a French company.
Dauchez said he believes this financial endorsement “… shows that they think the music market is beginning to turn around.” With the help of Deezer, Dauchez hopes to increase the revenue within the music industry and give musicians, labels better returns. Deezer generated 50 million euros in revenue in 2011, and Dauchez set a goal to hit 1 billion euros annually by 2016.
Deezer has two million paying customers, about half the number Spotify enjoys. Since Spotify became available in the U.S., it has seen rapid growth. But Deezer wants to focus its money instead on expanding to 160 other markets. Music industry analyst Mark Mulligan remarked, “Like a canny general who decides to march around a heavily fortified stronghold and thus effectively leave it stranded behind enemy lines, so Deezer expects the streaming war to be waged on different shores … They are both right and wrong.”
Many analysts have said that Deezer should be concerned about competition in the United States, where aside from Spotify, Rhapsody, Pandora and Rdio all thrive, even with slightly different business models. And Mulligan claims the U.S. streaming market has not yet hit its ceiling, as premium streaming is still too expensive for a lot of music fans. Outside the U.S., Spotify is ahead of all other streaming companies, except Deezer, which is the #1 most popular in France.
New financing will be important for both Deezer and Spotify, because they have both spent huge amounts of money. In an effort to draw in new listeners, both services offer free, restricted versions. But they must pay royalties on everything, even tracks that are free to users.
Streaming services have tried to pay for free listening by selling advertising. But Dauchez stated that securing this has been a challenge. So, Deezer has turned towards using its free service as, first and foremost, a marketing ploy to convert more people into paying listeners.
This policy is proving an expensive way to expand. Deezer was profitable in 2011, but is expected to lose money until 2014 as it becomes available in new countries. It has already moved into other European countries and will amp up growth in the next month.
Its popularity in France is greatly attributable to a marketing partnership it has with mobile provider France Télécom, which includes the service as a bundled part of some mobile phone packages. But whether bundling will be as valuable as straight subscriptions remains to be seen.
In an effort to set itself apart from Spotify, Deezer has been beefing up its social features and editorial content, which includes playlists and information on local performances by favorite artists. Dauchez said, “We don’t want to be a ‘smart jukebox’ … If you want to rebuild the value of music, you have to rebuild the engagement with the listener.”
Will Apple Radio Fly?
Apple is investing a lot of energy into getting major record labels to jump on board with its proposed Web radio service, unofficially coined iRadio. But some label executives are not buying it as a bright idea, said insiders at CNET. And this could cause the project to stay grounded.
Apple is hoping to launch its ad-supported Web radio service early next year. But many music industry executives said what the company is offering them is just is not good enough to warrant their approval. Sources said Apple is offering a lower royalty rate than Pandora, although it wants to provide more features to its customers than the currently top Internet radio service provides to its customers. Pandora pays a statutory rate set by Congress that limits the way users can interact with songs.
To make up for Apple’s lower royalty payments, it is offering a percentage of ad sales to labels. While some industry leaders feel this cut will not be big enough to make a partnership worth it for labels, others think it will be good for the overall music business if Apple provides Pandora with a worthy competitor.
A source said it would be easy for iTunes to push a Web radio service out to its sizable audience and also use it to boost download sales, which have flattened out in the past year. Because Apple owns 64 percent of the digital music market, analysts have said that labels have to think about what might happen if Apple cannot expand to markets that are gaining in popularity with consumers.
Industry leaders have also stated they think that Apple could provide Pandora with support to get the Internet Fairness Radio Act passed, which would reduce the royalty rates Web radio services have to pay to artists, publishers and labels. Big record companies and music managers have been fighting against this bill for the past several years and have plans to join to discuss their strategy to fight it this coming week.
Walter Parker, on Music, “Sucking it up” and Getting Personal
Blues guitar legend Walter Parks spoke recently to the Huffington Post about how he has been able to build a solid career in an ever-changing music landscape and delivered some very matter-of-fact advice to aspiring musicians. Parks has enjoyed an international career, acting as lead guitarist for Richie Havens, half of the folk-duo the Nudes and leader of the swamp-blues group Swamp Cabbage. And after spending more than 30 years in the music industry, he released his first self-titled solo album in December 2011.
Parks talked to Arts & Culture section writer Laura Cococcia about the challenges he has experienced breaking through in the music industry and how he developed his voice, style as an artist and grew his business. Most importantly, his perspectives illuminate why artists need to establish a “well-rounded view on art as a life’s work that requires rigorous study, observation and intimacy with the fabric” of their audience.
From the beginning, Parks was committed to greatness, and as he admitted, he does not understand any musician who does not strive to be the best at his/her craft: “From an early age I was entranced by subtle technical aspects of great records. I was acutely aware of timbre in different instruments and I could hear the microphone placement used to capture textures and create dimension. Only the best producers know how to evoke the sonic fantasy that most listeners take for granted … Neither the promise of money nor sex (as it is for most) was a career motivator for me early on. I had and still have a drive to realize an original sound that I’d like to share with many people and be recognized for. This is not a desire for stardom yet it’s a desire to connect with and inspire people, admitting of course the self-serving good feeling that ensues in so doing! Averageness is deplorable. I am perplexed by un-outstanding people.”
And while he admitted that he still struggles to make money on touring, and recording, he said that his success is greatly attributable to his on-going dedication to learning about the intricacies of the musical craft and advised other artists to do the same, even when the process is outside their comfort zone:
“Learn music. Learn harmony. Whether or not you like jazz, study basic jazz harmony, even, for instance, if you play folk music. Jazz harmony is not complicated yet knowledge of it provides a cushion of peer respect and it improves your writing.”
He also stressed the need in today’s market for every musician to be an incredibly hard-working entrepreneur running his/her career like a business while connecting intimately with the audience:
“Some aspects of a music career are going to feel like work. Suck it up. Be an adult and join the rest of the working world — that is your audience. The upside (if one is needed) is that in general you will be guided by what feels good to you throughout a large chunk of your career during your creative process – during your writing …
Accept that you will make money in art when you connect with audiences and with people who can help sponsor you. No amount of money can insure that you will connect. Be willing to change your art (possibly only slightly) if you are not connecting, provided that you don’t feel polluted by the change …
Do business often. The business part of your day is ‘the work.’ ‘Work’ often. Work the phones, social media, the post office etc. Never sell. Selling is bullshit. Selling is manipulation. Selling is the act of convincing. Selling is a lie and everybody knows it. Instead, share, offer, present. The market, your audience, will decide how easily you can meet expenses. This is capitalism. Be at peace with capitalism. I say this because capitalism will work for your art if you produce quality, are industrious and are unwilling to take no for an answer. Our country ascended because of the creativity of a proportionate few forceful risk-taking idealists, inventors, and politicians. Aspire to be in that club. Proudly be unaverage. Have fun being different but don’t fake it …
Force yourself to learn the ways of people. Look people in the eyes. If you don’t care about people you’re in the wrong profession. Talk to strangers and learn from them. Offer to them. When you feel depressed, get your ass out of your apartment and do something for somebody else. Time is proving that a good artist can work many years so don’t trash your body – as it is your tool, as is your instrument.”
Analysts examined how Microsoft’s long-anticipated streaming music service could affect the overall industry this past week. And the entertainment industry teams up with Internet Service Providers (ISPs) to fight digital piracy. Also, a legal dispute over the rights to Ray Charles hits could change royalty payments for other artists.
Microsoft and Xbox Music
On October 14, Microsoft announced the launch of a new streaming music service, Xbox Music. It will be available for Android, iOS, Windows 8, Xbox 360 and a few other operating systems and according to an article in PCWorld is a reboot of the company’s expensive Zune project, which emerged and flickered out when iTunes first exploded.
News of the new service came days before the anticipated release of Windows 8 Pro and Microsoft Surface tablet, products which will be part of Microsoft’s new mobile-heavy business strategy. It also was timed right after reports that Microsoft Office would soon be available for both Android and iOS.
Xbox will present free streaming music as well as a subscription option for those that want to download individual tracks or hear music devoid of advertisements. It will also feature a full music store. It will be a direct competitor with companies like Spotify, Pandora, Google Music, iTunes and Amazon Music.
Xbox Music will also offer a special deal: Those that purchase a Windows 8-run tablet will be able to stream millions of songs for free, unlike Spotify, which charges $10 monthly for use on tablets.
Microsoft’s new music service will allegedly offer free access to 18 million songs for those in the U.S., with ads run every 15 minutes. Then, for $9.99 per month or $99.99 annually, consumers can listen without interruption. Music fans will also get the Microsoft Music store, which will have MP3 versions of songs for download at around $.99 per track. A “Smart DJ” tool will also serve as a music discovery system that will play new music for music lovers based on their favorite bands and artists.
How do analysts feel Xbox Music will impact the industry? Opinions are varied, said a piece in the International Digital Times. Some experts stated they feel that a shift to mobile could alienate many Microsoft fans; others feel it is a smart move that will draw in different types of users. Industry analysts and ZDNet contributor Steven J. Vaughan-Nichols declared, “No matter when Microsoft delivers the Android and iOS goods, Microsoft’s support of any version of Office on a non-Windows smartphone or tablet strikes me as an odd move. In a shareholder letter, Microsoft CEO Steve Ballmer said that Microsoft is shifting its model to focus on devices and services. This is a radical and dangerous shift for a company that’s always made it money from software licensing. And, now, instead of using Office as a crowbar to pry users from iPad and Android tablets to its Surface tablets, Microsoft is going to offer Office 2013 on its device rivals?”
Microsoft is giving up some of its market share with this latest move by creating cross-platform software. However, this could be a move to create more sustainable revenue in light of the fact that Windows has become a much smaller part of the company’s annual income. Microsoft’s 2012 revenue reports show that Windows only brings in the third-largest revenue for the company, behind Microsoft Office and its Server and Tools department.
The Xbox branding could help the company rev up its entertainment division, though it will not likely save the music industry. Xbox Music will be the default music application on every Windows 8 PC’s Start screen. And it is one of the first apps built for touch. The Windows 8 app – the best entry into the Xbox storefront – will ship on October 26. Spokespeople for Microsoft said it will expand the regions where Xbox Music is offered in the coming months.
“Six Strikes, You’re Out” to Combat Piracy
The Center for Copyright Information (CCI) will soon join together with ISPs such as Comcast, Verizon and a few others in order to establish a new “Six Strikes and You’re Out” system to fight digital music piracy and provide much-needed education to music fans, according to a report offered by CBS News last Wednesday. While news of this new program was first reported in September by both PC World and Ars Technica, more details and exact dates have recently emerged.
CCI Director Jill Lesser stressed, “It’s not a six strikes program. This is an educational program …There are a series of educational alerts that will be sent out to subscribers.” And it will be officially known as the Copyright Alert System.
Rob D’Ovidio, associate professor of criminal justice at Drexel University stated that this program is meant to help people understand that committing copyright infringement online is no different from stealing anything else: “Under the eyes of the law, downloading a piece of music from one of these file-sharing sites without authorization is no different than walking into a store and stealing a physical good.”
Five ISPs will begin to go after infringers in November, as exposed by leaked AT&T U-Verse training materials received by TorrentFreak. The program will give violators five chances via written warnings that detail violations and potential consequences.
D’Ovidio said the outline of the program supports the idea that education is a priority for both the entertainment companies and ISPs: “It’s definitely not a zero-tolerance type of approach … They’re working with the customer, recognizing there’s still a lot of misinformation out there – especially among the younger users They don’t know what’s acceptable and what’s not. Copyright law is a confusing thing for lawyers, let alone teenagers.”
Information about the program does not suggest cutting off pirates from their ISPs or other services. It will, however, require them to go through educational tutorials online before being allowed access to certain sites. But six strikes could result in a lawsuit from copyright holders. D’Ovidio continued, “The Internet Service Providers don’t want to lose customers; at the same time, they do have a responsibility … [But] the fact that someone is watching, and somebody knows where you’re going, hopefully that can serve as a deterrent.”
The program will put file-swapping users at the mercy of ISPs and content owners after the sixth strike. During the process of the program, no personal information about Internet subscribers will be offered to content owners without due legal process and the subscribers’ consent.
D’Ovidio added that content creators have to take more responsibility: “It’s been shown if the industry can put out alternatives that are low-cost, easy to use, where consumers can get access to those files very quickly, people do shy away from the use of illegal services.”
Lesser said in September that the “softer language” is an extension of the new approach the CCI has taken in the wake of the controversial Stop Online Piracy Act (SOPA). This latest initiative will team up the MPAA, RIAA with a handful of ISPs.
How Ray Charles Could Further Change the Music Industry
Music producers are on the edge of their seats as a legal fight over the rights to many of Ray Charles’ hits – including “I Got a Woman, “A Fool for You” and “Mary Ann” – rages on between his surviving family members and his charitable foundation. An article on The Hollywood Reporter site showed how the lawsuit is testing important issues regarding song terminations.
Charles’ children, whom he mostly cut out of his will, are trying to terminate a copyright grant on the songs to Warner/Chappell Music. If the songs go back to the children, the Ray Charles Foundation will no longer receive royalty checks.
The foundation sued his children in late March, saying that the termination notices they offered are invalid because the songs were created while Charles was employed by a record label and music publisher. Thus, the songs are “works made for hire, ‘authored’ by the predecessor to Warner/Chappell,” meaning his offspring have no legal rights to terminate.
A judge determined that the songs were not made for hire in late September, leaving the door shut for a potential lawsuit to be filed by Warner/Chappell. However, the Ray Charles Foundation recently decided to argue the side opposite to its original complaint. The foundation said earlier this month that the songs were not made for hire.
This statement is setting up a lawsuit directly related to termination rights, which has recently become a hot topic in on-going copyright law debates, especially since Bob Dylan, Tom Waits and Tom Petty have all just sent their own termination rights notices. And the industry now waits to see whether a court will feel that artists do their work as “employees” of record labels and publishers, thus giving them no right to some royalties.
This issue was broached earlier this year as Victor Willis of the Village People won a lawsuit and was able to get a federal judge to deny publishers the right over his works. However, this particular decision did not take into account the “made for hire” defense, because the music publisher dropped the claim before that particular component was decided.
In the lawsuit begun by the Ray Charles Foundation, the decision made by Judge Audrey Collins ruled that if “the works were not works made for hire and the foundation were receiving royalties from simple assignments, [then] it would be a ‘beneficial owner’ in the copyrights and would have standing to assert an infringement claim.” However, the judge was not sure if the foundation would be able to challenge the terminations and ordered more evidence to be presented.
The foundation’s response on October 2 was that Congress has not been clear about who can challenge terminations. The “if” was not well defined in Collins’ ruling. Howver, the foundation does admit that Charles is the author who assigned the work to someone else. And this left an opening for Charles’ children to try to get Charles’ songs back from the label, which they began to do on October 9.
If the judge decides that the foundation’s claims have merit and lets the case to continue, it could change the outcome for industry players like record producers to challenge termination notices.
And the judge will likely address whether or not the Ray Charles songs are “made or hire,” a distinction that could represent a critical change for record labels and publishers that find themselves inundated with termination notices.
Last week, artists saw an increase in affordable resources as TuneSat announced a free trial of its services, so artists can see exactly where and when their song has been played on websites and TV channels. Also, MySpace stated that its new incarnation will fill a huge gap in the market for musicians left by Facebook and other social networking sites. And experts shared stats that reveal how widespread piracy has really become and discussed how the problem could be diminished in the future.
TuneSat Offering Free Trial
TuneSat, a company that offers a solution to inaccurate music performance reporting, lost royalty payments and copyright infringement by tracking when and where specific audio content is being performed on hundreds of TV channels and millions of websites worldwide announced it will offer a 30-Day free trial for artists, composers, labels and publishers. The free trial is good for up to 100 tracks and is an effort by the company to help artists further make sense of the modern music climate. TuneSat helps musicians supplement the work of performance rights organizations by taking control of their careers and accurately detecting every unauthorized use of their work, so they can earn more money from their creations.
TuneSat has been in business since 2009 and offers real time online reports of exactly when and where content is being performed across the globe. It has 20 million fingerprinted songs in its database and has recovered millions of dollars in royalties for artists of all shapes and sizes.
TuneSat COO Chris Woods said, “For years, rights holders of all sizes have relied on antiquated reporting systems that often times leave them with a wholly inaccurate view of what they’re owed … TuneSat changes all of that, empowering musicians and labels with a more accurate picture of who is using their music and whether they can recover lost royalties.”
After signing up for the free trial, users get up to 100 tracks and will be able to immediately view the first 50 detections. They can then use this report to collect on the public performance and sync/master use royalties and also use the information to get insight into where their music is being played so they can better shape their marketing efforts. When the free trial period expires, artists can sign up for the service for rates starting at $10 per month for 10 tracks or choose from a variety of different subscription plans and customized services.
Any artist can sign up for the free trial of TuneSat here.
MySpace Releasing Yet Another Version of Its Music Offering
The latest version of MySpace will attempt to fill critical gaps in the music discovery landscape, according to an article in the upcoming issue of Billboard magazine. And a slew of industry executives and artists are ready to give it a shot, hoping it will improve upon what is being offered by Facebook, Twitter and Spotify.
The social networking site released a two-minute video preview of its design on September 24, then began to open up its new version via private beta to some artists and label executives, welcoming their feedback as the features continue to be defined. And feedback from executives has been positive so far. MySpace was acquired by a third owner in seven years, Specific Media in 2011, purchased for only $35 million, a whopping $545 million less than what News Corp. paid in 2005.
An unnamed label executive said, “Hopefully the reality lives up to the demo, but the new owners at Specific are very smart guys and really know the ad world … They’ve created a site for creators and fans that’s a more immersive music experience than what we get out of the big social networks, which are more about sharing. This is definitely geared toward music and discovery.”
Specific Media co-CEOs Tim and Chris Vanderhook have both openly declared that developing direct relationships with artists through the new MySpace is one of their major priorities. The new MySpace intends to focus on music fans and helping artists figure out who their biggest and most impactful fans are through data that is available through Facebook, Twitter and Spotify. Chris Vanderhook stated, “Social networks collect tons of data, and what we’re trying to do is put the data in the hands of our community rather than a black-box fashion … Artists want more transparency into who their most important fans are, so we’re calculating who those people are and serving it not just for the artists but for the fans to have that recognition.”
Artist Chuck D was particularly excited about the new platform, and voiced his support for Justin Timberlake’s role as creative director. Timberlake has been sharing the new site developments with his own connections and has even brought on some to serve as part of his internal creative team.
Another major label executive that has tried the new MySpace said that the company’s history of successful curation will be its greatest asset going forward: “We have a very disparate music landscape digitally right now. I don’t think anyone’s really been that voice of the fans for a really long time … The Hype Machines and Pitchforks all have a place, but that’s far away from the mainstream. As much as I love and respect what those sites do for our artists, I feel like that spot somewhere between the hipster and the mainstream is a very empty place right now.”
The Worldwide Reality of Piracy Revealed
The recent global music piracy report revealed some surprising information about where the most people are pirating music. Gainesville, Florida won the award for “pirate capital of the world,” according to the Digital Music Index (DMI), a report released by the analysts at Musicmetric, a company which charts digital music trends worldwide.
The first report by the company looked at file-sharing activity on the peer-to-peer service BitTorrent and revealed that Americans downloaded 759 million songs illegally using BitTorrent software in the first half of 2012. The U.S. is still #1 on the list for highest instances of music piracy.
Global CEO of Musicmetric, Gregory Mead said he hopes the details offered up by the report will help the music industry get better insight into what consumers are looking for, so it can figure out where it is losing money: “Detailed data analysis is of great value to the industry and just as retailers need to know their customers, we need to do the same online … Offering people better insight into music through the DMI will help the industry begin to reclaim its past glories, and we’re excited about working with labels to achieve this.”
An interesting finding of the DMI was that streaming music services are actually helping decrease piracy levels. Unlicensed file sharing decreased over the past six months in locations where Spotify and Pandora were available.
And the former leader MySpace was replaced by SoundCloud as the site with the most streaming for new and breaking acts, whereas YouTube remains the site where most people listen to music online, with 33.5 billion plays in the past year.
Music fans in the U.S. downloaded over 97 million albums and singles using BitTorrent from January, to June 2012. After Gainesville, the top pirate metro areas for illegal downloads were Albany, Georgia, Fairbanks, Alaska, Lexington, Kentucky and Tallahassee, Florida. The most illegally downloaded releases were in rap.
Mead said that artists and music industry executives should look at results of the DMI as proof that America offers huge opportunities for artists, since they prove there are still millions of enthusiastic fans out there: “America has millions of passionate music fans – and while we don’t condone any kind of piracy – the Digital Music Index provides a detailed snapshot of the scale of file-sharing, as well as licensed music consumption.”
Mead also predicted that piracy will slow as legal streaming services become more widely available in up-and-coming music markets: “Piracy is slowing in the places that have legal and low-cost streaming services and a low-barrier-to-entry access to services … Piracy is slowing in places like Britain and the U.S. [where these services are growing] but for example, in Brazil [where these services are still not widespread] piracy is growing.”
The International Federation of the Phonographic Industry (IFPI) found that the music industry was worth $168 billion in 2010. And the latest global music report by Musicmetric paints a picture of a very healthy industry: “The global music industry has continued to expand online and the period 2011-2012 saw healthy growth in sales of digital music.”
But piracy is still a problem to be solved. Ben McEwan, director of digital licensing at PRS for Music, a PRO that represents 90,000 composers, songwriters and music publishers in the U.K. said, “We need action against piracy. Action taken to ensure the legitimate industry is supported and that licensing is made as simple as possible … There’s a big transition going on, bricks-and-mortar music stores are closing down and there is a whole younger generation of people that have grown up doing things digitally … The issue for the industry is that though digital is growing, it’s not growing fast enough to make up for the decline in physical music revenues. … We need to manage this transition to digital and make sure newer models and services that are evolving now, are working.”
Daniel Savage, Musicmetric’s head of operations based in L.A. said that musicians and other copyright holders need to start to look for additional ways to monetize music files online: “The potential for converting revenue lost through file trading is huge but to tap into it, we need clarity on the drivers between social media, file sharing and all the other activity an artist can do.”
Last week, experts and artists alike analyzed the new music business and discussed methods for surviving in it as New York Magazine presented a breakdown of pop music’s new metrics, and industry veteran David Byrne released his new book outlining where the music business is headed and how all musicians can take charge of their own careers. Also, Rdio introduced its new Artist Program, which helps artists maximize earnings from streaming digital music.
Do the Music Industry’s Old Metrics Matter?
There is a new math attached to Top 40 music in the Digital Age, according to an article in New York Magazine. And artists need to start coming to terms with reality, change their goals and define and manage their careers very differently.
One of the biggest signs of change is that the record for the #1 album that sold the least number of copies (since 1991 and the SoundScan era) was broken three times in the first part of 2011. Previously, it had only been broken three times in 16 years. Still, since 2008, there have been 66 #1 songs, and just six artists have been responsible for half of those: Katy Perry; Adele; The Black Eyed Peas; Rihanna; Flo Rida; Lady Gaga. 1986 saw 31 #1 songs created by 29 different artists. But in the new music industry, “new” is not always better, as this piece pointed out. Catalog albums – those that are over 18 months past their release date – outsold brand new ones in 2012 for the first time in history.
Despite lower album sales numbers overall, stadium-oriented acts like Radiohead are no longer the only ones filling giant venues like Madison Square Garden. Artists that would have been considered small and indie in previous years, like Phoenix, Interpol and The Black Keys have all sold out The Garden and other huge performance spaces, in large part due to their abilities to build up a following of anywhere from hundreds of thousands of fans, to millions of fans on social media sites like Facebook and Twitter.
As the article also highlights, in the new “rock star economy,” while there is money to be had by everyone from DIY artists, to major label acts, income varies wildly between those groups. The average five-piece DIY band that is making an album every five years pulls in just under $11,000 annually per member. A Pitchfork-beloved indie label four-piece group earns about $126,000 per member per year. And a major label act, as big or bigger than Beyonce, can expect to pull in a total of almost 33 million.
How Music Works: How to Be a Musician and an Entrepreneur
Where is the music business headed, and how can artists make a living and create great art within the space? These are questions industry veteran, musician, writer and entrepreneur David Byrne asks and attempts to answer in his new book How Music Works.
In his latest tome, Byrne tackles the concepts behind making music in the current world for the first time, focusing on the future rather than the past and revolving around his own personal business dealings and experiences, which he presents in pie charts and real stats. He told Wired, “I want folks to see the fairly simple math that pushes us towards making certain musical and career decisions … The book is about how myriad external factors influence the music itself, and money is one of those factors.”
The book is also a way for Byrne to help other artists see an example in someone who has been making his own way in music for a long time and help them make some better sense of the music world. In a universe where everyone is now being forced to take charge of their own careers, he feels his story – full of successes and also, as he admits, some failures – can provide some insight into how decisions all musicians make shape their careers: “I also thought that by being transparent and using my own experience as an example, I could let other musicians see what their options are – and how their decisions might pan out … It’s all very confusing until you bring it down to what exactly one makes on a record for a year’s worth of work. Then it hits home, and the reader can sense what it takes for a musician to survive.”
In large part because most other artists – especially not those at Byrne’s stage in his career – have ever been upfront about their incomes, How Music Works breaks new ground. He felt that presenting the realities of his earnings – despite the fact that it made his business managers uneasy – was important to creating an honest depiction of the landscape for others.
The book also goes beyond just business aspects and outlines what Byrne feels to be some of the most exciting movements in music outside the U.S., further expressing his long-held belief that the term “world music” is generic and distasteful, and American music fans need to rethink the way they receive and define music outside the U.S.: “I stand by my disdain for the term – it implies that there’s an ‘us’ and then there’s everybody else … Have things changed? A little. You might see Rolling Stone or maybe even Pitchfork review a new Caetano [Veloso] record, or one by Lenine or some other Brazilian artist, but given the amount of creativity that exists in the world, we’re pretty much locavores.”
He added, “The interweb allows us greater access to many of these artists, which of course is great in my book — I follow a lot of them and order their records online — but on the other hand, the web also allows us to stay exclusively within our little tribes more than ever.”
How to Earn More Money from Streaming Music
As options for streaming music evolve, artists continue to complain about how much money they are earning from these digital services. But a new offering from Rdio is hoping to help musicians maximize their income from this channel. Rdio CEO Drew Larner talked about this new Artist Program in an interview with The Musician Network last week and about why building up awareness of social music discovery and techniques to make it more effective is important to artists of all sizes.
The Artist Program is a way for an artist of any size to get rewards for successful fan engagement through Twitter and Facebook. Artists will be paid $10 for each new subscriber they bring to Rdio and also get access to a customizable Rdio artist page and a dashboard that allows them to track metrics and see their referrals accrue. Through this dashboard, they can convert any link on Rdio to a unique link associated with their account and share those links with fans on social media sites. Anything, whether a song from their own albums or a song from their favorite new inspiring artist can be shared and attributed to them, so they earn money for any type of Rdio-related interaction.
The new program is also designed to help artists earn money more immediately, above and beyond licensing deals, since Rdio does not pay royalties directly to artists. He said, “… We have agreements with labels and distributors and they have deals with their artists. This program is meant to complement the licensing deals we already have in place with labels and distributors for access to music on the service, adding an additional direct revenue channel to artists and providing a new element of transparency around the streaming music model.”
The need for artists, music entrepreneurs and executives to adapt to technology was highlighted last week as the head of the new EMI/Universal discussed the company’s area of focus going forward. And industry analyst Mark Mulligan followed up the previous week’s keynote speech about whether or not streaming services have hit their ceiling with more stats supporting why Spotify must change its business model in order to grow. Also, the chairman of the Production Music Association (PMA) talked about how the landscape for film and TV music has changed in the past few years and how music supervisors are choosing artists and tracks to use in their various projects.
Are Smartphones and Tablets the Future?
The chairman of the new EMI/Universal conglomerate Lucian Grainge announced the company would be focusing heavily on developing strategies for smartphones and tablets in order to expand its reach to Brazil, India and Egypt, according to a report in Financial Mail.
The EMI deal was finally cleared by the European Commission on Friday, contingent upon it getting rid of some of its assets. Grainge stated that the rapid expansion of Google’s Android platform for touchscreen phones as well as increased sales of the iPad and other tablets provides an opportunity to vastly increase the sale of digital music.
According to Grainge, “The trends that we are seeing alongside the spread of the latest technology, from tablet computers to the Android phones, make emerging markets increasingly attractive for digital music – and that’s paid-for digital music or digital music with revenues attached …”
Universal/EMI will be looking at countries like India, Brazil, Turkey and Egypt, which have been shown to be full of music fans that want to hear music from local and international artists: “Content is at the heart of it – the most important part.”
Grainge pointed to The Beatles – whose catalog is part of EMI’s assets – as proof that bands and artists can continue to make money off their recordings throughout the world “forever.”
Grainge is tasked with getting rid of approximately 30 percent of EMI’s revenues to meet the demands of the EC. He plans to hire an executive to oversee this process, which will mostly unloading parts of the Parlophone label catalog. EMI’s current chief executive, Roger Faxon left the company on Friday, with more layoffs to follow.
Mark Mulligan: “Losing Free Customers is a Good Thing for Spotify”
Top music industry analyst Mark Mulligan was met with some skepticism from the music business in recent weeks when he questioned the actual growth potential of companies like Spotify, Rdio, Mog and Rhapsody as part of his speech at the Future Music Forum in Barcelona. As a rebuttal, he gave further context to Spotify metrics in an entry on his own Music Industry Blog on September 24.
Mulligan said, numbers show that Spotify had to acquire about 1.8 million users per month just to keep 400,000 of them. Estimate are based on the fact that Spotify reported 32.8 million registered users at the end of 2011, 10 million of which were active. And in March, 2011, Spotify reported 1 million paying subscribers – 15% of active users – putting their active users at 6.7 million. Spotify announced 10 million registered users in September 2010.
Mulligan admitted that there are likely “monthly and seasonal variations” in these figures, causing the exact numbers to be different each month, and that many of the 1.4 million new monthly users that lapse may pick up the service again later in the year. But regardless, if 2011 is any indication, Spotify has to sign up quite a bit of new users than it keeps.
Mulligan also pointed out that this customer loss is actually not a sign of an ailing business model: Losing low-level and free users will actually strengthen Spotify’s business going forward. Since Spotify’s model is about ideally selling premium subscriptions – which is what will help the company itself, along with labels, publishers and artists make money from their work – the “free” part of its business is just a marketing tactic. The number of free users that keep listening is not actually important. What is important is how many of them convert to paying customers.
“… It benefits Spotify if those users who have no intention of paying churn out early on from the free service as it means less cost to Spotify’s bottom line. As challenging a path towards profitability as Spotify may find itself on, it would be a dramatically more difficult road if all of those 32.8 million users were active. So Spotify’s business model and margins actually benefit from the majority of those new free users churning out of the service early, allowing Spotify to focus on migrating the remaining engaged free users to paid.”
And this “free churn” concept is what led Mulligan to question the profit opportunities for streaming services. As he pointed out, while the “free-user-leakage” factor fits in with Spotify’s business model, it challenges the foundation of that model.
Two-thirds of Spotify’s customers in 2011said “no” to something that was free, which means that streaming audio may not be appealing enough to music fans. The reasons that Spotify’s free users disappear are varied and include advertising, the inability to burn to CD and the fact these digital tracks cannot be downloaded for offline listening. While a lot of these issues can be rectified by paying $9.99 per month, the average consumer is not spending that much money on music monthly anymore. In fact, that number is the average spend for only the top 20% of music fans.
Mulligan stressed that because most consumers will not experience the incredible ease of use and features attached to the full streaming audio experience, they will never be enticed to pay for it. Therefore, cheaper price points will be the key for Spotify and other streaming services going forward.
Production Music Hitting a Crossroads
Where is production music heading in the future? And how can artists get their music into film and television?
These are some of the questions Sonic Scoop asked newly-appointed Production Music Association (PMA) Chairman Randy Thornton recently, in anticipation of the organization’s upcoming gathering, “The Future of Production Music: Opportunities, Challenges & Threats” on October 11 in New York City. The PMA is a non-profit organization that promotes and protects the rights and interests of publishers and composers of music used in film, television, radio and other media. Thornton, also the CEO of Warner/Chappell Production Music said he is anticipating some big challenges for those working with production music going forward.
The production music market has actually managed to stay profitable and stable, even while the rest of the industry has been thrust into chaos. However, while the number of production music catalogs and creators has been expanding, the amount that customers have to spend is decreasing. And the retitling of tracks – which is legal and lets rights holders put the same song in a variety of libraries – is creating some confusion for those distributing revenue.
Thornton pointed out that the biggest issue in the production music industry as it expands has become keeping the quality of music high and selling that quality to those that have much less to spend than in previous decades: “I feel that the biggest challenge currently facing the production music industry is that of maintaining the value of our music in the marketplace … The current environment is one of increasing competition for ever-dwindling budgets. The upside is that there are more potential clients than ever. The downside is that many clients are being squeezed financially and are therefore pressured to look for ‘alternative sources/practices’ for production music, many of which are detrimental to the sustainability of the industry as a whole … I feel that it is critical that we strive to maintain or elevate the value of our music, thus enabling a viable financial future for our industry as a whole.”
And the landscape has changed significantly in the past five, to 10 years. The PMA currently represents 450 catalogs, which is ten times more than it represented a decade ago. And decreased budgets, combined with the splitting apart of many TV, film and new media companies has created mass confusion when it comes to analyzing licensing models and the cost/benefits of each one: “Education and a commitment to understand current needs on both sides of the fence are crucial to ensuring real progress for our industry.”
Thornton stressed that he feels recent changes in the production music climate could actually provide positive opportunities: “The production music industry has consistently grown in both size and quality over the past 10 years: Long gone are the days of clients bemoaning the fact that they ‘had to use a library cue.’ The creative and production values of current production music works are leading the world in many segments of the market, including the work of many GRAMMY and Emmy award-winning composers and producers.”
And this could offer many new artists the chance to start diversifying their careers by writing production music: “Clients have a huge choice these days when it comes to choosing music, and their choice more often than not centers around creativity and production values — both of which are good news for our industry!”
This past week, recent major changes in the music climate were the main focus, as Universal Music Group (UMG)’s bid for EMI’s music division and a top music industry analyst questioned whether or not streaming music is already approaching its peak. Additionally, Musicmetric numbers showed that Australia has the highest instances of music piracy based on its population. And finally, Jimmy Osmond provided important tips for bands that want to sustain the over-50-year career that the Osmonds have enjoyed in the industry.
Universal’s Bid for EMI Approved
UMG’s acquisition of EMI Group Ltd.’s recorded music division for $1.9 billion was finally approved by regulators in the U.S. and abroad on Friday morning. This merger, which has been hotly contested by artists and professionals on all sides of the industry will put the label in charge of the entire Beatles catalog as well as the albums of artists like Coldplay and Katy Perry. This approval marks one of the final steps necessary to making the once four major record labels into three.
The U.S. Federal Trade Commission approved the deal with no exceptions, whereas in Europe, the EU will force Universal to sell a large number of EMI assets to keep the playing field fair for independent labels.
UMG officials were excited about their victory. Chairman and CEO of UMG Lucian Grainge told the Los Angeles Times, “[The merger] will allow us, I hope, to do our bit to return the industry to growth … It will enable us to continue to invest in more music, to create investment opportunities for the entire Universal group, it will give us the opportunity to work with entrepreneurs in different genres and it will give us a cushion through this crucial crossover period as we hurtle toward a primary digital business.”
UMG contributed to 29.9% of total album sales in the U.S. in 2011, which put it ahead of Sony Music Entertainment’s share of 29.3% and Warner Music Group’s 19.1% share. EMI held 9.6% of sales, whereas smaller independent labels had 12.1 percent.
Is Streaming Music at its Peak?
The surging popularity of streaming music services has given labels and artists hope that they can finally adjust to and profit from music’s shift to digital. But top music industry analyst Mark Mulligan, in his keynote speech at Future Music Forum in Barcelona on Thursday called this optimism into question, calling into question the actual growth potential of companies like Spotify, Rdio, Mog and Rhapsody.
According to Mulligan, while Spotify is a bright spot, everyone should learn lessons from past technological advances within the business: “There is a natural ceiling of adoption of the people who are willing to pay $9.99 a month for music they don’t own … If you look at growth from launch, Spotify is – at best – on par with where we should be. The likes of imeem were the future of the music industry once, too. The most Vodafone (UK) got to was about 600,000 customers. Spotify’s (UK) paying subscriber count is about 600,000, to 800,000 … This market should be much more dynamic than where we are now. It’s a niche proposition. The majority of mass-market consumers are still not interested in the pricepoint.”
As skeptical as Mulligan admitted he is, he acknowledged the efforts of digital pioneers like Rhapsody, and encouraged those that have enjoyed quick success to continue to work to improve their business models: “It took Rhapsody 11 years to get to one million users, it took Spotify nine quarters … Spotify has to work really hard to get to where it wants to be.”
He said Spotify especially needs to work on creating a mainstream model that will satisfy more than just the early adopters, who enjoyed unlimited access for free: “Spotify is having to acquire 1.9 million new customers a month in order to retain 400,000. It’s a huge, huge marketing problem. The average pay TV service would want to see churn rates in the low single-digit percent … They’re having to work so hard to keep where they are – like a duck: It may look serene under water, but underneath it’s legs are going like the clappers … What it shows us is that streaming clearly isn’t for everyone.”
However, subscription services are banking on new devices and mobile carriers that give them the chance to bundle services with products and get new customers. And these efforts were not possible when imeem was trying to gain its fotting and Vodafone was only offering a music subscription service to its own customers. Still, as competition increases and music services go after the same partners to create bundles, they may experience some barriers to growth.
Ultimately, Mulligan stated that downloads have not provided “hockey-stick” digital growth for the industry, and streaming, as with any other business model will have its own growth end point. He challenged music entrepreneurs to continue to improve the packaged music experience they are offering and find a way to incorporate exciting artwork, access to lyrics, chats with bands and other engagement opportunities and then monetize this format.
Australia Revealed to Have the Most Music Pirates
Information from bit torrent sites gathered by Musicmetric revealed that Australians download more illegal music, more frequently based on their population than any other country in the world, according to an article published on The Age. Conversely, Australian music fans also pay for downloads and purchase physical albums at a surprisingly high rate.
The Musicmetric survey showed that Australia placed sixth in the top 10 for music downloads in 2011, with 19 million. The most downloading country was the U.S., which downloaded music 96,681,133 times, twice the next-highest-downloading country, which downloaded 43 million units.
Of the 19 million downloads in Australia, which has a population of 23 million, the number of them obtained through illegal sites was higher than in any other country. And interestingly enough, the most popularly-illegally-downloaded artist was the local Adelaide-based hip-hop group the Hilltop Hoods. The manager of the group, Dylan Liddy, was skeptical of Musicmetric figures, but said that illegal downloads are unfortunately just something artists have to accept as the shift to digital continues to take place: “We are in the business of selling records so it would be great if we could monetise everything. But at the moment, the way that the music world has moved is getting illegal downloads and that’s very hard to police … It is what is. It’s great that the boys are popular.”
Still, Liddy said that while the Hilltop Hoods provide an example of the problems with illegal downloading, they also are still selling records in their home country, which is currently enjoying some of the best sales numbers of any country globally. The band’s latest album, Drinking From the Sun continues to be in the Top 40 on the Australian sales charts, seven weeks after its debut and has sold over 70,000 copies in all formats combined.
Many in Australia are taking Musicmetric results on downloading with a grain of salt, though the numbers are noteworthy when compared to those offered by the Australian Recording Industry Association (ARIA) for 2011. Both sets show that Australian music fans are comfortable with digital music. ARIA found that legal digital sales have continued to rise, and sales were up by 37 percent in 2011, with digital sales also taking up 37% of the market. ARIA also found that 25% of downloading was done via illegal sites.
Jimmy Osmond: “How to Survive in the Music Industry …”
Jimmy Osmond, the youngest member of the Osmonds recently spoke to the Daily Herald about how his family’s band has managed to find success in the music industry for 54 years – longer than any other group in history. He said that while recording and performing has become such a normal part of his life that he does not really even think about it anymore, he has learned a lot about maintaining success along the way, especially as part of a band and not a solo artist:
- Have fun. As Osmond has realized, there is no way anyone can spend a long time in showbiz unless he/she is having a great time along the way: “We’ve never stopped, for 54 years, re-creating ourselves … just because we love it.”
- “Know your strengths.” Band members need to be able to respect everyone’s roles and talents. According to Osmond, he sometimes thinks of himself and his siblings as fish in an aquarium: “Marie is our beautiful angelfish; Donny is the shark; Wayne, with his jokes, would be the clownfish, and so forth … I’m the little sucker fish, zipping around keeping the tank clean.”
- Embrace change. Keeping things fresh is what keeps bands interested in their music and the experience of creating art together … and also what holds fans’ attention: “Part of keeping it fresh for yourself and for people who follow you is change … We’ve had country hits, pop hits, rock and roll hits – we never wanted to be bored with us either.”
- A sense of humor is imperative. Osmond stressed that getting caught up in being successful can make the experience of being in a band and making music a chore. He said, “We don’t take ourselves seriously … We’re just doing what we do because we love it. We’ve never had those moments where we’re so narcissistic that we stop enjoying what we’re doing.”
- Have a dream. Sometimes bands can let ambition get the better of them and stop setting challenging goals. Osmond recently decided to book the biggest tour he and his brothers had ever done – so big, he wondered whether or not anyone would show up: “We played 51 dates and sold more than 100,000 tickets … We’re going to kick off another 50 dates in January.”
- Take a cue from Elvis. Though he has received a lot of advice along his journey as a musician, Osmond said that one of the best pieces came from Elvis Presley when they played together in Las Vegas: “He always emphasized, ‘No matter what, take time for your fans … As you go up the ladder, be kind to everybody, because you’re definitely going to see them on the way down.”
This past week, focus fell on new and necessary marketing and music-making techniques for artists, as analysts pointed out the importance of touring internationally for superstar artists, and Jeff Tweedy of Wilco discussed which is more important – the live show, or the record. Also, musician and entrepreneur Gwilym Gold helped discover a new music format that could help keep tunes fresh and personal.
Superstar Artists Turning to International Touring for Salvation
Superstar artists like Lady Gaga, U2, Coldplay and even Justin Bieber will have to travel the world in order to stay in business, according to an article in The Times. In its annual Global Entertainment and Media Outlook, financial firm Pricewaterhousecoopers predicted that sharply declining CD sales and low spending by fans on digital and even live music will make reaching a global audience an absolute necessity for acts of all sizes in the coming months and years.
The report forecasts that there will be a major decline in CD sales between 2012 and 2016, and while digital spending will increase, it may not be enough to make up for the physical product loss. Currently, CD sales take up about 60% of the music market, but that will likely decrease by 23% in the next three years. If acts amp up their international touring presence, live music could help offset the decline.
Tony da Silva, COO and finance director of EMI said that in spite of concerns over more money lost in the music industry in 2012, there are some positive factors: The industry has declined by 3.9 percent so far this year, but this did not match up to earlier predictions that it would shrink by 5 percent. And in good news for independent and emerging acts, while international music scene has declined by 9 percent, sales of local artists within a variety of countries has increased by 1.6 percent. Globally, the sale of local music has gone up by 50 percent.
Overall, da Silva said he is not worried and sees it as just a natural growing pain: “We’re certainly not panicking. From some of the discussions we’ve had, it is something we expect because it has happened five to seven years earlier in some of our established markets. We believe there is still a very strong market.” But he added that labels will need to start thinking very carefully about how they spend money on artists and take fewer risks than they have in the past: “It has become quite essential for labels to think carefully in terms of where they allocate their money. A few years ago, you could take a couple chances.”
Jeff Tweedy, on Connecting, the Live Show and the Record
Jeff Tweedy recently discussed his views on the changing music industry and shared his opinions on where he feels artists should focus in the current market. In a reader-directed interview with the The A.V. Club, the Wilco frontman talked about how the need for artists to be transparent and connected to their fans in the current music landscape has challenged his privacy and if the live show is becoming more important than recording for musicians that want to find success.
When asked how he was managing fans’ expectations of getting up close and personal with him and other artists, Tweedy said, “I don’t know if I’ve come to terms with it. I think I’m kind of confronted with it infrequently. That might be the case. Mostly I feel flattered that someone has formed that kind of relationship with my music or my persona. I think it’s really sweet.”
In last year’s interview with The A.V. Club surrounding the release of Wilco’s The Whole Love, he mentioned that going forward, many bands need to start thinking of fans as collaborators who are integral to their ability to make a living pursuing their passion, instead of as consumers. As a follow up to this, he said he sees festivals, including the A.V. Fest (which begins tonight): “I think it’s great. Hopefully [as a festival organizers are] treating people coming … as collaborators and making something enjoyable to be a part of and something worth attending. [Fans] are going to play a big role in that. I don’t know why you wouldn’t want to acknowledge that. It does seem like the smaller the stakes have gotten in rock music, the smaller the scale of everything is, at least on the record-sales run. It’s allowed people to be much more focused on playing live and being face to face. It adds a level of intimacy with your audience that maybe has been lost for a while.”
And while he has embraced more personal contact with fans, he added, there is a good reason he does not have a Twitter account: “I didn’t sign up for that. I just wanted to be in a rock band and make music and write songs and stuff. That’s more about actively participating in your celebrity. It’s like an inability to go 10 minutes without somebody saying, ‘Look at me…’ That’s not really being private, I think that’s just being sane.”
Tweedy also stated, he believes musicians need to get real about their careers by understanding that record deals are not and have never been the way they will be saved from their on-going struggle. Instead, they need to take control over drumming up fans and running their careers like a business: “Record companies do not keep musicians employed. There’s definitely a place for record labels, but record labels are more like banks than employers. They subsidize things, and you have to pay them back. Really what keeps people employed in the music business is whether or not you are at all able to sell records. That’s really not changed, I don’t think. The only way it’s changed is that it’s more skewed toward the live performance now, and that’s fine by me. That’s the way we’ve kept ourselves alive for a long, long time. If a band can attract an audience or attract some people to see them play, then generally they can work. It’s always been really hard to be a musician and make a living. It’s never been a really sure-fire, rock-solid career choice. And I think you’re really [screwed] if that’s what you’re going into it for.”
In in his view, musicians also need to see the struggle of being a working musician as an “adventure:” “You have to look at it as some sort of adventure. You’ve got to be willing to sleep on people’s floors and be excited about the fact that you can play music for four people five hours away from your hometown. I don’t know. That’s pretty fun. Like camping.”
While Wilco has definitely maintained an active touring schedule over the years, Tweedy said that touring has become even more important to him and other artists in recent years with the rise of digital music. But when asked whether artists should focus more on creating a stellar live show or on crafting a perfect album, he said, “That’s a real ‘Which came first: chicken or the egg?’ kind of question for me. I feel very fulfilled by both activities, both endeavors. I feel a great deal of personal satisfaction when I write a song, when I finish a song. That feels really great. Not even judging the song being good or bad, it feels really great to finish a song. That’s a very personal kind of satisfaction. I think playing a show and being a part of an environment where people have come together and had this experience together and had a fun time losing themselves in a wash of people and music, I feel—not really a personal fulfillment or satisfaction. It’s more uplifting in the sense that I feel connected to people. I really wouldn’t want to have to live without either one.”
BRONZE: Further Personalizing the Listening Experience
Musician Gwilym Gold, former leader of the indie band Golden Silvers and producer Lexx recently enlisted the help of researchers at Goldsmiths, University of London in order to create a new commercial music format that changes a song each time it is played, helping artists create revolutionary recordings and albums that have some of the spontaneity of live performances. The technology, BRONZE is meant to offer a different audio experience to users each time they listen to the same song. Lead Scientist Dr. Mick Grierson stated that the format is designed so that a music file is no longer “static.”
Every time the track is heard, it will be recognizable, but some aspects of it will be slightly changed. As Mark Raby at Geek.com said, “Think of it as going to every live Bon Jovi concert — because he’s human … no two performances will ever be identical.” The goal of scientists and Gold was to create a format that would achieve some of the uniqueness of live shows and help enhance the concept of a music collection. Designed with producers and composers in mind, BRONZE is the first commercial music format ever to exhibit these properties and has been used by Gold for his debut solo album Tender Metal.
Scientist Grierseon said the music works across genres: “BRONZE is a brand new creative process, where the composition and production of a musical piece no longer requires the final work to exist in a static form. It can be used for any genre, including organized, highly structured music such as rock, pop and dance music … The quality is equal to that achieved through professional authoring tools. The track will be subtly different each time, whilst still retaining the quality and balance of the original mix.”
Gwilym Gold is the first artist to use BRONZE as part of a release. While support for Android, PC and Apple desktop computers is in the works, his album is available only via Apple platforms (iPhone, iPad and iPod).