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Music Marketing

Posted By Rick Goetz 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.

 

Posts Tagged ‘Billboard’

Ad-Funded Streaming Services, Unpaid Interns and Careers in the Music Industry News August 18, 2013

Posted By Julia Rogers on August 18th, 2013

Tech executive Adam Good talked about why the subscription-based streaming music service business model will stand the test of time. And The Guardian explained why unpaid interns are bad for the music industry. Also, Billboard presented the best cities in the U.S. to live in for those that want to work in the music industry.

 

 

Will Ad-Funded Streaming Fail?

 

Many in the music industry, from small technology entrepreneurs, to major companies like Google and Apple are getting into the streaming music business. Pandora recently hired a sales team in order to sell its new local station offering, and iHeart Radio announced plans for brand-sponsored music channels. Later this year, Telstra will be launching a new streaming service called Daisy in conjunction with producers Dr. Dre and Jimmy Iovine.

 

But according to AdNews and Telstra director of digital media and content Adam Good, the ad-funded model some services use could eventually be what sinks them. Good said, “[Music streaming] has to be a subscription-funded model [because the] ad-funded model doesn’t particularly excite the music industry. Studios are not thrilled about buying into ad-funded services, because these services run the risk of creating a “back catalogue” of old music rather than showcasing the best new music:  “So over time there will be a big shake-out.”    

 

Good added he believes fully in the sustainability of the subscription-based model:  “Anything that is premium content has to be a subscription model, otherwise you are just scouring YouTube for the rest of your life.”

 

Pandora thrives on its personalized music recommendation features. However, Good asserted that “curation and emotional involvement” are essential to attracting listeners. The Daisy service has Trent Reznor as head creative and intends to focus on more human curation from major music industry players than some other companies in the marketplace:  “It is all about curation. That is why radio exists. That is where the value is, that is where the market is.”

 

Apple – the king of music downloading – is, of course, currently working on a streaming music offering. But Good said he believes the field will continue to be diverse:  “There have not been too many media that have disappeared. But it will be interesting to see how it shakes out.”

 

Unpaid Interns Might Prevent Industry Progress

 

Recent lawsuits accusing record labels like Warner Music, Atlantic Records, Sony and Columbia as well as film studios including Fox Searchlight in the U.S. of mistreating unpaid interns has thrust the practice of using interns into the spotlight. And an article in The Guardian asserted that perhaps “employing” unpaid interns is not the best practice for those that hope to improve the state of the music industry.  

 

The most recent lawsuit involved Britt’ni Fields, who said her workday involved answering phones, sending mail, making copies and other activities that “did not provide academic or vocational training.” She claimed the label “would have hired additional employees or required staff to work additional hours” if there had not been unpaid interns willing to perform these tasks.

 

The Guardian’s Helienne Lindvall wondered whether this intern revolt might spread to the UK, and how many British labels are using the same tactics. When asked, Warner Music UK insisted all its interns are paid, and Sony UK confirmed, “We provide several different types of work experience, including long-term paid internships.”

 

A source from Beggars Group insisted that interns get definite benefits from working with the label group:  “Such roles in and for a company like us are a fantastic foot on the career ladder, and a great way to learn – most of our entry level positions these days are filled by ex-interns.”

 

However, Lindvall pointed out that unpaid internships not only put “financial strain” on the interns, but also exclude those people that might have great talent for jobs in the music industry, but are unable to work unpaid for six months, to one year. Selina Webb of Universal Music UK said this is exactly why the label started a paid internship program in 2009:  “Before then we offered unpaid work experience, but we weren’t particularly comfortable with it. Longer periods of work experience were really only an option for people whose parents could afford to support them – of course that narrowed the talent pool considerably. Now we have applications, and interns, from a wide range of backgrounds.”

 

Universal Music UK hires 25 new interns per year and was recently singled out by the House of Commons for being a “fantastic leader in the field [of paid internships].” Internships are available in everything from A&R, marketing, promotions and digital, to legal, financial and sales departments and go on for 12 months.

 

Webb added, “There’s a really good conversion rate of interns becoming permanent employees – there are around 60 full-time employees in the business who started via the intern scheme.” She also said that even when these interns do not get jobs with Universal Music, they typically go on to find other positions in music.

 

The ruling against Fox searchlight – ruling that the production company violated overtime and minimum wage laws – could make breaking into the entertainment industry harder for people in the future. U.S. internship guidelines were deemed to be that all “chores” conducted by an intern would have to be “educational”; if a company gets any direct benefit from interns’ work, those interns should be paid. And many U.S. companies have begun considering eliminating their internship programs to avoid potentially expensive lawsuits.

 

On the other hand, UK law is less strict than the law in the U.S. and states that interns are only given the national minimum wage if they are considered workers. This involves a contract and other requirements that do not fit into the description of most internships.

 

Still British record labels could see benefits from paying interns. Lindvall explained, “The industry has long been criticized for being largely run by white, middle-class men. A workforce made up of people from a broader range of backgrounds would surely make it understand, cater to, and communicate better with its customers.”

 

Best Places to Live and Work in the Music Industry

 

The Billboard print edition published a piece on the best places in the U.S. to live for those that want to work in the modern music industry. And some of the locations are surprising. For example, while big cities like New York and Los Angeles have many music industry jobs available, those in Nashville will more likely have a neighbor also working in the business.

 

Because of the DIY mindset of the current industry, workers can perform their jobs from almost anywhere. However, economist Richard Florida found that studies from 2009 indicated music industry jobs have still trended towards being more available in a small number of cities.

 

From 1970 – 2006, Florida said that Nashville was the only city that experienced growth in music industry jobs:  “In effect, it sucked up all the growth in the music industry.” And Nashville’s 27,000 music industry jobs drive its economy. The jobs earn employees almost $1.7 billion combined and add $5.5 billion to the local economy. And one job can help support additional jobs, thanks to the multiplier effect. The local music industry in Nashville offers 57,000 jobs and provides $9.7 billion to the economy.   

 

And the City of Nashville recently took notice of the music industry’s impact with a report conducted by the Nashville Area Chamber of Commerce and the Music City Music Council, a collection of professionals put together by Mayor Karl Dean.  

 

When it comes to concentration of music industry jobs, Nashville is #1 in the U.S. EMSI data in the report said it provides 7.8 johbs per 1,000 residents. Los Angeles is far behind in the #21 spot with 2.8. Austin ranks third with 2.6, and New York has 2.0, which is beneath the 2.1 offered by Charlotte, NC.

 

And the cities that have the three-highest concentrations of music industry jobs also have jobs that pay the best. Los Angeles wins for average music job earnings:  175 percent of the country’s average salary. Nashville comes in second at 156 percent, and New York is third with 147 percent. However, music-related jobs pay less than the national average in Charlotte, Austin, Atlanta, Memphis and New Orleans.

 

 

Mid-Year Music Industry Report, Social Media and Digital Music News, July 28, 2013

Posted By Julia Rogers on July 28th, 2013

Billboard and Nielsen released the 2013 mid-year music industry report. And Erykah Badu discussed the value of artist collaboration and how social media is transforming the music industry. Also, Aimee Mann filed a multi-million-dollar lawsuit regarding improper licensing of her music and suggested that online streaming services need to put their faith in more responsible companies when licensing musicians’ work.

 

 

The 2013 Mid-Year Music Industry Report Released by Billboard, Nielsen Entertainment

 

Nielsen SoundScan/Nielsen BDS and Billboard released the sales figures in the U.S. for the first half of 2013 last week. The Nielsen Entertainment & Billboard’s 2013 Mid-Year Music Industry Report analyzed activity in the music business for the period of December 31, 2012 – June 30, 2013.  

 

Overall sales of albums and singles were 4.6 percent lower than in the first six months of 2012. Digital sales for full albums rose 6.3 percent while sales of digital singles/tracks declined 2.3 percent. And CD sales were down 14.2 percent as vinyl/LP sales climbed 33.5 percent.     

 

Despite the fact that the report showed some overall market decline, senior vice president of Nielsen David Bakula was optimistic about the numbers:  “Overall sales are down slightly in the first half of 2013, but there continues to be encouraging growth in digital album sales … Digital albums now comprise 43 percent of all album sales, up from 38 percent at this time last year. Also, while a small percentage of the overall album sales, Vinyl LPs continue to be an amazing growth story with sales up over 33 percent over last year’s record-setting pace.”

 

And Bakula noted that streaming services continue to make a huge impact:  “Streaming continues to be a tremendous growth story with over 50 billion audio and video streams in the first six months of 2013 … Not only are we seeing massive volume of streams, but we continue to see growth on a comparable provider basis, with stream volume up 24 percent over the same period last year.”

 

Erykah Badu, on Collaboration and the Social Media Revolution

 

Erykah Badu recently talked to Dallas’ Pegasus News about how platforms like Twitter and Facebook have contributed to branding and helped forge personal connections between artists and fans. Known throughout the industry for her collaborative spirit and social media prowess, Badu performed as part of Red Bull’s Sound Select concert series alongside The Cannabinoids, Larry g(EE) and Dustin Cavazos in Dallas. Instead of putting tickets up for sale, she offered 1,200 free tickets to the “most enthusiastic” social media marketers.

 

Badu stated that inviting the most passionate fans to shows helps generate excitement and create a memorable experience for concert goers:  “Choosing fans who are active will make for a totally different kind of room … It’s a different kind of energy. They were selected – it’s different, it’s special.”

 

She added that social media is completely transforming the music business and having a particularly profound effect on the hip hop genre. She said that social media is putting the power into the hands of fans, who get to decide which musicians deserve the most attention and “make sure they are loved and seen and noticed.” Badu pointed out that R&B performers such as Drake and Janelle Monáe rose to popularity thanks to their fans rather than record labels.

 

Badu has a following of 900,000 fans on Twitter and is known for her ability to engage her fans through daily interactive questions and retweets. She also has earned a large following on the relatively new home video app Vine. She credits her success on these platforms to “human nature” rather than straight marketing:  “It is platforms like Twitter and Facebook – and concerts like [the one in Dallas] – that engage creativity and friendship.”

 

She further explained, “We learn from each other. We debate about social issues, politics, religion, race, art, sex, love … I guess we’re just being basic human beings dialoguing.”

 

Badu has also become renowned for her frequent collaborations with other artists, which have helped her grow her fan base significantly. In June, she performed as artist-in-residence with the Brooklyn Philharmonic, which expanded her reach to the classical market. And British producer Bonobo as well as Janelle Monáe featured her on tracks released in 2013. Still, Badu revealed, “It has to be something really special for me to [collaborate].”

 

She also said that concerts like the one in Dallas offering a special experience for fans are critical to growing an artist’s career:  “[Audience members] all have something in common. It was by fate, by timing that they were chosen … It makes everyone feel connected as a family, ‘cause that’s what we are when we’re up there. We eventually become one living, beating organism during the show.”

 

Aimee Mann Filing Groundbreaking Digital Music Lawsuit

 

Grammy-nominated singer/songwriter Aimee Mann filed a major lawsuit against music licensing company MediaNet for improper licensing of her work through digital music services on July 22. And her complaint reveals that many online streaming services could be putting their trust in the wrong companies to license her work and the work of other artists, according to The Hollywood Reporter.

 

Thom Yorke, Nigel Godrich, Pink Floyd, and other renowned artists have, in the past few months expressed their frustration with online radio services for low royalties, in many cases pulling their catalogues from Spotify and other streaming platforms. However, Mann has decided to attack what she believes is the source of the problem.  Mann is tracing the system to its source, reported The Atlantic Wire. MediaNet (formerly MusicNet) was launched in 2001 by AOL, EMI, BMG and has been owned by a venture capital firm since 2005. The company offers more than 22 million songs to companies like MTV, Songza, Yahoo Music, eBay and over 40 others. It does not provide music to streaming giants Pandora and Spotify.

 

Mann’s relationship with MediaNet began in 2003 when she signed a three-year licensing agreement. It had an automatic two-year extension option unless either she or MediaNet decided to terminate, which she claims she exercised.

 

In her argument, Mann claimed she has been robbed of digital royalties by MediaNet. Her lawyer, Maryann Marzano explained, “Not only does this case seek redress for Aimee Mann against one of the world’s largest but least known providers of online music, it also serves as a call to other artists to follow the lead set by Radiohead and Pink Floyd to put an end to the unlicensed, uncompensated use of their music by online services.”

 

The lawsuit alleges that not all MediaNet’s music has been properly licensed. Mann is asking for damages for copyright infringement of around 120 songs, which could add up to $18 million in damages.

 

Music copyright laws have always been complicated, but the Digital Age has made them even trickier than ever before. Congress amended U.S. copyright laws in the 1990s to extend licensing to digital recordings. But this amendment did not apply to on-demand streams and limited downloads – a fact decided by a judge in 2001.

 

Representatives from the Recording Industry of America (RIAA) and the National Music Publishers Association (NMPA) negotiated with each other and decided that RIAA members would make payments through the Harry Fox Agency. And then, the Copyright Royalty Board was created to help set rates and allow Pandora and other digital services to pay licensing fees, whereas ervices like Spotify make deals directly with labels.

 

Experts and analysts point out that MediaNet has become a “back-office aggregator” of music for many online music services. And Mann’s suit is not the company’s first brush with the law. The Harry Fox Agency filed a class action lawsuit in 2008 against the company, and another from a group of song publishers followed in 2011.

 

Stephen Grauberger, the attorney for former plaintiffs said the company tried to get compulsory licenses in the early 2000s. However, notices sent by the company were “facially defective” for a handful of reasons, such as an inability to name the companies and services that would use the music. Grauberger also stated that in 2012, 23 percent of MediaNet’s catalog was still unlicensed. The lawsuit was eventually settled privately.

 

Mann’s complaint, filed in California federal court claims that she sent a termination notice in 2005, but that “MediaNet continued after the Termination Date to transmit, perform, reproduce and distribute the Compositions as part of MediaNet’s service, despite having no right or license to do so.”

 

Mann’s complaint also claims that MediaNet willfully persuaded business partners to infringe on copyrights. She said she has not received royalties since September 30, 2005, aside from a $20 advance in March, 2013 that she returned to the company.

 

MediaNet’s CEO Frank Johnson responded to the lawsuit:  “This claim on behalf of Aimee Mann is without merit … MediaNet has had a license for her music since December 2003. We have been paying royalties regularly to her agents on her behalf.  MediaNet is a supporter of artist rights and copyright and has been since we launched in 2001.”

 

He added that he expects the issue to be resolved to the satisfaction of both parties.

Music Business News, January 21, 2012

Posted By Rick Goetz on January 21st, 2012

This past week in music, industry analysts highlighted trends that have emerged during the Digital Age as experts claimed January is the best month for artists at all levels to release an album, and a study of the Billboard chart system showed that artists who show up on these charts only spend about five years there. Also, the file-sharing giant MegaUpload was finally shut down by the U.S. Department of Justice and labeled a “mega conspiracy.”

 

 

Want to Make it Big? Release Something in January

 

January has long been labeled a “dead month” in the music industry. But a study of artist releases – both major label and independent – conducted by the Independent showed it could actually be the perfect time for particularly emerging or lesser-known bands to sell more albums and register on the charts. And scoring a #1 hit is a good move for any band, as it increases sales, radio airplay and can garner better spots at live music festivals.

 

Since 2006, January releases have catapulted quite a few independent bands and artists to #1 on the charts, including The Arctic Monkeys in 2006 (Whatever People Say I Am, That’s What I’m Not) and The View in 2007 (Hats off to the Buskers). And Adele’s #1 success in January, 2008, 19 inspired her to release her album 21 in January 2011, an album which sold 200,000 copies in its first week and made her the best-selling artist of last year.

 

What is the advantage for artists of a January release? The biggest benefit is that sales of just 30,000 albums can earn them a #1 spot, whereas in other months, that sales figure would have to be about three-times that much.

 

This year, new artist Lana Del Rey is hoping to replicate Adele’s formula for success by releasing her debut album at the end of this month. However, in competition with her will be Adele herself as well as more established artists Bruno Mars and London indie band The Maccabees, all releasing their third albums the same week.

 

Experts say the real reason January can be such a prime month for new artists in particular to get noticed is because it is during this time of year that the media and music fans are hungriest for something new. According to John Hirst from HMV, there has typically been six weeks of silence after Christmas and “…When no one’s released a record for two months the public’s appetite is for something new. It’s easier to get media attention and positive reviews so an album can over-perform.”

 

How Long is the Career of a Billboard Artist?

 

Artists who make Billboard charts are there for only about five years on average, according to a study  spend on average only about five years  A recently-released professional study conducted by Storm Gloor, MBA at the University of Denver’s College of Arts and Media (CAM) and published in the 2011 Music and Entertainment Industry Educators Association (MEIEA) Journal. And according to Gloor, more than one-third who make the charts will be “one-hit wonders.”

 

This study is based on analysis of Billboard charts and other pop music data and is phase one of a research project designed to figure out how artists’ popularity and the length of their careers have been impacted by the huge music industry shift brought on by the digital revolution and other major events of the past 15 years. This first part of the study analyzed over 50 years of Billboard music charts.

 

The official results were that artists stay on Billboard charts in some capacity from 3.95-6.16 years and that 34-percent of those whose debut albums – of any genre –hit the charts only appear there once. However, with pop artists, that figure is 50 percent.

 

Gloor said the results of this study will be particularly important to aspiring artists who want to plot out real, long-lasting careers in music:  “The research is important to aspiring artists in understanding their own long-term planning in light of such realities. They need to know what they are facing as they start planning for their careers and beyond.” He also said this information could help labels, as they will be able to use it to create more effective promotional strategies for their artists going forward.

 

The second part of Gloor’s study will involve an examination of music business trends and how they affect the popularity of artists who make the charts. According to Gloor, his initial findings have been that artists who chart might gain national popularity faster, but will not likely stay in the spotlight for long.

 

MegaUpload Shut Down by Feds

 

One of the world’s most formidable file-sharing websites MegaUpload finally bit the dust on Thursday as it was shut down by the U.S. Department of Justice for violation of piracy and copyright laws. The feds issued an indictment declaring that MegaUpload was a “mega conspiracy” and labeled it a global criminal organization stating its members “engaged in criminal copyright infringement and money laundering on a massive scale.”

 

The indictment also charges MegaUpload executives with earning $175 million through subscription fees and advertisements and taking $500 million in royalties from movie producers, authors, musicians and other copyright holders.

 

According to an article in The Washington Post, prosecutors stated that the company attempted to hide the fact that they were paying users to upload illegal movies and music and used the financial windfall this practice created for a “lavish lifestyle.” Federal agents confiscated dozens of luxury autos, including site founder Kim Schmitz’s, aka “Kim Dotcom”’s Rolls-Royce, which sported the license plate “GOD.”

 

Of course, MegaUpload is just one of a number of services that provide file sharing online. Sites such as Mediafire and Rapidshare and also cloud storage services like Box.net and Dropbox also offer easy ways to share content. This shutdown and the potentially impending SOPA and PIPA bills – which brought about internet-wide protests by Craigslist, Wikipedia and Google last week – has many running legitimate services concerned about their future and whether or not the government has the right, even in the absence of a passed bill, to shut sites down for hosting pirated content without allowing the companies to defend themselves in court first. As Eric Goldman, a professor of intellectual property law at Santa Clara University said, “They will wonder if they have done anything different from MegaUpload, and does that mean the Feds will come through their door?”

 

One detail that made MegaUpload different was that it managed to get celebrities on board to support it with its online marketing campaign featuring Kanye West, Lil’ Jon, Sean “Diddy” Combs as well as Russell Simmons and director Brett Ratner, who all professed their love for the site in a series of promotional videos.

 

The indictment against MegaUpload was unsealed Thursday, but was issued by a federal court in Virginia on January 5. The Justice Department released a statement with the indictment:  “This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime.”

 

Authorities were dispatched last week to arrest three MegaUpload executives employed by its two companies Megaupload Ltd. and Vestor Ltd. in New Zealand, including the site’s founder, Schmitz. The indictment also charged the two companies with running a “racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.”

 

In retaliation for the shutdown on Thursday, a hacker group named “Anonymous,” linked to the Twitter accounts @YourAnonNews and @AnonOps took down the websites for the Department of Justice and Universal Music as well as for the Recording Industry of America and the Motion Picture Association of America.

 

The Justice Department also seized 18 additional domain names linked to the case.