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.
Major music industry changes and progress were highlighted last week as France reported on the impact of its radical internet anti-piracy policies over the past few years, and the RIAA contested claims by experts about positive industry growth. Also, analysts said they expect protests against the EMI split to hold up the final approval of regulatory agencies at least one year.
Has France Cured Piracy?
France’s controversial experiment to end digital piracy has already brought about major results, according to reports released in The New York Times. Two years ago, France approved new laws that would harshly penalize copyright violators, even cutting some off from the Internet, and the first offenders went to court last week to face the music.
Studies have shown that the French “three-strikes law” – which, like SOPA and PIPA has been welcomed by the struggling entertainment industry and despised by those that see initiatives of this type as a form of censorship – is administered by an agency in France called Hadopi and is already having a positive effect. Piracy has dropped sharply in France, the country’s digital sales are thriving and music industry revenues have started to stabilize.
According to president of Universal Music France Pascal Nègre, “I think more and more French people understand that artists should get paid for their work … I think everybody has a friend who has received an email [warning them about the penalties for piracy]. This creates a buzz. There is an educational effect.”
Despite marked progress, many within France still oppose the law, and its advocates are concerned it will come under fire if a new president is elected. Current President Nicolas Sarkozy was responsible for implementation of the “three-strikes law.” But his opponents are starting to piggyback on the movement in the U.S. that recently brought down two U.S. congressional bills and protest against an international copyright treaty.
In the past two years, Hadopi has sent 822,000 email warnings to suspected offenders, followed by 68,000 second warnings through registered mail. Now, 165 cases are in the third stage, and offenders are facing potential fines of almost $2,000 apiece as well as loss of their Internet connections for one month. And the secretary general of Hadopi, Éric Walter claimed that the low number of three-time violators provides proof that this education-based policy works: “Our work is to explain to people why piracy is a bad thing and why they should stop … When the people understand that, they stop. Of course, some people don’t want to understand. Then we have to transfer their dossiers to the justice system.”
A recently-released Hadopi report showed file sharing had dropped significantly in France during the past two years. And another study commissioned by Wellesley College and Carnegie Mellon university showed that France’s policies could actually be responsible for the rise in legal downloads from the Apple iTunes store. iTunes sales were significantly stronger in France than in any other European country from the spring of 2009 to mid 2011. The study further made its case by noting that musical genres considered to have very high piracy rates, like hip hop, rose far beyond those of low-piracy genres like Christian and classical. Researchers concluded that Hadopi brought about an additional €13.8 million a year worth of iTunes music sales in France: “We suggest that with regard to mitigation of sales displacement by piracy, a national anti-piracy policy combined with educational efforts is much more effective in the longer term than a small number of high-profile lawsuits.”
And even those not in agreement with Hadopi’s policies admit that the law has reshaped the way people behave online. Jérémie Zimmermann, co-founder of La Quadrature du Net, a proponent of an open Internet, said he feels the law has increased the use of virtual private network software and other anonymity tools: “Apparently some of its intimidation is having a psychological effect … The political costs of creating an institution like this are tremendous.”
And some analysts have said that because hackers can log into others’ accounts, instances of false accusations could be a major problem. Renaud Veeckman, co-founder of SOS Hadopi, which provides legal support to those that have received anti-piracy warnings said, “It’s like when someone steals your bank card number … Are you responsible, or are you the victim?” SOS Hadopi has already worked with five people in the third stage, and all five have been cleared before their cases hit court.
The first cases against suspected pirates may go to court in France before the first round of the presidential election, slated for April 22, and many question whether or not this was planned because the other candidates are against the law. Sarkozy stated last week that if re-elected, he would actually try to give Hadopi more power, giving it the authority to go after unauthorized streaming and other new technologies. Walter insists politics are not to blame for pushing the cases to court as soon as possible: “I’m proud to work on one of the only initiatives in the world to say, ‘O.K., we have just been speaking for 10 years, we need to try something … The point was not to know if it was a good idea or a bad idea; the point was to try something and then to say, ‘What have we learned? What do we know now?”’
The Music Industry is Collapsing, According to the RIAA
This past week, the RIAA continued to insist that the music industry is not going through a growth spurt, despite official reports published in Forbes and other reputable business publications that claim the contrary. Reacting to the “Sky is Rising” report presented by technology and music industry expert Mike Masnick at the midem music conference in late January, Joshua P. Friedlander, the Vice President of Strategic Data Analysis at the RIAA called for “a little less spin” on official numbers in a piece published on the organization’s blog last week.
While Friedlander stated he and everyone else wants to have a positive outlook about the future of the music industry, what Masnick said about the “bright spots” of the changing industry is based on misleading, incomplete information: “Who doesn’t love an optimistic view about the future of the music business? We’re as bullish about it as anyone and will never pass up a chance to tout the unprecedented variety of legal music choices today’s fans enjoy. The one problem? The study is highly misleading and doesn’t present an accurate or complete view of what has been really occurring in the United States in recent years … Instead of looking at actual sales data that is widely available, the paper looks at a global sales metric that includes a much wider range of industries outside of music. Moreover, we see real world examples that consistently show the importance of the ‘traditional’ metrics for working artists.”
And Masnick retaliated against the criticism in the TechDirt blog, stating the RIAA is only disputing facts because its own outdated business model is collapsing: “People should read the full report for themselves, where they’ll see that we looked at a variety of different data sources to see what the data said, and noted the various caveats with each of them. Oh, and that ‘global sales metric’ that the RIAA complains about? That’s directly from the IFPI – the sister organization of the RIAA, who basically represents the RIAA’s views around the world. If the RIAA does not like the IFPI’s own numbers, perhaps it should have a talk within its own organization.” Masnick added, “… The real story of the report is that the market is thriving for artists and consumers, but is much more challenging for big, lumbering legacy players. That would basically be the RIAA’s membership.”
And Masnick also pointed out that another part of the reason the RIAA is not fully understanding the full shape of progress within the industry is because many of the numbers are based on fact that technology has opened up new opportunities for artists that, in the old system, were not available and thus were not tracked as part of the “old system.” The modern music industry has created an entirely new environment, and legacy companies are resisting the new look of growth: “The real problem here is that the RIAA ignores the zeros. In the past, under the old system, if you weren’t some hugely successful label musician, you generally weren’t a musician at all. You made zero and you dropped out of the market entirely. So you didn’t count. But thanks to the new opportunities, many more people can make music, release music and make money from music. But that means a lot more competition. So, sure, if you don’t compete with that wider base of competition, perhaps you’re going to make less. But that’s not a sign indicating a decline in health of the overall market. It’s exactly the opposite.”
And as Masnick concluded, many of artists and labels he talked to at Midem were very excited about the opportunities that are opening up for them to make a living doing what they love, and “It’s just too bad the RIAA is looking backwards, rather than forward.”
You can also read more about the “Sky is Rising” report here.
EMI Split Opposition Likely to Hold Up Final Merger Approval
Despite the official dissolution of EMI brought about by its sale to two separate labels, the music industry is still expected to fight over what many perceive as unjust corporate consolidation, according to an article in The New York Times. And this battle could go on for at least the next year.
There have been some major changes regarding major labels beyond just the split of EMI in the past year: Warner Music Group (WMG) was sold to Access Industries – a conglomerate run by Russian billionaire – in May, 2011. And of course, in November, Citigroup split EMI, sending half of its operations to Sony and the other half to Universal Music Group (UMG).
The EMI sale seems to be a done deal. But, it still has to be approved by regulatory agencies in the U.S., Europe and around the world. The Federal Trade Commission has been investigating the mergers for the past few months, and UMG just filed its merger application with the European commission on February 17. Sony will soon follow suit.
The controversy in the industry has of course been that if the sales go through, the number of major labels will go down from four to three and also give UMG and Sony some significant advantages over WMG in the marketplace. As a result, WMG and many independent labels continue to lobby to block the deals, which also have consumer groups worried that the deals might have a negative impact on competition and innovation within the music space.
Helen Smith, executive chairwoman of Impala, a collective of small music companies said, “Turning music into a two-horse race is not good for artists, not good for consumers and certainly not good for the development of the online market.” Other critics have agreed with her, adding that an imbalance within the industry where UMG would control 40% of the global market for recordings and Sony 32% of music publishing would have an extremely negative impact. In some European countries, UMG would control as much as 50% of the market.
Edgar M. Bronfman Jr., former CEO for Warner and current board member said that the UMG-EMI marriage would be a destructive “supermajor,” and that Warner has already hired law firms in Washington to fight the deal.
The Federal Trade Commission’s investigation of the merger is already in its “second request stage,” which is expected to last through the summer of 2012. Experts believe that UMG will have a harder time gaining approval because it will be more powerful than Sony once the merger is finalized. (Sony only owns half of its current music publishing, Sony/ATV, with Michael Jackson’s estate owning the other half, and thus will only get a 38-percent stake in EMI’s publishing arm.)
What will Universal’s argument be? It will likely say that a larger company will have better control over prices and will be able to keep them down to discourage piracy. However, it may have to fight against its reputation for doing the opposite. When the company took over BMG Music Publishing, the European Commission actually noted that big labels had managed to impose higher licensing rates for recording rights than smaller, independent labels.
Music executives and analysts agree that the review process will likely result in a negotiation process. Universal might have to sell chunks of its holdings, particularly overseas. The company has already agreed to sell $680 million in “noncore assets” to help with the purchase.
Smaller labels have additional concerns about Universal using its power to gain more control over online music services, giving them the ability to dictate terms to technology companies, including Apple, and inhibit development within the space.
Tom Silverman is the founder and the head of TommyBoy Entertainment. Throughout his amazing career Tom has worked with and broken artists like De La Soul, Digital Underground, House of Pain, Queen Latifah and Afrika Bambaataa. In addition Tom is one of the main executives who has revived the New Music Seminar. I was grateful he took the time to speak with me. Please check the bottom of this post – Tom was kind enough to offer my readers a code for two for one admission to the L.A. New Music Seminar coming up on February 1st & 2nd.
Tom, you have a unique worldview given your history and current position in entertainment. Tell me what you’re seeing out there. Some of the statistics I saw at New York’s New Music Seminar are a little daunting. What is the reality for the aspiring artist these days?
TS:
Last Thursday, the new 2009 statistics came out from SoundScan. I’ll go over the most recent things because that just came out. Interestingly enough, and this is what we’ve been identifying at the New Music seminar is that overall music sales are up by 2.1% — 1.545 billion sales were made. That includes physical, digital, singles, albums, everything, video, music video. Total album sales including digital are down 12.7%. Digital tracks are up 8.3%, which is pretty great considering everyone is saying digital is leveling off, and I find that to be a hype. The percentage of increase is slowing down, but that’s because it’s a numerator/denominator thing. The actual amount — the number of additional units was almost 100 million more digital tracks sold this year than the year before, and 100 million is nothing to laugh at.
When you want to talk about vinyl, it’s up 33% and it went from 1.88 million to 2.5 million; so, the increase on that was about 700,000. Full-length digital albums are up 16%, but then again they started at only 65.8 million, so they’re only up to 76 million. The interesting trend we follow at the seminar also is the ratio of singles to album sales; In 2004 there were virtually no singles sales- it was all albums. Last year there were 2.5 times as many digital download singles as albums, physical and digital combined. This year it’s moved to 3.1 times as many, so look to see the ratio of singles to albums to increase. A lot of this comes from the radio hits. What’s happening is that where the major labels play, they’re getting marginalized faster than the indies and the smaller artists. We identified that the Top 10 has dropped 65-70% since 2000, probably 70% as of this year. If you just take records that sold over a quarter of a million that’s down 65%; but if you take records that sold under 10,000 it’s only down three or four percent.
I don’t recall the exact figure but I heard the number of albums that went platinum in 2009 was frighteningly low.
TS:
There weren’t that many. In 2008 there were only 112 that sold over a quarter of a million. So if you think that the major labels only make money – they can’t justify their existence at the size they are on records that sell over a quarter of a million. A good part of those records that sell over a quarter of a million they hoped would sell over a million or two million, and only sold a half a million or less. So they overspent on them and didn’t make money on them. So those 112 records are the only records they could make money on at all. Probably 25-50% of those didn’t make money either. So only 60 releases make money, and the amount of money they make except for maybe four or five giants hits – the Lady Gaga and Black Eyed Peas level of hits – aren’t really making significant money. In the old days, one hit used to pay for 20 stiffs. Now one hit doesn’t even pay for one stiff.
Depending on what’s spent, one hit doesn’t always pay for one hit.
TS:
Exactly. Half of those 112 didn’t even make money or broke even. To sell 300,000 albums and not make money? That’s not a good thing. It’s because they were hoping to sell 600,000 or 700,000 or 800,000. The labels are getting more cautious. So here’s what’s happening, and this is what we discuss at NMS. There are two major concerns we have. One is, the labels, both majors and independents are more conservative; they’re not going to take risks on artists or invest in artists just because they hear the demo and they like the songs or just because they can pack a house. That’s not enough – at least not the major labels. They need to know the artist is going somewhere between 30 and 60 miles per hour already to make an investment in it. They can’t start from scratch anymore, because so few artists are breaking. Here’s another statistic in 2008 there were 1500 releases that sold over 10,000 album units. Out of that there were only 227 of them that were artists that had broken 10,000 for the first time. So in the whole year only 227 of the artists were artists that had broken what we call the “obscurity line.” When you sell 10,000 albums, you’re no longer an obscure artist; people know about you. You may not be a star yet, but you’re in the game. That gets you out of the glut and into the game. We looked at the 227 and identified that only 14 of them were artists doing it on their own and all the rest were on majors and indies; a little more than half were on indies. And that includes Lady Gaga in that number of 227. It includes the biggest artists and ones that sold 10,000 as well, whether they sold a million or 10,001. That’s a pretty daunting number.
How have you adapted with Tommy Boy Entertainment? How has your personal business adapted to this shift? You seem intimately acquainted with how things are going. How have you weathered this transition?
TS:
By starting the New Music Seminar again and doing tons and tons of research deep in the data, identifying what’s happening and not happenings, talking to people who are making it happen and doing it alternative ways, we’re identifying what the opportunities are out there. Tommy Boy is more than a record company; we don’t consider ourselves a record company anymore, we’re much more than that. Now we’re sort of a strategic artists positioning company, and our job is to take an artist from where they are in revenues to a much higher number. If we work with Artist A that’s making half a million dollars a year, our goal is we take them to a million in year one, two million in year two, and three or four in year three. That’s our goal. And then we take a percentage of that revenue. And we’re talking about dollars, not record sales, because we may decide to give the records away, and we may only make about 10% of our money from the music and master use or 20% and the rest of it will come from touring and merch, publishing and possibly sync and other things. We’re not concerned with where the money comes from as long as it comes. Tommy Boy is known for building brands, from Queen Latifah and Ru Paul, to De La Soul and Afrika Bambaataa, Naughty by Nature, House of Pain, so many household names now that you know. When you mention the name, you can see them; like Digital Underground, when you close your eyes, an image of who they are comes up. Coolio … they all became significant brands, and that’s what we did. Tommy Boy is itself as a significant brand. We’re not just a record company. Our business always was building brands. How we used to make money was selling records; but we don’t see it as the way we can make money now. It’s one of the streams of revenue that we can make money from, but it’s no longer the most significant or even the second most significant way we’ll be making money. We can no longer be limited in how we see artists to the music domain. It’s more than the music. We have to work with the artist’s positioning.
So, back to the New Music seminar. As it’s harder for artists to break, and no labels are going to come to an artist just because they like the demo, that’s hard for artists to take. Artists don’t want to hear that. They’re spending all their time, because they’re musicians making a cool record. And that’s what they should do, but that’s only the very beginning of it. One of the things we identified in that three times as many people buy singles as a whole album, it probably doesn’t make any sense to make a whole album, or it’s a waste of time and money in the studio making an album when they’re just getting started, because every artist breaks with one song. And they might as well focus on finding that one song before they waste the money on the album.
Do you suggest EP’s then as a plausible alternative?
TS:
EP’s or even singles. As you build fans, if you’re touring – and every artist should be regardless of genre right now to build their fan base and also sell merch and actually make money – they should be touring all the time. You create music to satisfy your live audience. Once you have fans that are coming to your site, then you need to keep flowing new music to them on a regular basis to keep them engaged, and hopefully good music. You’re going to say, “I’m no longer an album every 18 months or two years. I’m a song every two months or a song every month. I’m a monthly publication or a bi-monthly publication.” You look at yourself as more of a periodical than as an album-making business. I think the album days are coming to an end. Unless you’re already established and you already have hundreds of thousands of fans, in which case the touring and album making might make sense. I just talked to one of the writers and producers for Black Eyed Peas, and they’re going out on tour right after the Grammys. They’re bringing out two tour buses that are studios, so they’ll be recording while they’re touring. I think that’s the new world, is that artists will do their shows and then they’ll go into their mobile recording studio and write and record. Now that recording equipment is so mobile, it’s easier and cheaper to do that, and the top artists are going to do that, and even the smaller artists are going to have to be writing on the road constantly. And whenever they’re in a place where there’s a studio, they may want to drop a track or they can record live tracks to perform and practice and rehearse and do live tracks and record those live tracks and make them available. The flow of music from artist to fan is going to be more important. It didn’t used to be important because there wasn’t the kind of 24-7 contact between artists and fans. So as you build your fans, they’re not going to be happy with one album every two years anymore. That’s not going to work. After three months, they’re off finding another artist that’s going to take your place. If you want to keep their interest, you have to keep at the top of their consciousness, and that requires new creative on a constant basis.
So at the seminar we talked about all of this. We talked about the new model, which is no longer based on records, it’s based on fans and the relationship between artists and fans, and how you monetize that relationship. We talked about the fan relationship pyramid. We have to look at our fans based on their levels of passion and their levels of spending. What kind of content we see delivered to our fans – whether it’s for money or for free – depends on their level of passion and their level of spending. So somebody that doesn’t want to spend any money – a tire kicker – probably shouldn’t get something first. They probably shouldn’t get exclusives. The exclusives should go to the most avid fans. That’s the new world. And there’s a science – we call it “fan migration science,” and we teach fan migration science at the seminar. How do you migrate a passive fan into an active fan? How do you capture fans? The new music business is about getting fans. That was always the business, but we – artists and labels – were always confused. We thought it was about selling records. Record sales were how we used to make money. It may not be how we make money now. But really how we made money from it is that fans bought our records. Passive fans bought the single, active fans bought the album, super active fans bought the album and went to all the shows, and bought the t-shirt. So we have to look at our audience in that way from now on.
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Check out the rest of this interview
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If you will be in the L.A. Area or willing to travel to the L.A. area you should check out the New Music Seminar 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”.
Eric Garland is the CEO and Founder of Big Champagne LLC. For those unfamiliar with Big Champagne it is an online media measurement company. It is a gross oversimplification of what they do but basically they monitor what content moves where online and how often. How many times is apiece of content (a song, a movie, a video) purchased, traded, streamed or stolen online? Big Champagne can tell you.
I first met you in 2003, and you were really just starting the company off. Tell me what the impetus was for tracking media and what you did and what you do now.
EG:
The company started as most creative ideas do with an artist. I’ve tried for many years to take credit for the original brainstorm, but it was my friend Glen Phillips – who I’m sure you know of, and if you don’t, his band was Toad the Wet Sprocket. In the late 90’s he had broken up the band to become an independent artist and do a solo album. And Napster happened, and we were friends, and he knew I was into the sort of tech end of the digital music space.
What were you doing at the time?
EG:
I had been a career management consultant straight out of school and had been working for a big HR consulting firm called Towers Perrin. We did a lot of work in the mid 90’s for Anderson and for Enron. I got out of that business at the right time. But I’d always been involved in what was called at that time, the CM^2 Practice of that business – Communications and Measurement. So Glen and I were talking about the original Napster, and it was at that moment when Lars from Metallica was giving press conferences about suing every last Metallica downloader, and Hilary Rosen and the RIAA were making a lot of noise in the initial litigation. I remember Glen saying one night after a little showcase when we were sitting at the bar in L.A. at Largo, “I just want to sell those people a t-shirt and let them know I’m still alive, and if they were a fan of what I did with the band in my major label incarnation that I’m still here and I’m still writing songs, and I’d love to get an opportunity to play those songs for them.” It was just this very human moment where he said, “I don’t want to sue anyone, I just want to find an audience.” Following that, we had some really directive conversations about how to take – not Napster specifically, I think we were already talking about all these Napster-like things that were popping up on the internet – all these internet communities that were growing up around what the industry viewed as wholesale theft of the music and turn it into a community that an artist could leverage.
The early conversations about Big Champagne were very much about social networking before we even had that term. We did a lot of work with Glen and ultimately a lot of artists in the early part of this decade doing things like marketing to Napster users and Audio Galaxy users. There were a lot of p2p’s popping up that had reasonably good community features – things like artist subscription list. Audio Galaxy had these great things you could sign up for saying, “I’m a fan of Elvis Costello, and if there’s any news about Elvis Costello or new music, you have permission to let me know.” We were doing that very nascent early internet marketing stuff, mostly on behalf of bands and artists because labels wouldn’t touch p2p. And then because of litigation, most of those great social features of early file-sharing networks were taken away. They created obvious targets for the music industry’s lawyers. The p2p operators had to adopt this “See no evil, hear no evil” stance. So we looked at what we were doing and said, “Look, if this becomes really anti-social and about anonymous people hunkered over their glowing streams, uploading and downloading music in their solitude. What’s the opportunity? Is it all just lost?”
We looked at what we were doing and said, “The only part of this business that would translate in that world would be broad metrics and essentially trying to do for what internet music what the Nielsen Company did for early television audiences – quantify activity and assign it geographically and start to do audience measurement.” We said, “We’ll push in that direction, and the rest in our small way is history.” We did that and got a lot of attention doing that because it was during the period when the media was fascinated and consumed with internet and music piracy – up, down or sideways. We became a frequent source for information and by the time things like iTunes and Rhapsody and the earlier legit places for digital music plays came along, we were considered an authoritative source for information about digital music. And we ended up going on to do deals with retailers and portals and social networks.
It started off as Napster and the offshoots – all your p2ps. And now you track all the digital download stores and all the sales for the aggregators.
EG:
We do, yes. And broadcasters. We’ve had a deal for several years with Clear Channel. We work with MTV/Viacom. We’re trying now to incorporate information about – and I say this smiling a little bit – “all of it.” I don’t know if “all of it” really exists anymore, but we’re trying to map as much of the measurable consumption of music as one can. As a result of that, people I knew when you and I knew each other will see me and say, “Hey, Garland, congratulations! You went legit! You came on over from the dark side.” That always sticks with me a little bit. I always want to respond with, “No, we didn’t. We really just followed the marketplace. When people were consuming music on the internet with the original Napster, we paid attention to that. And when they started to consume music on Myspace, before most of the people in the business knew what that was, we paid attention to that … and YouTube and iTunes and all the rest. Our business didn’t change. The ways people consumed music changed, and it’s always been our business to follow them. So that’s what we do.”
I’m not going to dwell on it because I know these questions have been beaten to death – but are we still looking at piracy being 19/20 downloads basically? Are we looking at 95% of all music downloaded is being done without compensating the artist?
EG:
Downloads remain overwhelmingly free and unauthorized, yes. It varies a lot by artist and title. For some artists, 95% is a fair and in some cases conservative estimate to give piracy for certain types of artists.
I didn’t realize. Is there a genre difference or some type of artist that is suffering more from theft?
EG:
Absolutely, and statistically it’s very easy to plot. A big urban crossover or pop smash – a single song that’s dominating the top of the rhythmic or the pop charts – is going to be overwhelmingly downloaded for free and illegally. And you look at the number of records sold compared to those downloads, and it will make you cry. But then you look at Susan Boyle, and not only is there relatively little internet piracy, but you look at her MySpace plays – legitimate, but internet access as opposed to paid traditional retail access – and it’s overwhelmingly traditional bricks and mortar. An upper demo – old folks – love buying records, and a lot of kids don’t even know habitually what that means. It’s rare for them to buy a record at all. As a genre, Nashville, country held out far longer. The big urban records got hit the hardest and fastest and remain by the numbers the most pirated.
Is that because they are more likely to be online in torrent form or for exchange, or is that statistically?
EG:
It’s never about supply. Everything is readily available. You can never say, “Well, Susan Boyle doesn’t get downloaded a lot because it’s hard to find her, and it’s not quite one click away.”
Well sure, at that level. I guess I meant somebody on an obscure indie put out something, and there just weren’t a lot of peers or files out there.
EG:
I think especially in recent years with the rise of one-click hosting sites, which include everything from Rapid Share to Mega Upload and Storage-Dot-O, you’d be dismayed and cry your eyes out if you just Googled “name of indie record” and the word “.rar” or the word “torrent” and “rapid share” just using the Google search engine, without having to fire up any file sharing software at all. It really isn’t about supply, because the internet continues to get better and better about making it all available. It really has to do with two things. The obvious and less interesting thing of the two is age; somebody who is 40 or 50 or 60 is more likely not only to like that Susan Boyle record but to buy it as opposed to grabbing it on Bit Torrent, and somebody who is fifteen is more likely to love the Rihanna record, but is more likely to grab a song – even if they pay for it – for a buck than to spend $15 or $17. That’s the less interesting thing because I think it’s so obvious we can all intuit that.
I think the more nuanced, more interesting thing to me is that it’s not just the demo, it’s also the nature of the relationship between the artist and the fan; meaning, as the nature or the impression of downloads or listens, Lady Gaga’s piracy rate is much lower than a lot of big urban crossover or pop one-hit wonders. Why? Because even though it’s the same kids and even though God knows the material is easily accessible for free online as it is with Taylor Swift, there seems to be more connective tissue and more expectation on the part of fans that, “Hey, this is more than a song, and may even be worth a couple bucks; and it’s definitely an album experience and not just about grabbing the single.”
There’s definitely always been the sense that a nameless, faceless band that came along with one single was much different from somebody who was a press darling and a fashionista and engaged on more fronts.
I guess what I am driving at is – is there something artists are doing online that correlates to more or less piracy?
EG:
Unfortunately I think the clearest correlation there is, the more digitally-savvy you are – because you are usually a reflection or a mirror of your own fan base – and digitally positioned you are as an artist, the more widely pirated you are going to be. That seems to be the overwhelming correlation. If you are selling vinyl records and CD’s off a website and collecting check by P.O. box only, chances are the rate of piracy will be lower.
Wow. That’s almost a slap in some ways. Be online, be everywhere and get your music ripped off. (I’m shaking my head and laughing bitterly and without joy at this point as is Eric)
EG:
We’re laughing, but it’s so abundantly clear that I don’t want to shy away from it. Digital is dual edged. I don’t use that to recommend against leading and making use of all the digital platforms and being an overwhelmingly 21st Century artist. I don’t think you have the option to just say no to that, even though it comes with an extremely high rate of piracy, because that’s where the entire business is going. You’re going to have to be able to win in that environment.
Musician Coaching: Let’s get off the happy track of piracy soon… I was at a Christmas party the other night, and I was talking to a music manager who has huge clients and he said, “Yeah, there’s no money in this business anymore.” And clearly he has different standards than I do, but it’s like, “really?”
EG:
I get that at every gathering, especially at Christmas. It’s a Dickensian Christmas in the music industry, because in part, the harder they come. It is I think in some ways most painful in those upper ranks. I’ll certainly put your friend who represents big artists in that category. Because there is so much to lose, and it’s so immediately visible when the bottom starts to drop out. If you are a struggling artist, or a lower/middle-class artist – someone who has quit the day job or barely – I’m not sure all these macroeconomic forces and things like the global piracy epidemic actually affect you as immediately. Your business is a very different business, and you’re actually still just trying to get heard and make connections with a relatively few number of people, some few numbers of thousands or tens of thousands of people who are together going to help you eke out a living. And at that level, I don’t know that you can point to the sea change in the industry from 2000-2010 and say, “It killed me.” In balance, you’re probably about where you would have been or a little bit north of where you would have been. Because with that sea change have come some advantages to the little guy. But if you’re Aerosmith or the Eagles, of course you have some sob stories to tell, because those big checks are still big by your standards or mine, but they’re not as big. And they never will be again.
Do you think there will ever be a diamond album?
***(RIAA classifies an album as diamond when it has shipped ten million copies)
EG:
I read something that suggested that a couple of albums over the last ten years sort of crept into the diamond. I think the Beatles’ Number One is now diamond.
I’m not sure that counts.
EG:
That was the point I was going to make. Some catalogue records may still continue to creep into the diamond category typically; but will there ever be another new artist who genuinely sells ten million copies, an artist that is not already known to all of us.
And you can say that with absolute certainty with all the numbers you have flying around you daily?
EG:
Oh, with great confidence. I tried to dramatize it during the MJ news cycle. We got a lot of calls for number when Michael died and the pile-on of digital sales of his catalogue started; and somebody made the mistake of asking me the question, “Will there ever be another Michael Jackson.” And I said, “No.” And the person said, “What do you mean? You didn’t even take a pause!” And I said, “Well, I’m not saying there will never be another quadruple threat talent or that there won’t ever be someone who captivates the bizarre imaginings of the world the way he did. I’m just saying that we will never again live in a world where so few media channels allowed one artist to dominate the attention of the world n the way that Michael did.” The ascent of Michael Jackson correlates beautifully to the ascent of a monolithic global media structure, and our world will never again see that. You’ll never again have just three channels on television with Michael Jackson on two of them. So when I say with confidence, “No- We’ll never again have a diamond album,” it’s not because we won’t have great artists or very popular artists. It’s just that the world will never be captive to so few signals ever again, so the marketplace will always be more fractured than that.
I definitely want to change subjects and talk about the fact that you’re tracking the evolution of how records begin to creep and sell both indie and major and across the board. Where do these things that go viral start usually? And are there any such places that are not as obvious, or are there channels you believe are underserved where a lot more files are propagating?
EG:
It’s funny, and it’s kind of reductive to say, “Internet viral is just in some ways a new expression of nomenclature for word of mouth.” Because it is really all the same thing it’s always been, only with increasingly powerful tools. You remember in the early days of internet – mid 90’s to late 90’s – there would be these e-mail forward viral phenomena: “Dog Bites Man’s Crotch” or something. There were these horrible little QuickTime videos, and those things at that point no one was tracking them, because it was just going Outlook to Outlook or inbox to inbox. But we know because we would go to lunch and talk about it that they were viewed tens of thousands of millions of times. In the same way, e-mail is still a key driver of word of mouth. We’re typically not e-mailing Quick Time videos around anymore, we’re e-mailing YouTube links. But e-mail is a huge driver and obviously Twitter and all the various messaging clients of all the social nets – Facebook, etc. – but it’s still fundamentally comes down to a lot of people simultaneously deciding that something is worthy of a few seconds of attention for fill-in-the-blank-reason. “This is curious, this is funny, this is outrageous, this is sad, this is impossible.” When I think about the OK Go treadmill video, I think mostly, while it certainly got a lot of attention for the band, it was not about a pop rock band, that was about nerds on treadmills and executing what I think people thought was an outrageously accomplished and choreographed routine in one take: an impressive feat of humanity. That’s one of the good ones, because I think people wanted to watch it for the right reason.
So the music was a backdrop for a stupid human trick in your estimation?
EG:
Yeah, but a friendly, empathetic stupid human trick in a sense that I think people were genuinely impressed and cheering these funny guys. It wasn’t, as so many of these things are, strictly Schadenfreude or mean-spirited. There are a handful of things that appeal to some aspect of our humanity, and that just drives us to tell a friend, and we have so many tools that make it “viral internet phenomena.” But I’m not convinced that the hit rate is very high in terms of there being something really additive or it building some asset that an artist can use and capitalize on and realize long term. Sometimes it vaults an artist into a level of recognition or consciousness that they can really benefit from, but I’m not convinced that’s eight out of ten; it may be two out of ten times.
You have all this wealth of information, and clearly, if you release a video you should be on YouTube and if you release a song you should go to one of the many cheap to free distributors and be on all the most popular digital service providers. But are you finding that there are any platforms on the rise that people should be aware of, or any things bubbling up from places that are unexpected?
EG:
I’ll come back around and answer that specifically so I don’t bury your question, but what it makes me think first is, I’m not a big believer in short cuts, cheats, jumping to the front of the line. In other words, I think a lot of artists are thinking, “If I’m one of the first guys who’s using the next Twitter or the next Facebook, I’m going to have this huge advantage and going to have gotten one over or exploited the tools in a way that essentially let me jump the turnstile.” I’m not a huge believer in that, and I say that in part from the perspective of someone who like an aspiring artist is trying to build attention, a fan base and relationships in my case for a little company. We’re trying to do this too, and it’s certainly not a direct analog, but we’re certainly trying to maintain a profile and build meaningful connections and grow the scope of those connections. What we always say to ourselves and what I would say to any artist is, certainly, be everywhere to the extent that it costs you nothing to do that – not even time – to the extent that all the videos are uploaded to a single YouTube account that is clearly identified as being yours and not being even that clever but being diligent about things like managing your meta data, making sure your digital music is available everywhere that someone might meaningfully look for it. You can work with somebody like a TuneCore or a CDBaby to outsource that stuff for you.
But be everywhere not in the sense that you’re spending 40 hours a week as an artist doing things that artists don’t really do, but rather tick all the boxes. Fine. But then your real job is to use that flint rock and create some little sparks and from sparks a little kindling and from kindling a fire, and then fan that fire, and I don’t believe in a whole lot of short cuts when it comes to that. You have to be good, and then you have to focus on that first and second degree of separation and build your Kiss Army, one by one, by one.
Sometimes, without the benefit of the traditional media machine (radio promo and video ads) an artist makes it through. It’s so rare though and the circumstances always seem to be so specific to that artist that there seems to be nothing that can be learned from their example or replicated by others. There weren’t really a series of moves on the chessboard. For most artists success is something that has to be earned fan by fan.
I was once told by Ahmet Ertegun “A hit will find a way.” I guess that hasn’t changed.
EG:
Right. I think that’s true. To your question though about are there any new places, new venues?
You would know if there are places online or tools to look out for. I would love to know your perspective on companies or platforms that would be of interest or are vastly underserved.
EG:
I actually think that one looming opportunity is in these one-click hosting sites, because I’ve never seen artists use those platforms at all. They’re free. You know what I’m talking about, this category of things that includes Mega Upload and Rapid Share. They’re free. You can be the one to create what could in effect be your EPK or content bundle that you want anyone to be the first thing to find or see. You could be the one to upload that and watch. It’s like this brilliant stroke of free SEO in the sense that anyone that searches for your relevant keyword – the name of your band or song – I guarantee you among the top results are going to be these one-click files. Google floats them all to the top. It’s in some ways really driving the piracy problem. But as an artist or manager or label distributor, you could take some control of that.
You can be the one to determine what the content is and how it’s distributed and whether it comes with a file on or an opportunity to get someone to opt in or have a relationship with you. It’s just something where strategically, in the same way artists were loath to use file sharing networks because they didn’t want to get their hands dirty – not so much artists, but management companies didn’t want to work with file sharing companies because they didn’t want to get their hands dirty. In the same way that it’s verboten to work with a bit torrent site, I think we don’t have that luxury with one-click hosting. These are not pirate businesses, these are legitimate businesses. They are sometimes U.S.-based, venture-based, really profitable businesses. And are they enabling infringement in the same way that Google and YouTube are? Sure, all day every day, but they’re not of the variety that they’re going to be easily reprimanded or knuckled under, so I don’t think we have the luxury of saying, “Oh, I don’t want to work with them.” I think there’s too much opportunity there.
I didn’t even think about that, but with Google’s music initiative anybody who would upload that on several of those sites could definitely drive what the first impression is or what one of the first impressions is…
EG:
To put a fine point on that one, if you are not making streaming music available now – we’re not even talking about giving something away for free – through Lala and what will now be Myspace Music, iMeme and iLike, you’re not even covering your bases fundamentally. And you probably don’t have time for that, nor should you make time for that; but CDBaby or TuneCore or one of the other aggregators will.
Checkout Big Champagne and Follow Big Champagne on Twitter
This is a 20/20 piece that ran some time last year about OMC (the one hit wonder who gave you “how bizarre”) front man Paulie Fuemana. It’s pretty amazing how you can make five million on a song one year and be broke the next.
I am actually pretty psyched about the New Music Seminar book that was given out when you purchased a badge. In the past guidebooks tended to be lists of the events and panels and performances as well as a contact list of the industry people who were attending and very little else. This guidebook has tons of information geared directly to the artist including sample tour budgets, riders and advice from industry professionals on their topic of expertise. My personal favorite piece of advice from the book was from Kevin Lyman of the Warped Tour who suggested checking the oil in your van on a regular basis and several ways to prevent your gear from being stolen on the road.
I was perhaps overly critical in my post yesterday about the panels as I forgot to mention that Emily White from Whitesmith Entertainment offered very real and tangible ways that Amanda Palmer and her other artists retained fans from the road including having her tour manager’s cell phone number shouted out from stage for the purpose of collecting fan email addresses via SMS. Of all of the panelist I got the sense from her that she had spent the most time at ground level working with bands (and it turns out she started out tour managing the Dresden Dolls). The rest of the panelists were discussing some good advice for fan retention and interaction but I wanted to hear more about the process of building a fan base. As I mentioned yesterday I missed the touring panel and I am sure judging by the members on it they would have much more experience in growing a following than I would but this is what I’ve learned and oddly most of it came from my time as a gigging musician rather than an industry executive.
I played bass (and became the manager by default) of a seven piece band that had a three year run from 1992-1995. The band was by no means a big success but we did manage to bring between 200-300 fans out on a regular basis towards the end of our little run in the NYC market which is a particularly difficult market to build a following. I’ve had other projects but this one makes the most sense to describe because it was really the band I learned the most from because I knew absolutely nothing when I started. I have since used modern tools in other projects I have been in more recently but these examples somehow still resonate.
Our first gig came about opening for a friend’s band. We were spared the cold calling and got a pretty lousy time slot club that at best held 400 people (I mean really held 400 people not what the fire marshal said it should hold). It was late-ish on a weekday night but we did manage to put 35 or so people in the room and we were invited back. At that point I don’t think we had even spoken to the guy who booked the room other than to ask what kind of back line was available and I’m pretty sure as it was our first gig that none of us really knew that it was called a back line.
It’s a funny thing being in a band, the idea was to play music and not have a real job because I hated the part time jobs I was able to get at the time and I think I dreaded job interviews even more. I would come to realize that every gig we ever played was simply a job interview for the next gig. If we wanted a better job at a better time slot on a better night we had to out perform the attendance expectations. If we wanted the same people who were there that night to come back the next time we played then we had better put on a damn good show.
I befriended the promoter of that first venue, it turns out he also booked a few other clubs and as we drew well for him on a usually slow week night. He was kind enough to suggest a few other nights at his other venues with bands that were more “our kind of music”. At the time we wanted to be like the JBs but were all very young and overplayed too much so it wound up being more like (sigh) disco. We played many such gigs with other bands who had a similar sound and were able to pull some fans from them as well.
I can already see this will be too long winded so I’ll sum up the things that helped the most going from a few dozen friends to a regular draw of several hundred people.
1) Make personal connections. I am going to take it for granted that everyone wanting to build a business is collecting email addresses and on all the social networks and using some restraint so as not to mass email everyone six times a day about important stuff like the lead singer having a headache. But I most remember being out and about with my bass on my back talking to people I worked with, talking to people I went to school with, talking to record store clerks and just talking to anyone about music. We wheat pasted flyers to telephone polls and send out mailers but I most remember that the people I stopped to talk to (without hard selling them) and actually handed a flyer to were the people who most often showed up. I still believe that looking someone in the eye will always be much more effective than emailing (at least locally). A side note about wheat pasting, I’m pretty sure no one does it anymore and it’s illegal (in NY) and the clubs get fined so be wary. Also be wary of smoking cigarettes while wheat pasting because inhaling wheat past that lands on your cigarette can be rather disorienting albeit not entirely unpleasant.
2) Be fearless. Like a band? Want to open for them? (and no, not U2, the big local or regional act) Introduce yourself after a show, get an email address explain your situation if they have some time. I’d be surprised if they didn’t do the same thing to the big regional act when they were coming up. Several larger acts mentored me after introducing myself in this way and one in particular became a life long friend. These relationships allowed my band to open up for some really powerful regional acts and really grew our band’s profile.
3) Be humble – Ask questions. Find people who have what you want, or even better find people who have what they want and ask them how they got it. For better or for worse I asked a local promoter for an unpaid internship because I wanted to learn how to get my band signed (yea, yea it was the 90s, shut up) and it got me an internship at Atlantic records. Ask the people at local clubs what they have found to be the most effective ways of promoting shows at their venue as soon as you book the gig and listen. The question alone let’s the person booking your act know that you care about your business.
4) Be Polite, follow up and don’t take rejection personally.
If you are in a position of cold calling put yourself in the position of the person on the other end of the line. And then think back to the stereotype of all musicians- guys and gals – as a rule, we suck! How much mediocrity and worse is out there? Do you silently groan when you see 3-4 normal looking people who are unknown to you take the stage before they have even opened their mouths or played a note? Well okay then… now picture it is your job to sift through mediocrity that we all know so well. If the last visual didn’t grab you go immediately to Guitar Center and stand in the guitar section listening to people trying out instruments for an hour if you come back smiling (from joy not Schadenfruede) please Fedex me some of what you are on immediately. Short story long – would you be happy to hear from a musician you didn’t know? I’m gonna go ahead and guess no. So call, be polite – provide facts about your business and accolades not how talented you are and then call as many other clubs that would have an act of your size and hope for the call back. Ask them their preferred method of getting material to them and do it as they request. Monday nights and open mics are the way to start and take baby steps from there.
5) Start small, start segmented. I will give it up to Terry McBride from Nettwerk who when I asked the basic build a band question to the panel he was on @ NMS simply said “start small, start local – Tribes.” This is sound advice. Go after an audience or community one community or segment at a time. At college- go after college students. Work at a big company? Go after co-workers. Belong to a strong group of some kind be it religious, national, political or hobby oriented? Group them together and market to them. The band I was in targeted the intoxicated, NYU students, Kung Fu fans and video gamers and even before the internet we manged to find these people. Be sure you are a part of these communities though because outsiders pedaling their wares with a hard sell are not at all welcome.
I may be way to scattered to be a blogger but those are some of the things that helped me – drop me an email I want to hear from you.
I just got back home from the New Music Seminar which was held today Tuesday, July 21st at one of the NYU buildings just south of Washington Square Park. The last time I had stood on that spot I was watching Elliot Smith perform at the building that preceded the one I stood in today- at the time it was called the Loeb Student center. It was also at the Loeb student center that I attended my first music conference as a musician trying to get my band signed or be a famous musician or whatever unrealistic albeit wonderful thoughts danced around my marijuana soaked head in those days. I guess it was fifteen years ago, and it was NYU’s “Independent Music Festival” 1994 that I tried to get my band noticed with a cassette of three of songs from my band. I got the only advice that ever really resonated with me as a musician that day, just six words: “play out as much as possible.”
The band broke up, I got an internship at a big record label that became an assistant job and so on until a few years later I became a jaded A&R executive who had spoken dozens on panels and had done my best to answer the same old questions that I had asked when on the other side of the panel.
It was wild to be back in the audience after having been on both sides of the stage and now somewhat removed from the emotional attachment of clearly belonging to either the artist or the executive side. (I still play for kicks and on the other side- I don’t quite consider myself an executive in the same way I did when I was a label guy).
I stayed for the keynote speech by Courtney Holt (President of MySpace Music), a panel called “Welcome to the New Music Business: Everything You Know is wrong” which featured Ian Rogers, Matthieu Drouin, Mark Ghuneim, Bruce Houghton & Jeff Price and a second panel called “Fan relationship management: Quit your day Job” which featured Tom Silverman, Steve Greenberg, Terry McBride, Ted Cohen, Tim Westergren & Emily White.
This is not an insult to the New Music Seminar- I am very glad I went but it’s funny how the company names had changed, most companies were now followed by “.com” or “music” rather than “records” and it is now thankfully much more acceptable to say “I don’t know” rather than slinging some incredible amount of bullshit. It does seem however, as if the music conference is much as it was fifteen years ago. There is a big disconnect between the panels and the audience. In my opinion people who come to panels desperately want very tangible solutions to very real problems about the basics of building their business rather than abstract conversations about the problems of artists who are several rungs higher than they are on the food chain. Granted I missed the “your live show and tour” panel which featured many successful artists who had done it themselves – I’m told it was great. It just never ceases to amaze me how the majority of music business professionals can’t articulate anything about the process by which an artist builds their business on their own so that they are even worth the attention of those same professionals.
I am off and running now but I am going to do my best to provide as much information as I can that worked for me building a local following when I was playing regular shows. Sure, I was armed with cassettes and only got my first email account in 1994 but some of the principals are still the same.
PS – We can all stop flogging the dead and decomposing horse that is the major record label – we get it already.
The group Blue Scholars recently posted the following on their blog:
The old record deal model is dying. Not to say it’s obsolete or not worth it, it’s just that while new alternatives are waiting to be implemented, those traditional opportunities are drying up. Like print publication gigs for journalists. There’s a much larger pool of independent artists with the means to produce music independently. There’s that whole “new media” phenomenon to promote your music. They say the world is at the independent artists’ fingertips, but it’s only half true. Things still cost money to produce–labels might’ve pimped artists, but at least they came out of pocket to back a project financially.
Things change, it happens, we live with it. But changing times demand changing ways of doing things, especially in an economic downturn. Which is why, after ending our partnership with Rawkus last year, we turned down some record deal offers that we might’ve signed in a more quaint and hopeful era.
Today, it gives me great pleasure to announce a collaboration with Duck Down Records and Caffe Vita to release two of our upcoming projects (OOF! EP, August 25 and an untitled full-length album, mid-2010) and re-releasing our last album (originally released through Rawkus), Bayani (Redux).
With the record industry in flux, conditions are ripe for an alternative. One where the artist, rather than becoming an employee of a label or sponsor, contracts the label and sponsors to do work for them. Everybody still gets a check. But it’s a relationship where the artists (and their handpicked “team”) not only have creative freedom but economic power. A counterbalance to Industry Rule #4080.
Honestly, if it were up to me, I’d put out the music for free (and get paid for shows and hopefully, royalties). Or work out a trade for whatever you can me hook up with from your job. That would be ideal if independent artists had more access to the media (we don’t) and more people paid attention to shit not on TV and radio (universal health care would help us out too).
Realities what they are, we–a hip-hop group from the slept-on capital, Seattle–couldn’t let the opportunity to work with Duck Down Records and Caffe Vita pass by. They’ve both retained their independence and thrived on it in a marketplace filled with big business trying to stomp em out. I think they heard us and our audacious plan out because, in essence, they share the same philosophy towards their ventures that we do with our music.
I don’t even like the how word “independent” is used these days but I still fucks with the idea behind the word, which remains relevant from now until the marketplace gets its past-due clean slate. Until then, our best look as independent musicians is to not just support each other, but to support independent entities–whether it be the local mom’s and pop’s store or a family-owned restaurant to independent films and media to grassroots organizations and your kids’ martial arts classes.
Or, we can keep chasing the big record-deal unicorn.
No. Not with all these incredible new tracks laying around and the opportunity to put out records with a record label without signing a record deal. With a label whose music I grew up on and in a changing marketplace ready for new self-sustaining business models. With financial backers who share the same vision of creative and economic independence. They get it, we get it. And everybody (including, most of all: you, the listener) gets a win.
OOF!
Geo/Prometheus Brown
Blue Scholars
——-
I think it’s great that people are trying something new. Bringing in a non music company like Caffe Vita also seems like a good move. If you are going to form a partnership in turbulent times then choosing a company making a living from coffee (and using your project as a loss leader or marketing hook) is probably a better choice than a partnership with a company trying to monetize the sale of music and related properties.
I am most impressed, however, with the way they spun the press release – “Label signs to artist” is great… There have been other artists who have hired managers as employees or contracted labels to provide certain services but those four words tap a nerve that everyone in music circles is feeling right now. The world as we knew it just a few years ago is indeed upside down. If there is a publicist in the mix for those guys who spun their new release plan this way they should hang on to him or her for dear life.
Original post is here:
http://02cd02a.netsolhost.com/blog/2009/07/blue-scholars-duck-down-caffe-vita/ Duck Down
