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Music Marketing

Posted By Musician Coaching on July 6th, 2013

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.

 

State of the Music Industry Part 3

Posted By Musician Coaching on January 20th, 2010   
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I wasn’t really expecting a part three to this article but it seems there was quite a bit of excitement about the statistics that Tom Silverman had mentioned in the first part of this interview.  Tom was kind enough to add more information.

I will add only this – that of all of the people I know who did really well for themselves in the old world of music- Tom Silverman is one of the only executives I have met who actually really cares about the future of the music business unrelated to getting a paycheck.  Thanks again for this Tom.

Please check out the New Music Seminar in Los Angeles on February 1st and 2nd.  Readers of MusicianCoaching.com can get a two for one discount by going to www.newmusicseminar.biz. and entering the code “nmsla2”.

Tom Silverman:

In preparing for the February 2nd Los Angeles New Music Seminar, I wanted to learn more about how many new artists are breaking each year. After all, the New Music Seminar is dedicated to helping more new artists break.

First we had to determine the definition of breaking. At the New Music Seminar we identify the obscurity line arbitrarily as 10,000 albums sold in the year of release.  That is not a hard number, nor is it the only meter of success.  300 hard ticket sales for a headliner in multiple cities might be another definition.  25,000 paid single downloads might be another. I’m sure there are many more but 10,000 albums doesn’t sound as elusive as gold or platinum (those archaic arbiters of success) or even 50,000 which only a decade ago might have been considered below the obscurity threshold. Looking at the 1517 albums that were released in 2008 and sold more than 10,000 units in 2008 we find that only 225 of them were by artists that had surpassed 10,000 for the first time in their career (either by themselves or with another band).

The vast majority of these were released by significant indies (110) or majors (103). Last Friday, I thought that only 14 of those were self released artists or artists on start up labels. Further inspection disqualified two of them. One was a gospel record whose Bishop had exceeded 10,000 in the past under a slightly different name and the other was a Soundscan placeholder for a title distributed by Anderson Wholesale, the distributor for Walmart, that showed the title “TBD.”  We had thought it was a Dutch electronic artist called Anderson but alas, nay.

Who were these valiant artists?  A quick inspections indicated that beyond Bon Iver, the real indie artist success story of 2008, there were three hip hop artists, one that had financing of $10 a unit in marketing spend to sell under 30,000 units, another associated with the big indie hip hop powerhouse Tech N9ne and the last a gospel hip hop artist.  The rest were largely alternative rock artists, two had been contestants in America’s Got Talent or American Idol and a few others were on small labels with big budgets.

What does this say about the Chris Anderson “Long Tail” promise?  Clearly the ease of making and distributing music does not benefit “breaking” music.  Breaking music requires mass exposure which requires luck or money or both. I can say with great authority that less new music is breaking now in America than any other time in history.  Technology has not helped more great music rise to the top, it has inhibited it. I know this is a bold statement but it is true.

Perhaps the greatest challenge to all of the technologists that participate in the New Music Seminar is to correct that issue so that great music can rise to its true potential regardless of politics, power or money. I believe that the next decade will bring improvement to the music web that allow that to happen. In the meantime, artists can still make a very good living without selling 10,000 albums by careful cultivation of their fan relationships. This is another theme of the New Music Seminar…redefining the music business around the artist/fan relationship…how to manage it…how to monetize it.  Records are no longer currency in the next music business…fans are.

Here’s the list of the 12 artists that sold over 10,000 albums in 2008 for the first time.  Remember these are 12 albums out of 105,575 new album releases that year.

BON IVER
Record Label: Jagjaguwar (US/CAN)
Album: For Emma Forever Ago            103,112


TMI BOYZ
Record Label: TMI Entertainment
Album: Grindin’ For a Purpose                      29,119


CAS HALEY
Record Label: CaptainHooks, also Big Karma Records, a “Texas start up label”
Album: Cas Haley                   22,580


DUKE SPIRIT
Record Label: SHANGRILA
Album: Neptune                           19,403


EYES SET TO KILL
Record Label: BreakSilence Recordings
Album: Reach                            16,133


PROZAK
Record Label: Strange Music Inc./ DeadMan Productions Inc.
Album: Tales From the Sick                                14,929


SLIGH*CHRIS
Record Label: Brash Music
Album: Running Back To You                         14,785


REBEL SOULJAHZ
Record Label: GO Aloha Entertainment
Album: Nothing To Hide                                 14,262


BLIND PILOT
Record Label: Expunged Records,
Album: 3 Rounds & A Sound                                 11,281


MORNING BENDERS
Record Label: +1 Records
Album: Talking Through Tin Cans                       11,201


STS9
Record Label:  1320 Records
Album: PEACEBLASTER                    10,601


TRIP LEE
Record Label: Reach Records
Album:20-20                   10,003

Continue on to the 4th and final part of this series…

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18 Responses to “State of the Music Industry Part 3”

Sander van Zoest

I would assume that there might be artists out there that are doing direct to fan type sales that are not being accounted for. Also, it would be interesting to know who made an equivalent amount of revenue as 10,000 albums and what other sources the rest came from.

SceneKid

BreakSilence Recordings is an imprint of Suburban Noize, an established Indie, so scratch Eyes Set To Kill off the list.

Musician Coaching

JagJaguwar (Bon Iver) is also a large indie. While I can’t speak for Silverman he may have meant indies distributed or otherwise affiliated with majors. I will get clarification from him soon.

SceneKid

The criteria could also be his phrase “startup label”. BreakSilence would technically fall under that, founded in 2007, although the parent label Suburban Noize was founded in 1995.

Robert Collings

No disrespect to Mr Silverman intended, but what does “breaking” — a meaningless term — have to do with anything?

The only thing that matters in business is profit: not market share; mind share; number of records sold…profit!

Ipso facto if an artist’s profits are sufficient to support a full-time living writing and performing music then that must equate to success. No?

And an artist’s revenue streams extend well beyond selling records, which of course we all know.

This is the kind of entrenched thinking that sites/services like this one really should challenge.

All that said, I can’t argue with the notion that to grow a music industry business significant capital can be required, and usually that capital will come from a record company.

jeff Price

Well some good news, Tommy is dead wrong. The truth is more artists and bands are breaking now in America, and around the world, than at any other time in history. Technology has absolutly helped more great artists and bands rise to the top.

The Nielsen data cited is not only incomplete, but also provides a false analysis.

Let me provide you some hard stats to back this up:

According to Nielsen and Tommy there were:
“…106,000 new (music) releases in 2008″

In 2008, TuneCore released approximately 90,000 newly recorded releases

This means, according to Neilsen and Tommy, almost every single new music release in 2008 was distributed via TuneCore.

I know this simply not to be true – the base assumption that Tommy is making is as dead wrong as his other statistics.

Another example, Tommy states:

” just 225 of those (the new releases) were new artists surpassing the 10,000 unit threshold for the first time. ”

This is an empirically false statement for a few reasons.

First, in order for Neilsen to accuratly track sales, the UPCs for those albums must be pre-registered in their database. If the UPC is not registered in its database, Neilsen can not match the sales data to an album (or song). For example, if a digital store tells Neilsen it sold 100 copies of UPC # 123456789, and Neilsen has no idea what UPC # 123456789 is, it can not report the sales.

Next, the majority of the 90,000 releases via TuneCore in 2009 were not registered with Soundscan therefore making it impossible for them to track or report on the sales.

But these two points are actually kind of moot. Music is no longer bought by the album, it is bought by the song across an artist’s catalog. Tracking album sales as the sole indicator to determine if something is “breaking” is analogous to tracking only vinyl album sales to determine if something is “breaking”

Some examples:

When they were unsigned, the following TuneCore artists sold the following quantities of songs across their releases:

Kelly sold over 2,000,000 million tracks
William Fitzsimmons sold over 150,000 tracks
Soulja Boy sold over 200,000 tracks
Boyce Avenue sold over 1,200,000 tracks
Ron Pope sold over 250,000 tracks
Colt Ford sold over 300,000 tracks
Secondhand Serenade sold over 250,000 tracks
Tapes N Tapes sold over 200,000 tracks
Nevershoutnever sold over 1,000,000 tracks
Drake sold over 300,000 tracks
MGMT sold over 225,000 tracks
The Medic Droid sold over 150,00 tracks
Nickasaur sold over 150,000 tracks
Harry and the Potters sold over 200,000 tracks

This is just a very quick partial list that goes on and on and on

Under Tommy’s model, none of these artist sales count as they are not “album” sales.

With all due respect, Tommy might discount selling over 1,000,000 songs by an “unsigned” artist as not “breaking”, but I do.

On a macro level, in 2009 alone, the internet allowed the “long tail” unsigned artists that used TuneCore to generate over $32,000,000 in music sales by selling over 42,000,000 songs – this is more than one song a second selling by a TuneCore Artist on iTunes. This “long tail” catalog that TuneCore’s Aritsts represent is now one of the most valuable music catalogs in the world. And this all happened due to the net, social networking and access to the media outlets (like YouTube).

“Breaking” is not just about selling albums or even just the music – it is about generating revenue off of fame. This is done via merch, gig, publishing, music sales, ad revenue and more. Nevershoutnever sold over 35,000 t-shirts in a number of months via a regional sales program with Hot Topic. Surely Tommy does not mean to discount these sales and revenue simply because the artist is selling merch? How about if the band sold no music but consistently sold out 1,000 venue clubs and made $15,000 a night? Why does Tommy discredit bands for their success if they are not selling “albums”?

Another distributing and incorrect point suggested by Tommy is that music sales are down due to the fact that there is more music available to buy, share and discover.

As a matter of fact, its quite the opposite

In the late 90′s – also known as the “golden age” of market share and revenue for the music industry – more music was being released and bought than ever before (as an example, Warner was releasing one new release a day). Despite this increase of releases, sales (not just revenue) went up, not down.

Or from a pure logic perspective, if iTunes had 2,000,000 less songs, would an artist that is not selling now as no one likes their music magically start selling. Or to flip it around, I would suggest more music on the virtual shelf causes more music to sell as it allows the music buyer to discover music via the digital stores own recommendation association engines.

Tommy’s goes on to state:

“Breaking music requires mass exposure which requires luck or money or both.”

This statement is also dead wrong – and he knows it based on is own experiences at Tommy Boy.

Historically, in the music industry, 98% of what the record labels distributed, spent hundreds of millions of dollars on to market and promote and get played on commercial radio and MTV did not “break”. If “breaking” simply “required mass exposure”, there would have been a 98% success rate, not failure rate. But music is not a math equation, and therein lies the problem with Tommy’s statement. Yes, to break you need exposure, but that by no means guarantees success. The music has to cause reaction. For example, if “Smells Like Teen Spirit’ was not a song that people liked, it would not have mattered how much money was spent on getting you to hear it.

And that’s the excitement and beauty of the internet. The masses now have direct access to the media and “music discovery” social networking outlets. – i.e. YouTube, MySpace, Facebook, Twitter, Pandora, Jango and more. These new social networking and media vehicles allow mass communication in an instanteous fashion at a click of button. Suddenly one person’s opinion does matter and can can impact a bottom line. Even the digital stores themselves provide a vehicle to market and promote yourself off off (i.e. iTunes iMixes or recommendations of other music to buy). Through these vehicles the internet has delivered the ability for anyone to “break”, and they actually are. The masses now have access to the media outlets to get heard. The problem is the old school view that “breaking” is simply defined by selling albums. This could not be farther from the truth.

Tommy also goes onto say:

“I can say with great authority that less new music is breaking now in America than any other time in history. Technology has not helped more great music rise to the top, it has inhibited it. I know this is a bold statement but it is true.”

It might be a bold statement by Tommy to help get headlines, but it’s also false (and kind of silly). The truth is more artists and bands are breaking now in America, and around the world, than at any other time in history. Technology has absolutly helped more great artists and bands rise to the top.

The distressing part for me about this is based on Tommy’s statements, if an artists’ release is not counted by Neilsen than it is not actually released. If music does not sell as an album then it has not sold. In effect, he is de-legitimizing artists.

With all due respect, I believe an artist’s release should “count” even if not recognized by Neilsen as this de-recognition closes off possible opportunities based on the perception that a release is not “real”

I also find it distressing that the media, and other outlets, turn to Neilsen as the definitive source to determine what is occurring in this industry thereby decreasing the opportunities for musicians and artists that are not part of this old school system.

The reality is the majority of music is now being created, released and sold outside of the traditional system. Ad agencies, music supervisors, video game manufacturers, radio programmers etc turn to Neilsen for information to discover music in an attempt to use/license it. They need to understand that the Neilsen information is an incomplete and an inaccurate portrayal of reality. This inaccurate perception is holding back opportunity and validation for others. Tommy needs to stop propagating this false perception as it hurts artists.

It’s important that an accurate picture of what is occurring be presented to fans and businesses to provide additional choice and opportunity for musicians. They work hard enough as it is, the last thing we need to do is propagate a false reality to hurt them. Tommy’s heart is in the right place, we are here to help musicians, but let’s start with a more accurate description as opposed to a “bold” but false statement that helps promote an agenda.

Musician Coaching

@Jeff… In part three of the interview he states that albums sales were not the only criteria for success- just the one he was looking at.

If you have something to add about these success stories that is usable for the aspiring artist- I’m happy to set up an interview any time.

Best,

Rick

Tony

It’s true what Jeff Price says – Nielsen figures are no longer an accurate nor representative measure of what’s going on vis-a-vis sales of recorded music.

The industry has changed, more new artists are building careers and breaking today than ever before. It’ll take time for the old-school players to accept this reality, and even longer for the mainstream media to get the picture.

Doesn’t matter. These musicians and their audience know what’s happening.

catullusrl

It’s well known that Chris Anderson’s Long Tail theory is a load of rubbish.

The Quarterly: Will the Internet bring down barriers, making markets more democratic?
Eric Schmidt: I would like to tell you that the Internet has created such a level playing field that the long tail1 is absolutely the place to be—that there’s so much differentiation, there’s so much diversity, so many new
voices. Unfortunately, that’s not the case. What really happens is something called a power law, with the property that a small number of things are very highly concentrated and most other things have relatively little volume. Virtually all of the new network markets follow this law.
So, while the tail is very interesting, the vast majority of revenue remains in the head. And this is a lesson that businesses have to learn. While you can have a long tail strategy, you better have a head, because that’s where all the revenue is.
And, in fact, it’s probable that the Internet will lead to larger blockbusters and more concentration of brands. Which, again, doesn’t make sense to most people, because it’s a larger distribution medium. But when you get everybody together they still like to have one superstar. It’s no longer a US superstar, it’s a global superstar. So that means global brands, global businesses, global sports figures, global celebrities, global scandals, global politicians.
So, we love the long tail, but we make most of our revenue in the head, because of the math of the power law. And you need both, by the way. You need the head and the tail to make the model work.

http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229

Jennie Walker

They say a good lawyer can argue either side of a case.

Comments like Mr. Silverman’s will continue to make news until a group of enterprising artists prove him wrong.

That will be me!

Jennie Walker

SceneKid

Could Jeff’s interesting & elaborate response be smoke & mirrors? Tunecore seems to be on a mission to point out that Soundscan is a.) outdated, b.) sucks, or c.) is irrelevant. Hey Tunecore, some artists just want their sales tracked by Soundscan. Why don’t you give your customers what they want?

Farrington

It seems to me that Tom’s analysis was clearly based on sales figures from soundscan AND he clearly states that the only information his conclusions are based on are SOUNDSCAN figures. I don’t see what the fuss is about, this is his “state of the industry” based on music sales, and based on album sales. In reading Jeff’s reply it seems he thought that this summary of album sales somehow threatened his business and felt he had to respond… however, the challenging question that Tom asks is “how do artists break through” To me this means how do we not only survive, but how do we build a career and truly prosper using technology and the internet? does the current technology help us rise to the top, or is it muddying the water and making it more difficult for us to stand out” It’s an excellent question. The old school record labels may be out of fashion after 4 decades, but Tunecore will be out of fashion before the end of this decade if not sooner. None of the new technology companies (list 1000′s here) spend time, effort, or money on building careers or breaking an artist. They offer tools so you can do it yourself or provide a storefront for fans to find your music (great solutions for a brief period) and when there’s demand, but when music is shared freely all of these companies will disappear. Sorry Jeff, I love your service, but you can’t compete with a man that has spent 30 years ahead of the curve. Tommy discovered a new lifestyle “hip hop”, took it from the streets to the mainstream and launched many many careers using his passion, vision, and YES his money.

I just registered for the New Music Seminar and look forward to speaking to Tom further about his question “How do we create tools that make it easier for artists to break?”

I’ll close by saying that although Kelly selling a few million tracks is impressive (thanks youtube) — I have never bought a ticket for a concert, or a t-shirt by an artist with one hit single (at least not that I will admit to).

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