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.
Last week, the RIAA released the final official music sales numbers for 2011, highlighting the continued strength of CDs in the marketplace as well as revenue growth sparked by streaming services. Also, the California attorney general announced she will investigate the soundness of the pending EMI sale. And early digital innovator Thomas Dolby talked about why technology has created amazing opportunities for artists but has also put up road blocks for those trying to get their music heard.
Digital Music Dominated in 2011
The Recording Industry of America (RIAA) presented the final sales figures for 2011 on March 27, and the results showed what had been suspected since tentative numbers were released in December and January: U.S. music sales grew by .2% (reaching $7 billion) from 2010, with digital revenue increasing 9.2% and physical sales dropping but still proving that CDs were still the format of choice industry wide for music fans.
Digital music represented over 50% of sales in 2011, though CDs sold over 240 million units and raked in $3.1 billion, according to a report in the San Francisco Chronicle. Even vinyl’s presence grew significantly, selling $100 million in records, 30% more than in 2010.
Additionally, the positive impact of music streaming services like Spotify and Rhapsody shone through in the RIAA’s findings. An article in VentureBeat highlighted that these two services along with Rdio and others brought in 13.5 percent more revenue than in the previous year, with paying members increased 18 percent.
2011 was certainly the year marked by artist and record label complaints that Spotify and subscription services were actually hurting rather than helping growth, as they speculated that people that used these services were less likely to feel compelled to purchase songs they could just listen to on demand. And many staged a protest of Spotify in November when over 200 indie labels took their songs away from streaming platforms.
However, the RIAA declared that its recently-released stats prove that streaming music could definitely be providing a boost: “Access models like subscription services and Internet radio (represented by digital performance royalties) have continued to grow both in popularity as well as in their revenue contribution to the industry.” The organization added that digital music is not just a niche anymore, rather a set of viable business models that the music industry needs to continue to utilize in the future.
How Will the EMI Sale Impact the Music Landscape?
California attorney general Kamala Harris revealed to two unnamed sources this past week that she would be launching an official investigation of the split of the 114-year-old EMI Group between Universal Music and Sony/ATV Music Publishing, said a report published by BloombergBusinessweek. Universal – the world’s largest record label – is attempting to buy EMI’s recorded music arm for $1.9 billion, whereas Sony/ATV hopes to buy the publishing side for $2.2 billion, which would turn it into the biggest music publisher. The probe will analyze the potential impact the sale could have on the music industry and ensure it will not violate any antitrust laws.
Members of Harris’s office have already contacted customers as well as competitors of EMI, Universal and Sony/ATV about how the $4.1-billion deal might influence future pricing. And the state began to compile information late last month about the sale and its compliance (or lack of compliance) with antitrust rules.
This sale is already under the U.S. Federal Trade Commission and European Union (EU)’s microscope. Many top executives of other labels as well as other industry experts have expressed their opposition to the EMI sale since it was announced last year, most notably Warner Music Group and CEO, turned board member Edgar Bronfman, Jr.
Universal Music would get the rights to legendary EMI arists like the Beatles whereas Sony/ATV would get the copyrights to songs and mega songwriters including Beyonce and Jay-Z. Sony/ATV has already presented a series of compromises to EU regulators, and the European Commission has pushed its deadline for final rulings on the publishing side to April 19. Its review of Universal Music’s purchase has also been extended. The concern among critics and reviewers of the EMI sale is that, when split and merged, the two resulting companies will have a hold on too many songs and too much control over music prices.
Universal has also announced its plot to raise money to help fund the EMI acquisition, according to an unnamed inside source. The company will sell three music publishing catalogs in order to raise $200 million – classical, Christian and German schlager. And Vivendi – the Universal parent company – is also raising $668 million.
Thomas Dolby, on Technology and the Music Industry
Cutting-edge technologist and musician Thomas Dolby revealed his long journey in digital music and shared his thoughts about how technology is shaping artists’ careers in a keynote address at the Design West engineering conference in San Jose, California last week. And according to the EE Times, the takeaway for engineers and tech innovators was, “Shit happens.”
Dolby – best known for the ‘80s song “She Blinded Me With Science” (which he performed as part of the speech) – stated that technology has presented some incredible opportunities for artists, but has also brought about many problems for those trying to get their music heard: “You used to have to spend millions just to get out in front of fans … When I started out at 17 … [you] had to get a cassette tape to an A&R man, then get the radio stations to play it, and all these other things had to fall in place.” But now “the music industry will be like day trading with a music manager behind a screen.” However, artists can build a very targeted fan base using social networking tools capable of finding “qualified listeners with a laser focus.”
In his speech, he explained that as one of the first electronic music artists in the 1980s, his path was difficult: “Electronic instruments were quite bulky, they didn’t stay in tune and they were quite expensive.” One of his first synthesizers was the “size of a refrigerator” and double the cost of his first home in London.
However, he pushed on, branched out and diversified, securing a one-year grant from Paul Allen’s Interval Research group in the early days of the Internet in order to research the possibilities of deeper integration between music and technology. The results of his exploration brought about the formation of Headspace, a company that created the Beatnik audio engine described by Dolby as “a SoundBlaster card in software.”
In 1994, Dolby began to work with Netscape founders Jim Clark and Marc Andreessen, whom he eventually persuaded to include audio in their browser, though they still put up resistance. Their questions about his methods pushed him to create new audio code through Headspace that eventually got the attention of Sun Microsystems, who began to use it in Java technology. And this led to a request from Nokia to use his code to introduce some of the first polyphonic ringtones for mobile devices: “By 2005, most phone makers licensed Beatnik and ringtones were a billion-dollar business” – one that was still music focused but did not require the support of big record companies.
Dolby then created Rich Media Format, which allowed song samples to be embedded into ringtones, which unfortunately led Dolby back to world of major labels, which he had hoped to escape when he initially started to explore musical concepts rooted in emerging technology: “We inadvertently brought the large recording companies into the game … They would sit down with the carriers and do deals that cut out all the cottage ringtone publishers. Within a few years the window for polyphonic ringtones ended because the wireless networks were good enough to handle the whole song.” So, in 2008, Dolby retired from technology and decided to begin his music career anew.
Dolby is currently on tour promoting his first album in 20 years, traveling with a trailer “that looks like it was designed by Jules Verne and H.G. Wells.” He has also designed a Web-based mystery game called “The Floating City,” which will become a place for 11,000 of his fans to put together clues and will be sold alongside his latest album. His trailer is also a portable studio that records 30-second video clips from fans that are added to the time capsule for The Floating City game.
Laurie Jakobsen is the founder and president of Jaybird Communications, a public relations and marketing communications firm that represents a variety of tech companies and innovative start-ups. Laurie has an MBA with marketing specialization from NYU’s Stern School of Business and a BA cum laude in English from Tufts University, along with over 15 years’ experience in public relations and marketing, ranging from artist representation to work with start-up dot-coms and major multi-national music companies. She got her start in the music industry as a fan and began writing about bands in the Arts column of her daily college paper at Tufts University. After interning at many different types of businesses within the music space, she developed a passion for public relations. As part of the boutique firm Shore Fire Media, she was part of the team that represented artists including Bruce Springsteen, Wynton Marsalis and the family of Jimi Hendrix. After working with N2K Encoded Music, the first Internet-focused record label helmed by legendary producer Phil Ramone, she went on to work at a variety of up-and-coming companies in the early days of the Digital Age. In 1999, she was recruited to handle all technology-related communications at Sony Music Entertainment, including the launch of one of the first subscription music services, pressplay. In 2003, Laurie joined The Harry Fox Agency (HFA) to build the company’s marketing and communications department so it would be better suited to the digital marketplace. She has spoken on panels at CMJ and the Miami Music Festival and guest lectured at universities throughout the New York City area on PR topics. Jaybird Communications’ clients include Indaba Music, 7digital, Bandsintown, the National Music Retailers Association (NARM), Tunesat and Cellfish Media. She also works with NY Tech Meetup, a not-for-profit organization supporting and promoting the area’s technology community.
Laurie took some time to talk to me about her experience in the music industry and some qualities both artists and tech entrepreneurs need to have in order to succeed. She also shared some advice for artists looking to improve the way they communicate about their brand, so they can better market themselves and their music and build solid careers.
Thanks so much for taking some time to talk to me, Laurie. How did you get into the music business, and what has the experience of watching all the changes that have taken place been like for you?
LJ:
I got my start like a lot of people do: I was a fan of music. I sometimes joke that if it wasn’t for Duran Duran, I wouldn’t be doing any of this at all. I went to college as an English major, and my school – Tufts University – had a daily newspaper. I noticed it had an Arts column, and it occurred to me that I could get CDs and go see shows and write about them, and even get to interview great musicians. So, that’s exactly what I did. My first taste of the music industry was at 18.
From there, I did a lot of internships to try out different aspects of the industry. First, I interned at Good Times in New York as a writer. I also interned at radio station WFNX in Boston, which connected me to the Musician’s Guide to Touring and Promotion, and I started getting exposed to the PR side of things. I liked the idea of advocating for artists that I liked. For me, the downside of being a writer was the objectivity. I wanted to keep promoting the bands that I really liked, and that seemed to be what these PR folks were doing. Eventually, I came back to New York and got my first job in the public relations field.
In the mid ‘90s, it became clear to me that the Internet offered a lot of opportunities for musicians, and I was ready for a change. There was an opening to start the PR department for a record label run by a company called N2K – which was a very early music distribution site, pre-Amazon, that sold CDs by mail order. That started me on my way on the digital and business side of the industry.
And that’s how I got my start, going from artist PR to the tech side of the business, which is pretty much what I’ve been doing since 1997, believe it or not.
It’s interesting because I’ve interviewed a bunch of publicists, and I don’t know that too many of them have the technical proficiency and writing proficiency. And what made me think of interviewing you was when we sat down, and you discussed that today’s artists – and you may have been referring to both musicians and tech entrepreneurs because now your clients are mostly media and tech companies – really need an education on how to have transactional conversations. Can you speak a little bit more about, in your experience with artists and entrepreneurs, what is lacking and what your service bolsters up that they need?
LJ:
A lot of people have drawn the analogy between musicians and tech startups. And I think it’s very apt, because you do have to have that entrepreneurial personality that I would say suspends disbelief when everyone is telling you, “You’re crazy. You won’t be successful. What are you thinking?” Musicians and startup founders go out there anyway and make it happen.
But when it comes to communications, most musicians have a leg up on their business counterparts. Many musicians have been rehearsing their Rolling Stone or MTV interviews with a hairbrush as much as they were singing along to their favorite tracks. But very few entrepreneurs grew up practicing their Time magazine “Person of the Year” interview. I think what people don’t always realize is that in business – to repeat what you said – communications are transactional. And that can sound a little cold. But whether you’re sitting down in a business development or strategy meeting, or doing an interview with a journalist, there’s a purpose to that conversation; there’s something in the end that will benefit both of you. And the words you choose, the way you present yourself, what you choose to show as a visual, even down to the way you dress and the setting of the meeting is all part of that transaction. As a communications person, when you’re counseling people about interviews, they’ll sometimes think the conversation is a toss-off: “I’m just talking. It’s not a big deal.” There is no such thing as “just talking” with a journalist – always be prepared to see what you say in print.
Whether you are a musician or a businessperson, whatever conversation you’re having, you do need to prepare for it. You need to think about “What is this person coming to the table with? What am I coming to the table with? Where do we meet? Do I have to move this person’s point of view towards mine? Do I have to move towards them?” In order to get the best result for both of you, that’s how you need to approach everything related to your business.
When you said “transactional conversation,” I started to think about a lot of the people who email me. And what’s evident is that they need help. But they don’t know what they need. They often will just say, “Can you get me to the next level?” And that’s something that burns in my soul every time I hear it, because it indicates the person hasn’t thought through what they actually need. And one thing my job isn’t is to figure that out for them. So, in your experience, what do you often wind up guiding musicians and entrepreneurs away from when it comes to their introductory emails?
LJ:
When it comes to plain email communications – and I do general communications coaching too, beyond PR, which is why my company is called Jaybird Communications and not Jaybird PR – it starts at the beginning, with the subject line. First off, have one. The number of people that send emails without subject lines boggles my mind. That subject line should sum up the action item for the person you’re sending it to. That’s how people prioritize their in-box. It may sound funny, but I think the subject line is often overlooked.
Then, when it comes to actually constructing an email communication, it’s not that much different from constructing a press release or other piece of marketing material. It’s your classic “pyramid” construct that everyone probably learned in English and promptly forgot: Be cordial, but state what you’re looking for upfront and include all the supporting information after.
This is the classic style of a newspaper story, which is why I counsel people to read their favorite section of The New York Times every day to get the hang of that format. This structure is not intuitive to everybody, particularly people that come from a more conversational background. They will literally flip the pyramid: you’ll have three paragraphs of background information explaining the situation, and then it concludes with the most important point or action item. That is not the most efficient way to have any sort of business communication.
For some people, they have to learn a new communication style for business communications, and that can be tricky. But as you were saying about those who write you and say, “Get me to the next level,” people need to put a little bit of thought into what they’re asking. Sometimes it’s as easy as, “I’m not quite sure what the next step is. Can I meet with you to brainstorm?” And that’s a more specific question than, “How can you get me to the next level.” I think there’s a subtle difference there.
Absolutely. It’s a very specific request. While I don’t deal with as many entrepreneurs as you do, after I read emails from both artists and entrepreneurs, I understand they have a need, but I don’t understand what they want me to do about it. I realize they are in peril, but I don’t know at what point that became my problem.
LJ:
Exactly. I do short classes on communications, and the one thing that tends to blow people’s minds is that the first rule of communications is “Who is your audience?” That question really dictates everything else. Most people, when they think of communications, would think of it in the first person, as in, this is what I have to say. But communications is actually all about the “you” – the audience. While your message is important, if you can’t figure out how to translate that message to help the “you” – the other side of the conversation – take action, it’s an ineffective communication.
I think if someone is failing to get the response they want from their emails or other communications, they have to go back and ask themselves, “What am I doing that’s not making this email, press release, website, etc., effective?” If you find yourself saying, “My audience just doesn’t get it,” then you need to modify your message for your audience; your audience doesn’t have the incentive to move to meet you.
I think that’s a lesson that can be hard for people, especially innovators, that have sensibilities either musically or business-wise that are ahead of the curve. They have to be aware that there is a giant mass of people in the United States and around the world that have to catch up with you. And even somebody as progressive as Lady Gaga is very aware of her audience and not getting too far ahead of them. You need to look at people like that for the lessons they can teach you as communicators, whether or not you like their art.
Interesting. I wasn’t thinking of communication necessarily beyond words, but you’re talking about communication with imaging and all sorts of other things. What does it look like for you when you’re trying to position your clients without the spoken word? Obviously, you have relationships. But what other forms of context+ are important when you’re presenting something with online marketing materials, etc.?
LJ:
It’s funny to say, but really everything. I think that’s what has changed so much in the past 10-15 years. When I started in this industry, email essentially didn’t exist. You faxed press releases and mailed materials. Some people subscribed to wire services, but the way people interacted with your news was very specific. Now, you have to think about video, pictures, what the website looks like, your blog, you name it. There are so many other avenues of communication, which is great. But you do need to now be hyper-aware of what you are doing with things like Twitter, Facebook, Google+ and whether you host your own website in addition to your social media pages. Everyone needs to be much more aware of media, in all its forms.
The most important part is that you really have to look at communications holistically. What you say on your website can’t be radically different from the way you present yourself on your Twitter page or when you sit down for a meeting in person. Because, in this day and age, the first thing anyone is going to do to get ready to meet with you is search and see what they can find out about you on the Internet, Twitter, LinkedIn and Facebook. So you need to know what’s out there and be prepared to address that.
Some of it, too, is that you have to decide the things you’re really good at. I was working with somebody at one point who couldn’t wrap her head around using Twitter, but loved to post video on Facebook. You might think, “Gee, Twitter is easier.” But for some reason, for her, it wasn’t. So, that’s the way she chose to develop her communications. Social media can take a lot of time, so you have to look at what your strengths are.
Also, you have to know what your audience responds to. Particularly if you’re getting into something that is very mass market, people are still going to want to call you up and talk on the phone. You still have to have that 1-800 line. If your customer service is only through Twitter, for example, it’s not going to do it for a mass market audience. But it’s perfectly appropriate for a social media app. As I said, communication always goes back to who your audience is and what they respond to best. And then you put that together with what you’re good at and either decide, “I need to get better at A, B and C,” or, “Even though I like doing a couple of these things, I really don’t need to invest as much time and money on that, because it doesn’t mesh with my audience.”
If you’re a musician, I think Twitter and Facebook both present an opportunity to really sit down and talk to your fans about who you are vs. just promoting your product. To go back to Lady Gaga, she’s been a master at this. Her fans feel intimately connected to her because of what she does on social media. And that’s absolutely fantastic. It’s not for every artist, but it’s an example of what you can do.
I know you’re working with companies like Indaba, 7digital – a music distribution company – and also Bandsintown – a company that works with Facebook to support artists’ live dates. And you’re working with Cellfish Media, who owns Bandsintown and produces a lot of app content, including things for the NFL, NBA and NHL. And of course, you work with NARM and their digitalmusic.org arm. As somebody who is very much on the cusp of helping media technologies develop, do you have any insight about specific areas of growth that both musicians and entrepreneurs should be aware of?
LJ:
I think we’ve all been waiting for mobile to happen in the United States, but it hasn’t quite hit yet. And I think the move to HTML5 is going to be a real watershed moment once it hits critical mass, because right now we live in this split iOS/Android world. How those various markets operate creates lots of difficulties for people that want to be on mobile because it’s such an investment to support multiple platforms.
I think the reality is, as smartphones are adopted more and more, people are just going to go straight to the Internet to get everything they need on their phones. So, I think while apps are very hot, and I’m sure they will stay that way, as Internet connectivity on phones gets better, the need for a specific app becomes less critical.
At the same time, people have been saying the ringtone market is over. But that’s just not true. Cellfish happens to distribute what was the #1 ringtone on iOS in January, which was the “Mom, Mom, Mom” Stewie quote from Family Guy. So, there’s still an incredible market for ringtones.
There’s also still a lot of room for development on platforms like Facebook. You can look at something like what Bandsintown does: Making it easier for artists to promote their shows and get their fans to communicate about them, which ultimately gets more people out to the gigs. There’s still so much that can be done on all these platforms. So, I think there’s a lot to be expanded upon in the media realms that we already know. But we have to be careful not to get too ahead of ourselves by saying, “What’s the next thing? What’s the newest thing?”
This is particularly true if you’re a musician. If you’re Trent Reznor, you obviously want to be on the next and the newest thing. But if you’re somebody that wants to appeal to a big audience – going back to what I keep hammering home about “audience, audience, audience” – you might not want to be so far ahead of them. For example, speaking in a gross generalization, let’s say you’re a classic country artist. It’s not that this audience doesn’t use cell phones, but they may not be using them to text as much or post to Twitter. As I said before, you want to be where they are, not way, way ahead of them. That doesn’t sync well with that audience.
In terms of specific trends, I would definitely say to look out for HTML5, which will help developers go beyond the siloed app experience of, “This is what you can do on your iPhone. And this is what you can do on your Android device, your BlackBerry, or whatever else.” And I’m always fascinated by what I see at NY Tech Meetup because it’s the cutting-edge businesses that come to their events. They’re often barely a company, just one or two people with an idea, and they’ll demo something that’s very early stage.
I love to see how people put their ideas together. I don’t represent this company, but my mind was blown by Shapeways, who did an NYTM demo late last year, because they took something that is on the market – 3D design and printing – and made it accessible to everybody. I gave gift certificates to my artist friends for the holidays so they could render their designs in ceramic, metal or plastic for the first time, no sculpting required. I’m always intrigued by companies that make it easy for people to realize their creative ideas.
Laurie has moved away from representing artists and now mostly works with innovative tech companies and start-ups within the music space. To learn more about Laurie Jakobsen and her company, visit the Jaybird Communications website. You can also follow her on Twitter.
Matt Urmy is the CEO and co-Founder – along with Jonathan Sexton – of Artist Growth, a mobile software platform that helps artists manage the many intricate pieces of their music careers. Matt got his start in the music industry as a songwriter, a touring musician and recording artist, both with his bands and solo. Raised in Nashville, Tennessee, he is also a published writer with an MFA in poetry and has recorded three albums. Artist Growth is a platform that provides amateur musicians and pros a suite of tools to track daily tasks, coordinate projects and grow their music careers strategically. Through the software, users can manage finances, gig calendars, inventory, industry contacts, social media, performing rights organizations and get mentoring resources from top experts in the music business through the company’s AGtv channels. In addition to launching Artist Growth, Matt also teaches creative writing at Nashville State Community College, is developing his first Broadway musical and is working on an album with Cowboy Jack Clement.
I recently talked to Matt about the challenges he has encountered throughout his own career as a performing musician and how the Artist Growth platform directly addresses these challenges and can help artists interested in building sustainable careers within the music industry.
How did you find your way to the music business?
MU:
I came to the music business much like a lot of other people in it. When I was a kid, I started writing songs, and I wanted to be in a band. So, I started a band. And that turned into a high school band, then a college band. And then being out of college, I went solo and spent about a decade driving up and down the Eastern Seaboard playing gigs in bars and clubs.
Which bands were you in?
MU:
I was in two. I was in one called Telescope and then another band called The Whiskey Scars, which was a honky-tonk country band. It was by far the most successful band I was in. I was also in that band with Jonathan, the other founder of Artist Growth. He played bass. We founded it just as a way to pay the rent. We went and convinced this club owner in Knoxville and said, “Hey, if you pay our rent every month, we’ll put a band together and play here every Thursday night.” He went for it, so we got our rent paid for a couple years. We put this country band together, and it turned out to be this wildly successful, really fun honky-tonk band. The only problem with it – as you might imagine with a name like The Whiskey Scars – was that it was not a band that was in any way sustainable. You can’t live like that for very long before things start to go very wrong for you.
After a couple years, we packed it up. Both of us had children during that time, so Jonathan and I came off the road. We took a couple years off and stayed at home with our kids, worked day jobs and at about the same time came back to touring and hooked back up. So, we came back to our touring career really engaged in trying to move forward in the business. It wasn’t just about having fun and being on tour; it was about making money and understanding marketing. It was also the first time in my life I had ever worked with promoters and publishers who were actually professionals. I started learning all these things from them about how you’re supposed to do things and what the protocols are.
It was really one awakening after another. And having moved back to Nashville, I was meeting people who were veterans in the business. And all of that awakening and learning that happened coupled with the fact that Jonathan and I were completely dissatisfied with the online software tools available to independent musicians that we sat down and decided to design one ourselves. Once we did that, initially, we got such a positive response from people in the space here in Nashville that we kept going with it. And eventually, it turned into a product we were able to raise a million dollars to develop, implement and market.
As touring artists, we decided to build something for ourselves, and then we realized we had something everyone could use. So, now we’re not touring anymore once again and are instead going to be traveling around promoting this new product we built.
Obviously you had problems and experiences on the road that made you say, “I need to create something to fill this void.” And you built a product that solved these problems. Knowing what you know now, what would you have told yourself when you were just starting out playing music and touring that you’ve learned by building this solution?
MU:
The first thing I would’ve told myself is, “You need something that you can use to keep track of everything that’s easy to use and understandable.” That was my #1 problem. And each of the things I needed to keep track of was small, but they all added up to something big. For example, I needed to retain a list of every show I performed somewhere and have that accessible. And then, I needed to find a way to retain email addresses I collected at clubs. I also needed to have a way to put together a collection of every set list that I played at every club. They were all written down on pieces of paper, and I would lose them. Sometimes I would carry them around in my guitar case for a while and reuse them. But eventually, they’d get lost or I would spill a glass of wine on them. I would also lose receipts. I didn’t keep track of them, even though I had a glove box full of them. I also needed a list of how many records and how many t-shirts I sold at each show.
There was a lot of basic data keeping. And I didn’t have an understanding in my early 20s of how to use Microsoft Excel, FileMaker Pro or any of these file-keeping systems. They were tools that for me were really cumbersome and a pain in the ass to use. So, my solution was just not to keep track of anything. And it was so easy for me to justify it by saying, “That’s not what I do anyway. I’m just supposed to be an artist.” If I could talk to myself at 20 again and Artist Growth existed, I would say, “Yeah, you are an artist. And what you need is a tool that allows you to keep track of stuff and remain an artist and not have to learn how to use really fancy accounting software or a really fancy contact management system. You need a simple tool that’s easy to use and allows you to keep track of everything.”
What ends up happening is that after a certain amount of time, you do end up in a meeting with somebody who starts asking you questions: “How many records did you sell last quarter? How many did you sell in the last two years? How much merchandise are you moving? How big is your mailing list?”
How do you think things would’ve gone differently if you had these tools? Would The Whiskey Scars have gone somewhere else if you had access to that data?
MU:
I think we would’ve had the option to go somewhere different. There are always so many components that factor into whether or not a band is going to take the leap from being a concept that’s getting its feet wet on stage and in the studio to an actual act that’s invested in and becomes a business. That could be a lack of data or a lack of understanding, so you never get the meeting or the chance to meet with people who can take your career to the next level. But it could also be that your lifestyle isn’t sustainable or that you hate your drummer and it’s doomed from the beginning, or that you have a child.
It’s hard to say if The Whiskey Scars or any of my other bands, or even I as a solo artist in my mid 20s had been able to have access to Artist Growth, that I would’ve been the next John Prine. And of course, ultimately, you have to have the quality art to back it up.
I find it interesting, because you guys are collecting data I never even thought of. How would somebody use every set list they ever had?
MU:
What there is now is live performance royalty registration, which is a real revenue stream for somebody just starting out. You can get $200 or $500 every quarter in the mail from your performing rights organization (PRO) for performing. But you have to submit those set lists. And you have to submit those set lists with venue data. Artist Growth has over 30,000 venues in the system already. So, there’s the venue data. Now you just need a set list and a way to submit it. And that’s what we built.
We’ve tried to take all the ways there exist to have a revenue stream and have created a data tracking and data entry system that will be really easy for people to use. And we want it to actually turn into money for people or to help them leverage a meeting or get to the next meeting with people. Of course, the art has to be there.
It all goes back to the art. All the producers and managers we talk to say over and over again, “It’s all about the song.” And it is all about the song, the record and the art. If that’s there, the data just reinforces that. You can have all the data in the world. But if the music is terrible and makes people want to turn their radio off, and you can’t sing, then the data doesn’t matter. But if you really have something, and you really believe in what you do and are on a journey to discover your voice and get better, and if the feedback you’re getting is positive and it’s something you love to do and that you are passionate about, Artist Growth’s tools can help you. Artist Growth helps that kind of person start to put together the information that’s necessary to jump from the concept band or the concept artist who might have an independent record and has played locally, to somebody who is actually able to make music their career and have a team of people that are going to support that career. All that data matters now, because the landscape has changed.
You pretty much had me at “$200-$500 per quarter.” That’s pretty impressive. Explain to me how that works.
MU:
Live performance royalties are relatively new. But PROs collect these blanket licenses. They call it “licensing a venue.” They go out to all these venues – restaurants, bars, theaters, any establishment that plays music. They say, “You’re a business and you’re playing music in here, and entertaining your customers and guests is part of what brings in music and helps you make money. We represent the artists that make the music that helps you get business into your establishment. And since you’re using their art, which we represent, you need to pay us a fee to be able to do that.” So, the PROs collect all that money and distribute it out to the artists they represent.
BMI, for example, has over 400,000 artists that are affiliated with them. They collect money for all these licenses all year long from venues, big and small – restaurants, diners, coffee shops, as well as theaters, stadiums, etc. And now, with live performance royalties, what an artist that is affiliated with BMI does is send them the set lists they played at the venues that pay the licensing fees to BMI every year.
And you guys have taken this to the point where all an artist’s songs are registered with Artist Growth, and that process is fairly automated?
MU:
Yes. What you do with Artist Growth is upload your catalog. You put your registered work catalog into Artist Growth, and from that, you’re able to create set lists from the songs. You just drag and drop, make a set list and the system automatically connects it to a date, a gig and a venue. And we have the venue data built into our system. So at the end of the night when the show’s done and you’re doing your close out, you just hit “submit.” It’s kind of like sending an email. But we take all that information and you can send it off to your PRO. Once you register your set lists this way, every quarter, you get paid by the PRO for these performances. Part of the money the venue has paid the PRO is to cover the cost of the performance you did the night you performed there, so you’re entitled to some of that money. They send you a check in the mail. It’s not a ton of money. But a couple hundred bucks here and there really matters when you’re at the beginning of your career and trying to make it.
Part of the spirit behind the platform is also helping artists understand the business they’re in. That’s why we have AGtv and a mentoring portal. We have experts that the general public has never had access to before providing information on a wide variety of subjects, including legal issues, contract negotiation, songwriting, production, engineering, etc. Artists can go to these people whose expertise has previously been under lock and key within the business for decades and watch videos with information on their phones or tablets from some of the best minds in the business. These industry people talk to them about how to position themselves and get ready to really go for it. They tell musicians how to sidestep landmines, make a call to a radio station that doesn’t know who they are – and to navigate a lot of other challenges like that. This information really matters to artists in the beginning, because they don’t know the protocol. So, we provide career management and career mentoring.
I’m not even sure I would know how to call a radio station cold other than winging it, so that’s promising information.
MU:
Yes. And it’s not just information we put in there. You watch the channel and get one of the top radio promoters in the country telling you how to do it and how to follow up and when. And then the system will send you reminders saying, “Don’t forget to call that radio station back today,” so you don’t have to remember to do it yourself.
And people can check all this out on the Artist Growth website?
MU:
Yes. You can sign up for everything right there. And once you have your account, you go to the Apple App store or the Android Market – depending on which mobile device you have – download the apps, and you’re off to the races.
I don’t want to throw anybody under the bus, but there are a ton of artist services companies. The problem I think that’s most unanswered that you solve is the one attached to live performance royalty registration. Are there any other problems out there that your application solves that aren’t solved by the other sites out there – Nimbit, ReverbNation, etc.?
MU:
I think the main differentiator between our platform and those platforms is that those platforms mostly help with the distribution of content and the marketing and promotion of that content. I’ve personally used ReverbNation, and then I moved onto Nimbit. I’ve gone through several of these companies for my own personal career. And all reporting metrics that were available to me were based around the response to my marketing efforts. So, I had metrics for my email campaigns, metrics for my social media, metrics for the sales of the content that they digitally distributed for me. From a business and even a marketing standpoint, all this information was relevant. But what they didn’t have is a really integrated, streamlined system that allowed me to track my own personal data from my career on the road and details like royalties, licensing deals that I would do with a TV show, etc. They also didn’t offer me access to expertise that taught me how to get those opportunities, or once I had that opportunity, expertise that showed me how to leverage it into actual income. These services were just there to help me let people know I had a record or that I was going to go on tour and track the responses I got back.
And the information these other services provide is valuable and important. That’s why we don’t have digital distribution as part of Artist Growth or direct-to-fan marketing or widgets to put on your website. We don’t have website templates or an email client like ReverbNation has, because there’s already so much of it out there. What artists really need is to learn how to participate in the business side for their own career and then actually interact with the industry. They don’t need just another way to reach out to the fans. It’s very important to interact with fans, but artists also need to understand how to have a career in music and how to get in touch with people that can help them take that career to another level.
I think that’s solid advice whether you’re using Artist Growth or not. Obviously you’ve provided a solution to help carry all this advice out – keep tabs on things, make sure everything is orderly, be aware of your time expenditures and where your money is coming from, etc.
MU:
Yeah. And there are a lot of people out there that don’t even know what a performing rights organization is. I talked to some friends of mine back in Knoxville that were asking about Artist Growth, and I was talking about live performance royalty registration, and I was rattling off PROs like BMI, etc. They didn’t even know what those were. And they didn’t know it was free for them to go affiliate with them or that all they had to do was pay a $25 registration fee and they could start getting checks. That blew their minds. It’s easy for me to know about it because I grew up in Nashville, which is a Mecca for the music business. But when you’re living in a suburb of Decatur, Georgia, or out there in some of those places on the West Coast you don’t necessarily know what an organization like BMI can do for you.
And that’s part of what we really wanted to do with the Artist Growth tools. We wanted people to really understand what all the opportunities are, even when you’re at the level where you’re technically an unknown artist. There are still opportunities for you to grow a business, way beyond just Facebook and YouTube. Quantifying where your career is at is so important. It’s important to artists, but it’s also important to record companies, publishers and managers. If you have the right information, they don’t have to guess what 10,000 YouTube views means in terms of a revenue stream. They can look at your revenue stream for the past six months or two years and say, “Look at this growth. I can take this to another level.”
It’s about hard data. And that’s where we’re headed in the entertainment industry. The Internet and technology has taken us to a world and a paradigm where data are so readily available that there’s no reason to not include them in the process.
And how does it work for you guys on a business level? How do you make money as a business, and how much do you charge artists?
MU:
This was the biggest challenge for us when we were designing the platform, because for me, it was very important that this platform could scale. I wanted it go be valuable to a 12-year old sitting on his bed after doing homework with an iPad and his first acoustic guitar and trying to learn what it means to write a song. But I also wanted it to be valuable and useful for someone planning a large enterprise tour with multiple people on a team, multiple road teams out there working simultaneously. How do you build a software platform that scales all the way across the industry like that?
That’s how it got broken down into mentoring and management. A 12-year old doesn’t have much need for a financial and inventory and accounting management system, but he does have a need for mentoring and AGtv. What we’ve done is designed the system so that as your career grows, you can access bigger parts of the system. You can download the app from the Apple App Store for free. If you have an account with Artist Growth, you can just watch AGtv and just get the mentoring. And those channels can be 99 cents per month or $1.99 per month to subscribe to the library, where you can go in and access al the content.
If you want to buy into the whole system and subscribe to the entire thing and have the accounting, gig management and the smart scheduling management that has all the push-note integration, the search database, the AGtv, the quick sale and all that, it’s $4.99 per month flat for everyone. We wanted to keep it really cheap.
The way it scales from there is, depending on how big your team is, you can add other members to the account. You can do it in two ways. You can add members who are “read only” and don’t have access to all the financial and inventory data and contract details but can get set lists, schedules, tasks and to-do lists assigned to them and can report back with project details. Those accounts are 99 cents per member. Then, you can have an admin account added on. The way it works is that anyone else inside the system that has their own $4.99 account can be invited to be an admin of another account. So, if I was a manager and had ten bands, I would buy myself an account and all of them an account, then make myself an admin of all ten of them. Then I can manage all ten of them from a single place on my dashboard on my mobile device or computer. And then those bands can have those individual smaller members. You scale it out as much as you need. A whole management company could admin 600 artists from one account if they wanted to.
But if you’re a small band just starting out, you can pay $4.99 per month and have all members use the same login info to get in and out, as long as everyone is cool with everyone seeing all the information. Then as the business grows, and you’re hiring other people but don’t want them to have their finger in all your data, you can start adding on team members that have different permissions.
We didn’t want people spending money on features they didn’t need. So, if you don’t need accounting and inventory, you can just watch AGtv. As soon as you’re selling records and playing shows, get the $4.99 per month service and start giving people access so you can be a team. Then if you get signed to a management deal, add on an admin and let them have access. If you have to add on a road crew, you can add on some read-only members and distribute tasks for them.
Again, use it to help you manage only where you are, then as you grow, the account can grow. The hope is that it’s cheap enough that anybody can use it.
For more information about Matt Urmy and his new platform for artists, visit the Artist Growth website. You can also follow the company on Twitter and Facebook.
This week marked big news for the business side of the industry as Citigroup suggested it would break up EMI and Google Music eyed the MP3 store space. And Björk made music history by releasing the very first “app” album.
Will Citigroup Sell EMI in Pieces?
Artists and music industry professionals have been awaiting the fate of EMI Group Ltd., home of Katy Perry, Colplay, the Beastie Boys and many others. Citigroup has been deliberating over what to do with the company since they took it over in February. And after final bids came in last week, reports suggested the owner will sell it off as two separate businesses – a label and a publisher.
EMI’s Chief Executive Roger Faxon and former head of EMI publishing has been very opposed to cutting the business in two, saying that the publishing arm and the label arm have a symbiotic relationship, which is what has made the company work for so many years. Since he took over leadership, he has tried to integrate both divisions to make a split more difficult.
Two companies have submitted the highest bids on EMI Publishing: BMG Music, a company run by Bertelsmann and the private equity firm Kohlberg Kravis Roberts and Sony/ATV, a partnership between Sony Corp. and the estate of Michael Jackson.
As for the EMI’s recorded music business, Universal Music Group and Warner Music Group are both trying to seize it. Warner Music has also expressed interest in purchasing all of EMI; however, anti-trust issues on the publishing side and an inability to line up solid financing with the economy and the music industry in particular in flux will likely prevent that deal from closing.
EMI is considered to be one of the last attractive assets in the rapidly-changing music business. In June, the company was exploring alternatives to being sold, running an auction code named “Project Nile.”
Citigroup will also get more money out of EMI if they cut it in half – as much as $4 billion. Winning bidders will be selected by the end of next week.
Google Music Poised to Move into the MP3 Space
Google will likely open its first MP3 store, possibly as soon as in the next few weeks, says a report published in the New York Times. Five months ago, the company launched its first cloud music service – Music Beta, which allows users to back up songs on remote servers and stream them trough mobile and other devices – and is in negotiations with major labels to build a marketplace that will be an iTunes and Amazon competitor.
Music executives say that Google is pushing to open the store – which will be connected directly to the cloud service – as soon as possible. Google seems to be pushing up the launch date of the store in hopes of getting in ahead of Apple, who will open its own cloud music program, iTunes Match by the end of October. However, Google must establish partnerships with labels and publishers before it can have a full-service store.
Earlier attempts to begin a “smart locker service” – a storage system that lets people link their personal digital music collections to a large central database – failed when Google could not convince music companies it was installing anti-piracy features. Many labels and publishers have said they still are not convinced that Google has addressed their concerns regarding piracy, and Google’s ability to license their MP3 store is uncertain. If Google opens an unlicensed service, users will have to upload each song individually, which could take hours, or days depending on the size of the collection.
Björk’s Biophilia is Released as the First App Album
Björk released the first-ever “app” album last week, opening up new possibilities for artists that want to further integrate music with technology and add new dimensions to recorded music releases. Biophilia features a “set of ten apps contained within a mother app” and was made partly on an iPad. It is available as a CD and is being additionally released as a set of apps – one for each track – so listeners can enjoy a fully-interactive experience. The album represents work of Björk herself as well as work from a team of engineers, scientists, writers and artists/filmmakers, including Sir David Attenborough. App designer/filmmaker/media artist Scott Snibb headed the app design process.
Many believe this album could revolutionize how artists, industry professionals and fans have traditionally defined “music album.” The apps – depicted through images in Wired – are filled with links to reading materials and many interactive features. Interacting with the apps is incredibly comprehensive for those that take time to immerse themselves and even go beyond artistic to become educational. However, some critics worry that all these extra features detract from the main focus of any album – the music itself.
However, Biophilia, which explores music through the themes of science, paganism, nature, love and technology is clearly about the music; two entirely new instruments were even created for it. As the music industry experiences a continued decline in album sales and struggles with piracy, many artists have gone the DIY route. Björk’s latest endeavor could represent an interesting new direction for artists that want to get creative about recorded music and find new ways to embrace and leverage the growing technology side of the industry.
Steven Masur is an entertainment and technology lawyer by way of being a drummer in several rock bands and a lawyer in the cable and TV industries. He currently has his own firm called Masur Law based in New York and his clientele range from musicians to mobile companies to Media based technology firms. I wanted to speak with him because his world view as someone who works in both music and tech was bound to be interesting.
I know you wanted to pursue being a music lawyer, but it didn’t take immediately. What was the career path that got you to be a guy that was doing both music law and being the guy who represents media oriented tech companies.
SM:
After law school I worked at Sabin, Bermant and Gould, which is a firm that does a lot of work in the cable TV industry. I did corporate and cable TV type work at Sabin. When I left Sabin I thought I would start a music law practice; and I did have a music law practice the way almost every new lawyer does, where I picked up a few acts and tried to get deals for them. This is how it worked in the early 90’s. Ultimately this didn’t make as much as working with Internet companies, because in ’94, around the time of Mosaic, people who worked in a few of the sort of feeder companies that started Internet business – especially the Internet content business – started to form their own companies. It was a very heady time. They basically were going out and saying, “Well, we think we do some cool stuff with this media. We’re not sure what it is yet, but we want to start a company.” I was one of a very few lawyers in that milieu who knew how to do corporate formation work and early financing, and also the independent contractor agreement and all the company documents that were needed. So, I ended up picking up a bunch of those early companies, and that’s really what led me into that. I was very interested in the Internet, I was technologically savvy, and I ended up doing a lot of early stage company work for Internet companies in the early 90’s.
Tell me about how things started to shake out for you there. You were probably one of the few, again, established people, but all of a sudden you had a lot of deals under your belt. That must’ve been a really high time for you.
SM:
Yes, it was a really interesting time. 1995 was around the time when internet companies started getting funded. What was happening at the beginning was the healthy growth of an early-stage industry in which management teams were building real companies. They were thinking about, “How is this company going to make money, and how do we get to that point?” And then they started to look for venture finance, because they saw that as the best way to fund the companies because the most similar analogous company was a software company. So everyone looked at that the way software companies in Silicon Valley had formed. They said, “That looks like an Internet company, so those are the guys we’ll ask for money to do this business idea.”
What was fun about that era – the earlier era before it got ridiculous – was that we began doing the legal structures that allowed these businesses to exist. So we did digital distribution agreements for music, film distribution agreements, television deals, episodic online interactive show deals, advertising – the whole basis for advertising on the Internet. We worked on things like if you click a mouse, does that actually represent a signature, like a signed document, which we all know now it does, but at the time that was an unanswered question. So we did, from a legal perspective, answer a lot of unanswered questions.
That brings us to 1999 and 2000, when things really got ridiculous. For me it was summed up in one quote. At the time I was working with a client that was raising money, and they had a really good business plan that I had helped write. I had introduced them to a few people that might invest. They basically said to me, “The VC’s need this to be worth X amount.” And I said, “For it to be worth X amount, you have to make $100,000 a day for the next year, and you only have two people in your company.” And he said, “I don’t care. Just make it say that.” And that’s when I knew that we were in a terrible world of businesses that were unable to live up to their business model.
You’ve already seen the unwinding of one industry, and now the traditional music industry has started to unwind. As a guy who’s done content deals for mobile and content deals for all kinds of online streaming, and as a guy who has along the way developed a music practice – I realize you have other areas of interest as well – what do you think is next? What do you think artists should be looking for? You’re developing all these companies and doing legal work for companies, some of which are going to be the future. Where do you think artists should be focusing their attention?
SM:
It’s a really interesting question. I think we basically stalled after Napster. There was an opportunity to move to the new way of distributing music during the Napster era, and the labels and the content owners did not take that opportunity then. So we had a painful ten years during which a lot of money was left on the table, and now we’re doing it. So now distribution is moving to digital, and many would say it has moved to digital. The business model experimentation that should’ve happened ten years ago is now happening. And this year, 2010, will be a very big year for music services. There are a lot of mobile music services that are launching this year or that have already launched, that will compete for market dominance. In that environment, what an independent artist should do is to focus on writing the best songs they know how to write, doing their shows and then try to get themselves onto these music services. That’s my best advice for independent artists now.
Do you think that mobile and streaming companies still viable? You still saw a company like Nokia Comes with Music kind of underperformed given all expectations, and we have Spotify coming over from the UK. Do you really think that some of these companies will rise in 2010?
SM:
Well I forgot to say the most important thing, which is promote. You must promote your music. You must promote, or else nobody will want your music and nobody will want to distribute your music. Distributing music that is not promoted does not lead to money. Promotion is the most important thing. To answer the question about whether any of these mobile music services will fly, I believe they will. And the reason is, the technology is now there. It is now sufficient enough to distribute a music service, and the promotional money to launch these new music services is now there. It was a little nascent before. The marketing of the services was a little odd. For example, Nokia Comes with music, right out of the gate, just the name of the service indicates that the service is an ancillary side by-product of buying a mobile phone, whereas a music service that launches itself as a music service and says, “This is the business we’re in, if you like music, come here,” has a much better chance.
What about other products? Are you seeing any of these tech companies you’re working with developing possibilities for other streams of income for artists?
SM:
I don’t. I know that there are some old ideas which are gaining new life now. The business of licensing music to commercials and films and television is gaining new life through the use of some technology platforms and also because of the formation of some new sales ideas. I think the sales ideas are much more important than the technology. If there’s a way to assist the sales process great. But I think it is the sales process that is what allows the music to get sold. So, I have seen some new music licensing organizations start whose sole purpose is to try to sell music into television and commercials. I think that is starting to create more sales in that area. I wish I could say it is creating a Renaissance of sales, but I haven’t seen that. I have seen more and better sales and more creativity with regard to the music that is in movies and television shows.
Changing gears a little bit, are there common mistakes from your perspective that you think most artists don’t do that they should be doing?
SM:
I think I’m actually seeing most artists going back to basics, which I think is a really good thing for them to do. And back to basics is that they’re going back to the bedroom to write good songs, and then to test those songs out on a live audience and to not look at what they’re doing as a get-rich-quick scheme but as something but they can’t do anything else but to play music and to work on their skill and their art of making the best music they can make and then see how it plays against audiences. That’s really where the rubber hits the road. You can write the best song you think you’ve ever written, but the way the audience sees it could be completely different. The more you address your songs to a particular audience, the better likelihood you will have to develop better songs and songs that will play to the audience you are seeking. Once you have that, you have a good product; and selling a good product is always easy.
