A blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.
Posts Tagged ‘online music’
Irish technology website Silicone Republic analyzed how easy access to music online could affect musicians and their relationships with fans. And a new study showed the value of Detroit’s music industry. Also, U.S. copyright industries contributed $1 trillion to the U.S. Gross Domestic Product (GDP) in 2012.
How Will Widespread Internet Music Access Impact Artists?
Technology continues to reshape the way fans listen to music, and, according to Silicone Republic, it also significantly impacts musicians, both financially and creatively.
Head of Spotify for Europe, Benelux, UK and Ireland Adam Williams said he feels that today’s music consumer has finally moved beyond physical formats and is fully invested in the online world that offers them “frictionless music access”: “It’s about being able to access music anywhere – it doesn’t matter where you are, you should be able to do it … They want it on whatever device they have at that particular point in time.”
In March, 2013, Spotify reported it had 24 million active users globally, 6 million of which are paying for its premium monthly subscription service. The money the company is earning from both subscribers and advertising is fast turning this type of streaming music service into a successful business model.
Despite the fact that some artists are starting to report earning decent revenue from Spotify, other musicians continue to lash out against the company for paltry royalties, including Patrick Carney from The Black Keys, Thom Yorke and David Byrne.
But Williams added, by the end of 2013, Spotify will give more than $1 billion back to artists in revenue: “It’s an incredible sum of money.” However, the money will still be filtered through record labels, which will then be responsible for paying it out.
In an industry now more crowded with music than ever before, another issue continues to be important for artists: music discovery. Williams said that at its inception, Spotify was a “virtual jukebox,” giving all the power to users to choose the music they wanted to hear. While it now has features that suggest new music, other platforms like Deezer were built on music discovery from the beginning.
Axel Dauchez, CEO of Deezer explained the importance of discovery for artists and fans: “If you are a smart jukebox and only a smart jukebox, [your users] will end up listening only to what they know … If that’s the case, it will generate a huge amount of revenue to the people already known, but it will totally kill creation financing.”
Deezer introduces its users to what is new using 50 curators from around the world. They make recommendations based on users’ listening history and other information, which the company states helps enable music creation and has helped push its paid subscribers to 5 million.
Of course, musicians now have many online options to help them create, collaborate, promote and distribute their music as well as connect with fans. Eric Wahlforss, co-founder and CTO of SoundCloud said, “[The Internet is] not only a broadcast medium. It’s not read-only; it’s read-write.”
Platforms like SoundCloud allow artists to directly communicate and even collaborate with fans. “They will re-post and re-share whatever it is you’re doing through their own creativity. That’s really where this works the best,” added Wahlforss.
He also expressed his belief that artists need to fully immerse themselves into new technologies in order to see the biggest benefits: “The ones who embrace this and use it to the fullest potential for their art, they’re really the ones who benefit most from this shift that’s going on, from this revolution.”
And for companies like SoundCloud, offering an open forum to foster creativity also involves being “flexible” while still making sure rights holders are protected. Wahlforss concluded, “I’m not a proponent of a completely open laissez-faire attitude … What we’re trying to do is partly move this illegal sharing over to something where the artist actually has control.”
Detroit’s Music Business Valued at Over $1 Billion
A new report compiled by the Anderson Economic Group valued the music industry of Detroit at $1.1 billion, employing over 7,000 people and providing $170 million in earnings to the local economy, said Crain’s Detroit Business. The study is the first of its kind for the city of Detroit and also showed there are 40,000 – 50,000 live music performances annually in the metropolitan area. Some experts feel that findings from the study also suggest that focusing on fostering music business could help the city rebound from bankruptcy.
Alex Risaen, senior Anderson consultant offered a statement: “The Detroit area music industry has a great brand and legacy that spans decades … In the study, we found that our great music tradition not only continues, but directly or indirectly employs over 7,000 and contributes $170 million in worker earnings to the local economy.”
There were 21 Michigan cities analyzed by the study: Detroit; Troy; Novi; Birmingham; Rochester; Milford; Dexter; Ann Arbor; Pontiac; Hamtramck; Ypsilanti; Farmington; Northville; Bloomfield Hills; Dearborn; Royal Oak; Auburn Hills; Ferndale; Plymouth; Chelsea; Belleville.
The study also uncovered a lot of other information about the music scene:
The Detroit metro area houses 486 music businesses and 400 bars, parks, restaurants and other performances spaces.
Colleges and universities in the Detroit metro area have given over 3,000 degrees in music business, theory, composition and performance in the past ten years.
According to 2011 figures, Detroit’s music industry makes up a greater portion of the area’s total employment and payroll compared to cities such as Pittsburgh, Dallas, Indianapolis, Cleveland and Kansas City.
The total industry revenue of $1.15 billion includes record sales and ticket/door revenue from venues.
The average salary for a music industry employee in Detroit is $27,000 per year.
Since 2008, 38 Grammy Award winners and nominees have had some sort of a connection to Detroit.
The typical bar or restaurant venue in Detroit offers three days/nights of live music per week, which adds up to over 25,000 days/nights of live music annually.
There are almost 2,000 indie artists, DJs and groups that perform at bars, lounges and restaurants in the Detroit metro area per year.
U.S. Copyright Industries Contribute $1 Trillion
The U.S. copyright industries pumped $1.01 trillion into the U.S. GDP and accounted for 6.5-percent of the nation’s total economy in 2012, according to a study conducted by the International Intellectual Property Alliance and reported by the Los Angeles Times.
The study looked at the economic effect of U.S. industries involved with the creation and distribution of video games, computer software, books, newspapers, periodicals/journals and motion pictures, music, radio and television shows. 2012 figures are up from $965 billion in 2011 and $885 billion in 2009. Research was released November 19 by the International Intellectual Property Alliance, which is a private entity that represents the Motion Picture Association of America, the Recording Industry Association of America and various other creative groups.
The numbers came from data collected by the Bureau of Economic Analysis and several other government agencies and include compensation paid to workers, plus gross profits of employers.
Steven J. Metalitz, counsel to the IIPA said, “This study represents a milestone … In order to preserve and enhance jobs, exports and economic contributions, it is critical that we have strong legal protections for U.S. creativity and innovation in the U.S. and abroad.”
This is the 14th survey compiled by the IIPA since its formation in 1984. It was founded in order to better protect copyrighted materials and allow them to be distributed throughout the world. The most recent survey comes ahead of a major congressional subcommittee hearing on copyright issues in Washington.
Register of copyrights at the U.S. Copyright Office stated that she supports amendments to federal copyright law. The last major change happened in the late 1990s and did not account for the way technology has changed the way content is brought to consumers since then.
The study also revealed that copyright industries employed almost 5.4 million U.S. workers in 2012 and grew at around 4.7 percent annually from 2009 to 2012, which is more than two times the rate of growth for the entire U.S. economy.
And copyright industries also made up $142 billion in foreign sales and exports last year, more than sectors including aerospace, agriculture, food, pharmaceuticals and medicines. The main drivers were computer software, motion pictures, television and video games. Recorded music, newspapers and books unfortunately saw declines in foreign sales over the same four-year period.
Matt Loeb, international president of the International Alliance of Theatrical Stage Employees remarked, “This report makes it crystal clear that workers in the creative industries make a huge contribution to America’s economy … It also underscores the urgent need to do more to build, strengthen and protect employment in this dynamic part of our nation’s economy.”
Record Store Day 2013 sparked a major rise in vinyl sales. Also, a New York State judge ruled that the 1998 federal Digital Millennium Copyright Act does not fully protect online music-sharing services. And author, entrepreneur and Listen.com/Rhapsody founder Rob Reid announced he will be giving a talk this week to celebrate the release of his comic musical novel Year Zero in paperback.
Record Store Day and the Vinyl Boom
Record Store Day on April 20 caused weekly vinyl album sales in the U.S. for the week ending April 21 to spike considerably, according to Neilsen SoundScan and Billboard.biz.
Retailers sold 244,000 LPs, the largest number vinyl albums sold during one week since Nielsen implemented tracking techniques in1991. The previous record was 213,000, for the week ending December 23 of last year.
Many artists release special vinyl versions of their music for Record Store Day to independent record stores, so a slight increase in sales is expected during this time. Independent music stores sold 544,000 albums across the board the week of 2013 Record Store Day, which is three percent more than the same week in 2012.
Retailers said they credit the jump in sales to the fact that more artists created special releases in celebration of this year’s event than they created last year. Record Store Day co-founder Michael Kurtz admitted, “Record Store Day increased the number of special releases we did this year to over 400 titles, as compared to about 300 last year … This was done mainly to accommodate regional releases and small runs from independently owned labels.”
Billboard charts were also affected by the event. The “Tastemakers Albums chart” ranking the top 25-selling albums at indie retailers included Mumford & Sons’ new EP “Live at Bull Moose.” The Record Store Day exclusive album sold almost a third of the 10,000 total copies manufactured. It also charted on Billboard at 174. Several other debuts – not Record Store Day exclusives – hit the Tastemakers chart, including the Yeah Yeah Yeahs “Mosquito” and the Flaming Lips “The Terror.”
Record Store Day exclusive vinyl singles also hit the 25-position chart, including “No Fun” at No. 1, featuring the Stooges’ original song and a 2002 Black Keys cover, which sold 2,000 copies of the 7,000 produced.
1998 Millennium Copyright Act: No Defense for Online Music
A New York state appeals court ruled on April 23, the 1998 federal Digital Millennium Copyright Act does not cover online music-sharing services from copyright infringement as far as recordings created prior to 1972.
Reuters reported, the Appellate Division, First Department ruled against Grooveshark, sued by Universal Music Group because it allowed users to share recordings created before 1972, including Chuck Berry’s “Johnny B. Goode” and The Temptations’ “My Girl.”
Grooveshark enables users to upload files to its servers in order to share it via streaming with friends. Universal originally filed a suit against the service for copyright infringement in 2010. A decision on the entire lawsuit between the two companies has still not been made.
The court’s decision to not apply the DMCA “safe harbor” provision to these recordings marks a major win for labels, who have often claimed online file-sharing companies are in violation of U.S. Copyright Law. DMCA was designed as an amendment to the Copyright Act and states that all sound recordings made prior to 1972 were not subject to federal copyright law. These recordings are, instead, protected by state or common-law copyright protections.
“Safe harbor” also protects online services as long as they do not know infringement is taking place and immediately remove infringing items from their service. Escape Media, owner of Grooveshark confessed in court that it cannot guarantee every song uploaded is in line with copyright law.
The lawyer for Escape Media Group announced an impending appeal: “The court’s decision, if it stands, will significantly undermine the safe harbor protections of the Digital Millennium Copyright Act and may severely disrupt the operations of all Internet service providers who, like Grooveshark, permit access to user-generated music content.”
Last year, Manhattan Supreme Court Justice Barbara Kapnick did not agree with Universal’s claim last year that the DMCA should not apply to pre-1972 recordings in the case of Grooveshark. Kapnick said she found “no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post-1972 recordings.”
The ruling on Tuesday reversed the original ruling. Justice Angela Mazzarelli stated, “It is clear to us that the DMCA, if interpreted in the manner favored by defendant, would directly violate section 301(c) of the Copyright Act.” She added that the U.S. Copyright Office decided in a 2011 report to members of Congress on extending the Copyright Act, the DMCA is not applicable to pre-1972 recordings and that the DMCA would need to be amended before any different ruling could be made, so Congress could “clarify its intent.”
Grooveshark is also being sued for copyright infringement in Manhattan federal court by Universal, Sony Music Entertainment and Atlantic Recording Corp. together as a group.
Rob Reid Talking about Copyright Law and Year Zero
L.A.-based author, entrepreneur and the founder of Listen.com/Rhapsody Rob Reid’s comic music copyright law-related novel Year Zero is coming out on paperback. In celebration, he will be giving a talk at 6 p.m. on April 30, 2012 in New York City at the NYU School of Law based largely on his now-infamous “Copyright Math” TED conference talk in 2012. Reid will be taking a unique look at the institution of copyright law and signing his book. He will also be joined by David Pashman (General Counsel, Meetup and adjunct professor at NYU Law).
“Copyright Math” is the term Reid uses to explain the often confusing and intangible numbers cited by the two major organizations within the entertainment industry – the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) – in an effort to get others to rally against piracy. Reid has written pieces and features for various magazines and websites, including Wired and The Wall Street Journal. His first novel, Year Zero is closely tied to the “Copyright Math” theory and was released on July 10, 2012 via Random House/Del Rey. It is a comedic science fiction story set mainly in present-day New York City about a society of highly-advanced aliens who are so enamored of American pop music that they accidentally commit the biggest copyright infraction of all time, thereby bankrupting the entire universe.
More about Rob Reid and his thoughts on copyright law can be found in his Musician Coaching interviews from last summer: “How to Connect with an Audience” and “Effects of Music Piracy on the New Music Industry.”
Last week, the past, present and future of online music sales were front and center as a new study showed that the music industry may at long last be learning how to manage digital sales, and Digital Music News updated its artist earnings infographic to express how independent and major label artists are faring in the current climate. Also, DIY Music released a new social commerce app to help artists and labels make more money through social media channels.
Music Industry Finally Embracing Online Music
The music industry may be finally figuring out how to make money on the Internet, according a recent study conducted by accounting firm Price Waterhouse Coopers’ (PwC). The Entertainment and Media Outlook revealed that feelings about digital music within major organizations that have been resisting the transition from old business models have finally started to change.
The Outlook analyzes the current climate and predicts what could happen in the entertainment industry through 2016. It is used by thousands of media, technology and communications executives as well as by professionals within the financial services sectors and advertisers in order to inform the steps they will take in the business during the next four years.
The research offered some major findings. According to Marcel Fenez, Global leader, Entertainment and Media, the industry has finally arrived at the “end of the digital beginning.” Companies will finally start to restructure to prepare for what is “the new normal.” The Outlook looks at challenges the music industry will face when digital is just part of “business-as-usual” and in many cases the core of entire companies. Those who are successful within the industry will reshape businesses around three ideas: an understanding of the “connected” customer through analytics while paying close attention to privacy concerns; creating new business models in order to provide more value to the customer and created more targeted advertising strategies; re-designing new organizational models and building partnerships that will help create revenue from the fact that consumers are now living and breathing online.
The Entertainment and Media Outlook also explores how copyright issues and piracy will continue to shake out in the coming years. But the study predicts that despite the need to overcome some of these obstacles, innovation will continue in the music space, and talent will become an important factor in success for musicians as well as technologists and other music business professionals. And more companies will continue to embrace – with greater confidence – that the way forward is by accepting the Digital Age.
Digital Music News Infographic Bringing Good News to DIY Artists
Digital Music News updated its 2010 infographic “How Much Do Music Artists Earn Online?” this past week to reflect data from 2012. And the news for major label artists is, not surprisingly, bleak for major label artists, who are still having a hard time making a living from many of the digital music channels. And record labels’ income is continuing to dwindle even more, even as digital sales increase. However, for DIY and indie artists, the opposite is true, as streaming payouts are steadily rising, on a percentage level, according to sales information shared by indie labels and bands who participated in the research process.
An analysis by industry attorney Steve Gordon further delved into major label artists’ lack of income from Spotify and determined that most of them do not get a cent from their Spotify streams, save rare superstars like Lady Gaga. The reason is that most artists signed to major labels are “urecouped” and owe their labels money. Because of the high production costs labels pay to get products into the marketplace, only huge artists who can sell millions of records get rid of their “unrecouped” status. So, it is not that Spotify is not paying – it is that the money earned is being used to repay debt to labels.
The infographic also showed that ringtones and download payouts have been particularly low for label-owned artists. Yet vinyl seems to be surprisingly lucrative for artists across the board if they are able to set a fair price that also takes into account production costs.
The last infographic was released in 2010, nearly two-and-a-half years ago. Like its predecessor, the 2012 infographic contrasts payouts from older products like CDs and iTunes downloads with streaming formats such as Spotify.
DIY Music Helping Artists Monetize Social Media
DIY Music released their new and improved social commerce platform geared towards musicians and record labels this past week, according to a release posted by MarketWatch. DIY Music, first launched in 2006, now gives artists the ability to build their fan base and sell products and interactive experiences online.
Using the platform, fans can listen to music, share videos and also buy music directly from a Facebook post, tweet or online ad. And artists can build highly-advanced social media storefront campaigns, search for new fans through an advanced filter and sell their music simultaneously.
The platform is compatible with Facebook’s Timeline and News Feed, Twitter, Tumblr and many other blog formats, which allows artists to reach and monetize fans through many different channels and also gives the fans the ability to share the experiences they encounter with friends without getting buried in redirects.
David Robb, CEO of DIY Media, the parent company, stated, “Our platform improves the bond between artist and fan. Bands and artists are able to give their fans a rich media experience and in turn collect clear analytics. The result is a more direct path to building a fan base and the increased capability to convert fans into buyers.”
DIY music allows artists to promote and sell songs, albums and entire catalogs through one campaign, increase engagement by directly embedding video and audio into a campaign, exchange email addresses for their mailing lists for free downloads of tracks or albums, and get important stats and analytics through the DIY dashboard to help improve future campaigns.
DIY Music is currently partnered with SoundCloud, The Orchard IRIS, BFM Digital, Audiosocket and a large array of indie artists.
Napster officially called it quits and folded into Rhapsody last week. Also, in the wake of the EMI sale, experts discussed whether or not the music industry will never reach a point where one major label controls it. And finally, several analysts and legislators explored the complexities of SOPA legislation.
Napster and Rhapsody Merger Finalized
Napster had its last day on November 30. As of December 1, it officially merged with the #1 American on-demand music service Rhapsody, a month after the company finally bought the digital music company from Best Buy.
Of course, Napster has been a controversy in the music industry since its launch in 1999 as a peer-to-peer file-sharing service designed to help users swap music files. It only lived in its original incantation for two years before it was shut down by court order. Music industry trade groups including the Recording Industry Association of America filed hundreds of lawsuits against its users for copyright infringement and illegal downloading.
While it has been over 10 years since the original Napster ceased to exist, what many in the music business have called “the Napster effect” has profoundly shaped the way the digital music space has evolved. The company’s model brought to light a major supply-and-demand problem: Consumers did not want to pay $20 for an entire CD when all they wanted was a few songs off that CD. They also wanted a simple and inexpensive way to get digital tracks. The death of Napster brought about the birth of services like iTunes, Rhapsody and others that would follow.
Rhapsody was founded in 2001, and currently allows its users to download unlimited songs for $10 per month. It has 800,000 subscribers.
Financial terms of the Napster/Rhapsody merger were not released.
Will One Corporation Ever Control the Music Business?
The answer is “not entirely,” according to many entertainment industry experts. Many in the music business have been concerned about an impending monopoly by major record labels ever since EMI was put up for public auction and sold to Universal Music Group (UMG), who bought the record label component, and Sony/ATV, who purchased its publishing division.
Professor Nick Baxter-Moore of Brock University in Ontario, Canada said, “… It might be argued that one reason why EMI wasn’t sold as a whole to either [Sony/ATV or UMG] was to avoid regulatory obstacles being thrown up to block the sale.”
Still, the purchase of EMI has brought the number of major record labels down from four, to three: UMG; Sony/ATV; Warner Music Group. What were referred to as the “Big 5” became the “Big 4” in 2004 with Sony’s acquisition of BMG. The reduction to three has had many seeing the possibility of a recorded music monopoly in the near future.
However, Baxter-Moore and others feel that, while many are declaring the downfall of the music industry, it will never get to a point where any one major corporation has control: “We might get to a point whereby two corporations exercise a duopoly – a situation in which two major firms control the majority of the output of a given industry – that would arise if, or rather when, either Universal, or, more probably, Sony acquires Warner Music Group.”
He also believes that the strength of indie labels means they will never fully go away and allow for a single label to control output: “We might see a recording industry in which Universal and Sony and their many and respective subsidiaries control about 70-75 percent of the market (as long as neither one controls, by itself, 50 percent) and with national, regional and indie labels accounting for the other 25 percent.
While major labels are being purchased for huge figures, independents have slowly been brought into the spotlight in recent years, almost to a level of being competitors of the bigger labels. For example, Arcade Fire’s album The Suburbs, released on Merge, was one of the top-selling albums of 2010, and Adele’s 21, attached to XL was by far the most popular. Both these indie labels have been around for almost 20 years and have adopted business models similar to the majors because they release some music they feel will be more widely popular so that they can fund the release of records from emerging or fringe artists.
As Baxter-Moore asserts, while monopoly may not be inevitable, the EMI purchase could still cause some complications for artists and industry professionals: “Corporate concentration is bad for any industry … The sale of EMI, whether in one piece or two, contributes to further concentration of the music industry … History tells us this is bad news for musicians, for the music product, and for audiences and fans.”
The Stop Online Piracy Act (SOPA) Legislation: It’s Getting Complicated
Critics within congress of the Stop Online Piracy Act (SOPA) officially introduced a “legislative framework” for an alternative bill that they hoped would address some of the concerns many have had about the legislation on December 2. Their proposal was to update U.S. trade laws to implicate that downloading protected content – like a song, album or a movie – from a foreign-owned website would be treated the same as illegally importing foreign hard goods.
SOPA has caused some controversy since it was introduced. Critics have complained the bill directly attacks the freedom of online speech and hinders technological innovation. But proponents claim it is a necessary solution to the huge and growing problem of online piracy, citing stats that show that forty billion music files were shared illegally in 2008 – 95 percent of all music downloads worldwide – and that three-quarters of the video games released in late 2010 and 2011 were acquired illegally.
According to a recent editorial in The New York Times, “Musicians, moviemakers, authors and software designers are not the only victims. Piracy’s cost is measured in less innovation and less economic activity, as creators lose hope of making a living from their creations.” Still, the editorial stressed that legislation needs to be “tightened,” and that infringement as defined by SOPA is too broad and could actually cause some domestic websites that are not breaking any laws to be shut down unjustly.
Under the bill, copyright owners could tell direct payment providers like Visa or advertising networks like Google to shut down a website by filing a notice that the site or even just “a portion” of it “engages in, enables or facilitates” intellectual property infringement, or is ignoring this infringement on purpose. Once accused, websites would have five days to prove innocence. And companies like Google and Visa would be immune to being sued by websites that were cut off wrongfully. So, technically, copyright owners could prevent a website from earning money with one accusation. Provisions could affect websites that are already protected by the 1998 Digital Millennium Copyright Act, which protects U.S. sites with massive amounts of under-controlled like YouTube as long as they take down copyright-infringing material when it is brought to their attention.
The SOPA legislation – as well as similar legislation in other countries like Belgium, Italy and Finland that is already being enforced – was largely inspired by the need to stop foreign, “rogue” websites like the Pirate Bay in Sweden, a bit torrent site that has already been coming up with workarounds to allow it to continue to provide illegal content to its users. According to Torrent Freak, “The Pirate Bay Dancing” add-on has already been created by a group of coders called “MAFIAAFire” in order to redirect Pirate Bay and other bit torrent websites to new domains so if their domains are seized by regulators, their content has new homes. Undoubtedly, regardless of which shape new legislation takes, these types of workarounds will be inevitable.
The newly-shaped bill introduced in Congress on December 2 was designed to address many of the concerns about free speech and commerce. U.S. Senators and Representatives who worked on the new framework said they believe that creating a “21st century trade policy” will help prevent infringement while “ensuring the continued free flow of legitimate commerce and speech.” The revised bill would make it possible for a U.S. copyright holder to petition the International Trade Commission to investigate digital imports. That organization would then decide whether the company was violating intellectual property rights. According to these legislators, getting behind the trade laws helps them stay away from the “pitfalls” inherent in the original SOPA, which they claim gives the government too much power to control the internet based on little more than suspicion, does not provide clear definitions for the justification of shutting down an entire site and hinders the openness and innovation that drives the Internet.
In an official joint statement, the group of Representatives and Senators who came up with the new framework said, “By putting the regulatory power in the hands of the International Trade Commission – versus a diversity of magistrate judges not versed in Internet and trade policy – we will ensure a transparent process in which import policy is fairly and consistently applied and all interests are taken into account …When infringement is addressed only from a narrow judicial perspective, important issues pertaining to cybersecurity and the promotion of online innovation, commerce and speech get neglected.”
Scott Ambrose Reilly is the head of U.S. expansion at X5 Music Group, a Stockholm-based non-traditional music label that licenses the catalogs of approximately 50 other companies and repackages the recordings into compilations designed for the digital space. Scott got his start in the industry as a fan and spent years following his favorite artists, particularly Mojo Nixon, as they went on tour. In the late ‘80s, he was hired as Nixon’s road manager, eventually moving onto manage him and many other artists throughout the ‘90s. Through his management duties of jam band God Street Wine, he became an early adopter of the online music movement and was responsible for one of the first band websites as well as one of the first online ticketing systems in the mid ‘90s. His work in the digital space eventually led Amazon to hire him to oversee the launch of its MP3 service. Under his leadership, the company was the first to launch all four major labels in MP3 format, leading to the end of DRM. While at Amazon, he oversaw content acquisition, label relations and global operations for Amazon MP3 worldwide, building a catalog of more than 15 million tracks.
Scott recently spoke to me about the evolution of digital music, the experience of building an all-digital music label. He also delivered some advice for artists that want to successfully market themselves digitally.
Thanks so much for taking some time to talk to me, Scott. How did you get started in the music industry?
I started in the business – as many people do – as a fan. If you’re in the music industry, either there was a particular artist that drew you in or you were a musician. I think it would be hard to fall into this business any other way.
In the late ‘80s, I found myself following around Mojo Nixon wherever he played. Then all of a sudden he needed someone to go on the road with him as his career started to take off. Since I was already at all his dates, and even the ones out of town, driving and helping load up the truck just because I wanted to be there, he figured he could con me into the position of going out as road manager and splitting a share of the proceeds at the end of each tour. And that’s what we did for a number of years. I remember the first tour was six-weeks long, and I came home with $400 for the six weeks; I thought it was the greatest thing ever.
From there, I became his manager and started managing other artists. I spent ten years managing artists through the ‘90s. The fortunate thing there is, to this day I still manage Mojo. Because he touches so many different things – radio, television, acting – it gave me great experience there. Then, I was lucky enough to manage a band called God Street Wine in the ‘90s. It was very much on the cutting edge of internet promotion and technology, mainly because of their age and where they went to school. But also, they had a fan who was a college student and was at the cutting edge of a lot of different technologies. He spent all his free time helping the band. So, we were doing internet promotions before the World Wide Web, selling tickets online and doing IRC chats backstage. We launched a website in 1994, which may have been the first band website. Without even realizing how big all this was going to be, I got to see a lot of different parts of the process that was coming up.
When I realized after ten years of full-time management that it wasn’t the right path for me, luckily I had lots of experience to translate to the digital music space.
That’s why I knew your name. I remember doing research at Lava/Atlantic under Jason Flom and trying to find out who this God Street Wine was and what they were doing with the internet.
Yes. And I had met Jason a couple times. His wife went to college with the drummer, I think. And Dan Pifer, the bass player ended up going onto become the COO of Orchard and then the COO of Rightsflow.
One of the things I wanted to do in moving from a large, stable company like Amazon to a smaller innovative company like X5 is build the strongest possible team, because I know how important that is. So, I brought Dan Pifer on board. And Griff Morris from Amazon is our chief content officer. I felt that if I was going to do this and do it right, I needed to have the two smartest, hardest-working guys in the field alongside me. Dan came on shortly after I did. And the three of us are the U.S. office of X5 Music.
How did your other experiences lead you to XM, and what is the function of the U.S. office?
Amazon was a great experience. There, we basically launched a DRM-free service with all the content and finally putting an end to the inoperability of digital music.
I almost feel like saying, “Thank you” for that.
Yeah. It was part of the fun and part of the challenge. And it’s amazing how emotional that decision was for a lot of people in the music business. It seems like a pretty minor blip now in hindsight. It was great to launch that in the U.S. and in the UK, Germany, France and Japan.
X5 was one of our best vendors – this little label out of Stockholm that we hadn’t heard of, as quick, smart and flexible as any we’d seen. When we did a promotion with them, and it worked, they said, “How can we do more of these?” And they would create products within weeks for the store. I started to realize that this idea of a digital-only label that’s creating products specifically for the digital market and specifically to have mainstream appeal in the digital market had a lot of power. What the three founders in Stockholm built is very exciting. And their vision for the future is very exciting. It’s been a lot of fun, and it’s been a smart choice for me to make that jump. And the main business is licensing entire, complete catalogs from labels with rights to make compilations from those catalogs. And there’s a lot of research, science and technical stuff that goes into creating the compilations, to make them products that we can get surfaced in digital music stores – surfaced by responding well to search, by different marketing techniques we can do, by a concept that will appeal to editors of that particular store. Then, once its surfaced, we hope we’ve created an album cover and a name that’s very compelling and lets people know what it is and compels them to click on it. If you can surface it through marketing and winning the search, then you can with the click. And if you can win the click, you can have albums that stay on the Billboard Top 10 classical chart for ten years, which we’ve done.
I was just explaining to somebody the other day that I feel like this has been such an open playing field. I just don’t feel that there have always been enough products rising to the top, due to conventional SEO techniques or because they represent music for a dedicated purpose. I have been of the belief that you can create customized products that will be tailor-made to being in the stream of search. On the most macro level, that means going into the Google keyword tool and saying, “How many people are searching for music for yoga, music for meditation, or music in a certain style?” At a certain point, when you would go and see the search results for the top-ten keywords, there wasn’t necessarily a strong batch of competitors. And you still find a bunch of people squatting on domain names that have been there for a while.
Yes. And people do spend time, money and effort studying how Google and SEO work. But I don’t know of a single company outside of X5 who looks at how that works in the iTunes Store and in the Amazon Store.
And how does that work?
The only way to optimize for search in those stores is to create products that optimize for the search in those stores. That’s a pretty radical idea and approach. We’re creating products so that if someone types in a certain phrase, they will be the top products that pop up.
Sadly, it’s very radical in the music space. The music space is just finally growing up. Because a company like Crest might spend a million dollars determining whether or not you and I want white or off-white on our toothpaste box. Meanwhile, the music business has spent a million dollars on a video without even knowing whether there’s a market for it. So, it seems like you guys just finally got smart about it.
Yeah. It’s easier when you don’t have a physical product and a legacy business. And it’s easier when you’re dealing with mainly catalog and not new release. So, if you’re a digital-only company focused on catalog, there’s not something else out there like that. When labels try to do this themselves, first of all, there’s a lot of marketing dollars and creative energy to spend on the back catalog, which isn’t necessarily where labels should spend their creative and financial energy. And if they’re successful, they’ll become known as a back-catalog label. Labels should spend their money and creative energy on new releases. But once those new releases are a few years old, it’s hard to find a way to market them through digital services. What we do is find a way to rise tracks, artists and concepts up to the surface in a way that it is fulfilling a customer need for people that aren’t very familiar with a particular genre.
For example, if you met a girl at a party last night, and she said she was really into World Music, so you want to get some World Music downloaded onto your computer for a playlist, and you type in “world music” at one of the music stores, it’s not going to help you. It’s going to give you Italian drinking songs, Justin Bieber albums, Glee albums, etc. And if you look at the charts, it doesn’t get much better, because you’ll find Canadian folk singers on the World Music charts.
Your vantage point is unique, as someone that has had experience growing this company, has witnessed the digital music revolution firsthand and has of course worked at Amazon. Do you have any tips on techniques for artists to make their artwork, marketing, meta data creation, etc. successful?
It’s an easier thing to describe when it’s catalog based. Obviously if you were going to create an album of 20 great Italian love songs today – specifically for the digital market – you’d be foolish to call it Amore as opposed to 20 Great Italian Love Songs. As much as you wish you could call it Amore, people aren’t going to find it. And even if they find it, they’re not going to know what it is. But if it’s 20 Great Italian Love Songs, they’ll at least know what it is from the title. And hopefully, your cover says, “quality” to them.
We’ve tried this approach two times now with new releases. We commissioned the London Philharmonic Orchestra to record the 50 greatest classical music pieces of all time. We did a lot of research on which were the most popular classical music pieces from history based on rankings and streaming and download, etc. And it’s called The 50 Greatest Classical Music Pieces in History. And it has a cover that says, “London,” “classical” and catches your eye. It’s done incredibly well for us. It’s been a top seller at both iTunes and Amazon for two years now.
And we’re doing a second one that comes out in two weeks that’s the London Philharmonic again, and it’s titled The Greatest Video Game Music. It’s really catching fire, because it’s the concept, tied with the cover, tied with quality – because the London Philharmonic is one of the greatest orchestras in the world.
Because you had to do so much research on products like that, you must’ve learned a lot about what works and what doesn’t work for artwork, and that really applies to new artists. What have you found about artwork?
How it looks as the 12” collector vinyl is irrelevant. Whether you wish it were the case or not, the artwork is going to be a thumbnail and has to be compelling in that format. What’s amazing is that we’ve discovered that things that are compelling as a thumbnail are also compelling as a 12” collector vinyl cover or a poster. The other way around doesn’t work.
The real message you learn when you work at Amazon – because you can’t have a meeting where this doesn’t come up – is “How does this affect the customer?” What’s the customer point of view and what’s the customer experience? And this is important in digital music.
Also, the recording process is phenomenal. It’s probably my favorite thing in the whole music business – being around when a record is being made. I was fortunate enough before I worked at X5 to be in London when the London Philharmonic was recording the 50 Greatest. It was just fun to be there for a couple hours. But listening to it in the speakers and getting excited about the big artwork is not where the customers are nowadays. As an artist, you have to think about where these customers are listening to their music, purchasing their music and experiencing their music. And you have to think about what that interface looks like and sounds like.
I remember when we first started doing online MP3s in the mid-‘90s with God Street Wine. Nobody was happy with the quality. They would say, “This doesn’t sound as good as a CD.” And I really thought that was going to impeded the growth of the digital download. I thought the quality was going to have to get better. But that turned out not to be the case; people wanted convenience more, which was a big eye opener. In the digital space, convenience is a huge quality component for people.
There are a lot of people who wish the world were still vinyl: The artwork was phenomenal and the sound was different.
Well, and it’s really hard to roll a joint on an MP3.
Yes. It is. But I think we gave up that whole fight with the CD. I don’t get any tactile pleasure from a CD. Just accept the reality that this is how people are listening to music. If you wish people were sitting and looking at the liner notes while they listen to the music instead of streaming it as they’re walking down the street, you have to remember that you don’t get to make that choice for your fans. You’re not going to convince somebody to go buy a CD if that person gets all music digitally as downloads. You’re not going to convince people to download your album if they do all their listening through Spotify. You’re not going to change that customer behavior.
So, what can artists do to make themselves successful other than put themselves in the customer mindset?
I don’t think the path is any different. I think the definition of “success” has evolved. The path is, to just do as much hard work as you can possibly do. I recently came across the ledger book from 1987 on the road with Mojo Nixon. The number of $50 gigs that were being played was amazing. Looking at this book 20 years later, you’d say, “That’s insane. How could that possibly ever amount to anything?” There would be a $50 dates in Bloomington Indiana. And then you’d see an $800 gig shortly after that and think, “Wow, something’s going on here.” Mojo Nixon worked hard for no money, because he had no choice. Music was what he was going to do.
And that’s all you can do as an artist. You can’t catch your lucky breaks by never taking any chances or by being so concerned about protecting all your rights. You can catch your lucky breaks by saying, “This is what I’m going to do, and I don’t care. I’m going to buck all the trends.” Your chances are less, but you can. And you better be genius. You have to be a world-shaking genius of the Elvis/Beatles variety, and you have to be at the right place at the right time – because you can take any brilliant artist in a time period three or four years earlier or later, and it doesn’t happen for them.
If you’re world-shaking genius, just do your own thing. Don’t worry about the album cover. There were a small number of bands that were very successful during the MTV years without making videos. There are always those that buck the trend. But there’s also the belief that you can grow slowly, build your career just a little bit at a time and be smart and try to make a living doing it.
So, what’s happening next at X5?
The main thing that ties back into the concepts we’ve been talking about is this new release of The Greatest Video Game Music. The record was finished September 23. Within weeks, we realized we had something special. It came from us taking the science that X5 has done so brilliantly in Sweden with concept, design, naming and packaging, the A&R concept of getting the right song and finding the right artist to make it. We took that science and laid it on this product that people have a lot of passion for. And there’s a certain science to the packaging in digital. But there better be real art and passion that sits underneath it if you want to hold people’s attention.
We feel this project is so special that we are going to put it out physically, having never put out a physical release as a digital-only label. It’s not easy to put out your first physical title. And it’s certainly not easy to put it out during the fourth quarter when you’ve missed every possible deadline for the Christmas holidays.
Oh, I empathize.
It shows all signs of doing something special when it comes out in a couple weeks. But it’s taking a lot of hard work to take this potential and turn it into something real. And of course, we have no way of knowing if it’s going to be as special as we think it is going to be. And we think it’s going to sell. It’s already getting a lot of press, attention and pre-orders.
When you create that product that has that potential, you better start working really hard. I don’t know that I’ve worked harder on a release even when I managed bands than I have on this one in the last five weeks. And it wouldn’t have had a chance of seeing the light of day if all of us in the U.S. and in Sweden weren’t working this hard on it.
So, it’s still true in the Digital Age that a “hit” just feels different.
Yeah. People are drawn to it.
Doors that weren’t there suddenly open, and it feels fundamentally different. I was lucky enough to be standing at least close enough to a hit to appreciate that.
The snowball starts to roll. This wouldn’t be a “hit” by the definition of what a “hit” would’ve been when you were working at Lava. But it’s different for every artist. For example, with Mojo Nixon, you knew “Elvis is Everywhere” was changing his life. That alone wouldn’t have done it. The hard work he laid on top of it was why it succeeded.
A hit opens doors to the next level. But you better work really hard to get through those doors. And then you better earn your keep once you’re there.
To learn more about Scott Ambrose Reilly and to get details about the release of The Greatest Video Game Music, performed by the London Philharmonic Orchestra, visit the X5 website. You can also pre-order the compilation on Amazon.
George White is General Manager of Billboard Digital. With nearly two decades of experience in the music and digital media industries, he has worked for major record labels such as Atlantic Records and the CD-ROM industry pioneer The Voyager Company, where he developed enhanced CDs, CD-ROMS, DVDs and games as well as some of the first artist websites in the 1990s. He has worked with artists including Laurie Anderson, Hootie & the Blowfish, T.I. and Led Zeppelin. Just prior to joining the Billboard Digital team, he worked for Warner Music Group, where he was Senior Vice President, Strategy & Product Development and headed up development of Warner’s digital mobile products to develop new ways of delivering music. He is also the co-founder of the major digital media package standard-setting organization Connected Media Experience (CME).
I had the opportunity to sit down with George and talk to him about how he found his way to music industry, the history and future of internet music, and some new initiatives Billboard is taking to nurture the careers of new and emerging artists.
Thanks for talking to me today, George. How did you get your start in the music business?
I had eliminated a number of career paths when I was at Davidson College primarily by trying some different things out. I started off thinking I wanted to work on Wall Street and also considered being an attorney, but ultimately decided neither were exactly the direction that I wanted to go. I took a year after college and taught in the western province of Kenya and did some thinking about the direction I wanted to take and what I wanted to focus on. Music had always been something that took up a lot of my leisure time. I had worked at the college union and had done a lot of recording and live sound. I played guitar, but not very well, and had some friends who were trying to make a go of it as a band in Durham, North Carolina. So when I got back from Kenya, I decided I was really going to make music a focus and really try to work with my friends’ fledgling band, the Iotas, with the goal of learning how to be a band manager and learning how to help bands, but also learning the business of touring and recording, which they were doing a lot of, just to see if there was a niche in the music industry that I could explore.
While I was working with them, I met a band called The Veldt, who had been signed by Capitol Records, dropped by Capitol, and then resigned by Mercury Records on the Stardog imprint. In between their being dropped and re-signed, I had read a piece about them in Rolling Stone that said this great band was basically hanging around and having a hard time getting gigs. So I called them up and asked if they would let my band open up for them if I got them some gigs. They said, “Yes,” and I proceeded to book a few shows locally. The band recommended me to Mercury Records for a summer internship in the A&R department there in 1992, which was how I got my first gig in the music industry. I got to understand a little bit about how the A&R process worked and organize their tape collection.
I took some additional classes in North Carolina to get credit for the internship and learned a little bit more about recording from some guys at Reflection Studios down there. I also worked in receiving at Barnes & Noble, so I got to know the ordering process very well. I moved back to New York trying to look for other work in A&R. Through my interest in recording, I got more and more savvy about computers and how they were used and learned of a Santa Monica-based company called Voyager, which had just started publishing CD-ROMs with music-related content. I sent my resume there and eventually got an interview. Funnily enough, Michael Nash who is now the Executive Vice President of Strategy and Development at Warner was actually at Voyager at that time. Michael had been working with the Residents at the time to do a CD-ROM project called Freak Show that Voyager published. It ended up that Michael actually did that first Residents title and then split off to form his own CD-ROM publisher.
In New York, I also worked on the floor and was managing the fiction section at the Barnes & Noble on the Upper East Side. I knew inside and out at this point how Barnes & Noble ordered and merchandised books. Voyager at the time was trying to figure out a way to sell its CD-ROMs in bookstores. Because of my experience, they hired me to run a pilot project with Apple, where they put a computer and CD-ROM titles in eight bookstores across the country, two of which were in New York and the others were some bigger independent bookstores scattered throughout the country. It was a very successful project that got attention for CD-ROMs in bookstores. I ended up being hired full time after the pilot project by Voyager as the Director of Retail Sales and Marketing there, and was specifically focused on the book channel and getting CD-ROMs in as books. Voyager had a number of great music titles. In addition to that Residents title they had The Beatles’ Hard Day’s Night on CD-ROM and went onto do a Spinal Tap CD-ROM. We also worked with Laurie Anderson on a CD-ROM project called Puppet Motel. And we sponsored Laurie’s 1995 tour in conjunction with publishing that CD-ROM, so I got to work very closely with her and went on the entire European leg of the Nerve Bible tour.
I started to work on web projects as the internet began to push CD-ROMs aside in 1995 as a really viable way to experience multi-media. I worked on a companion site to the Nerve Bible tour called The Green Room, which was one of the very first music tour companions on the web. We did some webcam video of Brian Eno backstage in Dublin and uploaded it. Voyager also had an interesting product called CDLink, which allowed you to click on a link on a webpage and play an audio CD that was in your CD-ROM drive. But in 1995, the quality of the audio with the newly-debuted RealAudio was not good, and it was kind of painful to listen to music, so multi-media experiences were few and far between on the web. With CDLink, you basically authored a webpage – it could be an online enhancement of the CD. And anyone with that CD could come on that webpage and get it. We worked with journalists to write pieces about music. We did a number of showcase pieces using the technology, and I tried to call folks at the various New York-based major labels to pitch the product. But they couldn’t figure out why in the world they would actually want to produce web pages for products they’d already sold to their customer base.
I was ultimately rewarded when the people at Atlantic Records – to whom I had pitched the idea – were so impressed with either how crazy I was or the amount of gumption that I had to actually ask for a licensing fee for this nefarious technology that when an opening came there to run the technology for their fledgling new media department, they asked me to come and join there as an Associate Director. I stayed at Atlantic and the Warner Music Group for about 13 years, until the end of 2009.
We’re certainly going to circle around to what your position is at Billboard. But you were really one of a dozen people on the planet – or at least in the States – who had a real say-so and was a real gatekeeper into the way that a major music content company was liaising with technology. You must’ve seen so much. Is there any lesson to be gleaned about the way that’s all headed? Obviously it’s a lot more complicated when you’re in the middle of it, but what is going on with evolving technology and music at this point?
I guess the lesson I would draw and that I would then apply to the state of the industry today is that you should really not worry as much as perhaps people are and have been worrying about displacing your sacred cows. If something is really going to destroy the business you already have, it will do it with or without your complicity.
During the first four years of my time at Atlantic, the company was very bold and experimental with doing tons of promotional stuff. The label would really invest quite a lot in doing things that would create more awareness, interest and engagement with fans in the interest of getting folks to go out and buy a CD. In the early days, however, there was a great deal of reticence about licensing digitally, particularly the unbundling of CDs and the ability to buy individual tracks. Despite the fact that by the end of the decade Napster was there, and people could download a single track readily, there was still a lot of hand wringing, which would result in three more years before there was a significant licensed service in the iTunes service. If you remember when iTunes was originally licensed and the licensing discussions began, that was a Mac-only service. It made it a good place to experiment because there was little risk: There weren’t many people with Macs and there were even fewer people that had an iPod and a Mac. Of course, by the time the service launched, they had begun to sell iPods that were compatible with PCs and were shipping iTunes for the PC.
It’s amazing to think how differently things might have come about had we been really pushed to aggressively license and develop services very early on. The first people approached us for licenses in 1997-1998. And had those services been licensed aggressively, and had there been a lot of experimentation, there might be quite a few players in the digital download marketplace today. I tend to think – although Apple has done an incredible job – that having quite a few solid players that had been out there for a long time would have been a very healthy thing and probably would’ve resulted in a lot more early experimentation. The direct application to today’s marketplace would be looking at ad-supported free streaming services as a way to really sell subscription services, and the embrace by the industry of an online streaming product instead of a promotional vehicle.
As someone who has been closely involved in the process of developing internet music technology, do you think something like Spotify possible? Do you think it’s headed towards non-ownership streaming music in the cloud? Every time I turn around, it seems like there are giant fatal flaws in these cloud services that are coming out.
I think ultimately, the consumers will decide. And I think there’s a lot that points to the cloud models. But there is going to have to be a lot more innovation and focus by labels and the creative side in general on what it means to release your music into the cloud. There are clearly lots of problems with the cloud, one of which is the question, “Are individual artists going to be able to be successfully compensated?” And the answer may be, “No.” But it doesn’t mean that services will not get created and will not exist. There are problems to be solved. But I don’t think the problems are going to get solved by not offering services that clearly, from the results of Spotify’s research in the markets where it is licensed for free, are in demand. You don’t see an absolute collapse of physical sales in those markets. I think it’s important to look at those lessons, experiment and really work to develop compelling services and then work on fixing the problems with the services.
What was your role at Warner, and what did you notice about the direction of music on the internet when you were working on projects there?
I really focused on developing new products. At the time I left, we were really looking at the locker models and the streaming subscription models. I was working on a project called The Connected Music Experience (CME). It is an interesting idea in that it’s a package format for digital media that allows you to basically have a cloud component that is related to any piece of media you own. Let’s say you want a single from the new Lady Gaga record. After you download it, you get the track and some associated content that looks very much like what an iTunes LP looks like today. There’s a menu, a way to represent lyrics and liner notes. Basically, it’s a way to communicate to the person who has downloaded that track where it came from, who made it, and then for the artist to the have an on-going connection to the person that downloaded it. It is agnostic as to whether that happens in a purchase environment (someone just purchases that track in iTunes) or downloads it through a service like Spotify. The service you use doesn’t particularly matter. Any of those services can take the assets that are associated with that release in the cloud and create a compelling experience for legitimate users. But it is an interesting way to reward people who have acquired the music legitimately. If you got that same track as part of a download of the most popular tracks this month on a bit torrent site somewhere, you would actually have to go out and find all the associated content from some other place, and then you would have to continuously keep track of new content as it is released.
There are some initiatives like CME that are underway that would create much more compelling experiences out of cloud-based initiatives. They could use a lot more investment, both on the creative side and on the business side. Artists, record companies and publishers alike would do well to look at embracing new models and figuring out how to make them more compelling to consumers, because that’s going to be the way to drive that marketplace forward.
The position of General Manager of Billboard Digital sounds extremely fun. I’ve watched the magazine become more and more online based. And in the past few years especially, I’ve watched Billboard’s online presence escalate exponentially. What does your position there entail?
The big project that I was brought on board for is something called Billboard Pro, which is a subscription service for artists. It combines a couple different things. One is what Billboard is traditionally known for, which is great editorial – great writing and access to information from the most important people in the industry. But Billboard Pro is geared specifically towards new and emerging artists, artists who may not be subscribing to Billboard Magazine today. There is information specifically for those artists about which new services are out there, what they should be investing in to grow their careers, etc. There is a piece that a lot of artists have liked and that has been a major driver of traffic for us from Amy Klein of Titus Andronicus on how to develop your stage presence. The idea for Billboard Pro is to be a version of the Wall Street Journal for artists. If you’re an artist trying to drive your career forward, we want it to be the first thing you sit down to in the morning to see what’s going on in the industry.
The second part of Billboard Pro is a dashboard that allows you to see where you are with fan engagement as an artist. You can track all your page views, plays and new fans on any of 16 different services across the web, plus you can get SoundScan sales data for an album and a few tracks. You can also get alerts if a song of yours happens to have been played on any U.S. radio station for the first time or the tenth time. And you can see if you’ve been mentioned by anyone on Twitter or by any blog out there. Basically, it’s a very simple one-stop dashboard to see where you are with online engagement, which is a new product for Billboard. Obviously, as the music industry is evolving and artists themselves are becoming key economic decision makers rather than labels, publishers, managers and agents, it’s important for artists to have the best information possible when making career decisions. And that involves having the quality of access to information that the historical business entities in the industry have had. We think it’s a great product, and it’s clearly an important audience for Billboard to address. And it’s an important product in the state of Billboard’s evolution, starting from the magazine’s rich history going back over a century, focused for the past 60 years on the music industry.
Two years ago, Billboard.com was re-launched as a consumer site, which has been incredibly successful. At the time the re-launch was undertaken, Billboard.com reached three million unique users each month. We’re now, two years later closing in on almost nine million monthly uniques. Later this year, we should, if the site continues its current trajectory, cross 10 million monthly uniques (For May, we actually ended up surpassing 10M uniques). The Billboard brand is now not just one that’s meaningful to the music industry and people who work in the music industry, but clearly one that is very meaningful to the consumers. A huge amount of traffic to the site consists of people coming to look at charts. The Monday after the Billboard Music Awards we had 800,000 visits to Billboard.com, which was our largest single traffic day. It’s a hugely meaningful brand to consumers now, and we hope it’s going to be a hugely meaningful brand to artists.
After Billboard Pro, I think the next important project that we’ll be looking at is expanding on that reach to consumers. Now that we have this big reach to consumers, how do we take Billboard.biz and also reinvigorate it in the same way? We’re looking to do a redesign and an update of the Billboard.biz site later this year.
The other interesting opportunity we have is at Billboard.com. Part of the redesign of that site several years ago was a deal with Lala to do streaming as an accompaniment to the site. Since Apple bought Lala and closed down the Lala service once and for all in September, we have integrated streams from Myspace.com onto our charts. I think looking at the services that are out there today, there are a lot of interesting opportunities to do a lot more. We’re looking at things like chart radio – the ability to see a song on the chart and immediately launch a station based on that song and that chart. We want to continue to be very discovery focused. It’s an interesting niche for Billboard. You don’t really think of charts as being a driver for artist discovery. But I think clearly that’s what you see a lot of people doing when you look at the traffic and the way people use Billboard.com: They are coming there, looking to see what’s most popular, checking it out and clicking on purchase links.
Along those lines, as a guy who is re-branding, re-launching and setting up Billboard Pro for real growth, what have you found that artists most want? What are the most popular topics that are coming up on Billboard Pro?
The Amy Klein/Titus Andronicus piece was I think our most popular piece of editorial since launching the site last month. It’s still very early on, but I think clearly the “how-to” category/tips from industry pros about how artists can build their careers have been very popular. We did a promotion with Chevrolet in association with the Billboard Music Awards last month. We took new and developing artists – some that came from Pro and some that came from the “uncharted chart” we launched at the beginning of the year. The “uncharted chart” is a chart of artists who have never charted on a major Billboard chart/artists that don’t have retail or radio stories yet but do have online fan engagement. It ranks them by their online fan engagement. And we had a battle of the bands contest. A lot of people ended up checking out the profiles for these bands that were part of the contest.
I had no idea you guys would be so artist discovery driven. That’s wild to me. I didn’t see that coming.
A major goal for Billboard Pro is to find out how we can use these great platforms we built: Billboard.com, which reaches a really broad consumer audience; Billboard.biz, the magazine, and our conferences which reach the entire industry. We want to figure out how to take these platforms and connect new and developing artists with the people that matter in the industry and fans to help them grow to the next phase of their careers. That was the initial impetus for the site. And I think if we’re successful in doing that, we’re going to have a very successful product.
David Krinsky is Head of Label Relations and Business Development at the online music subscription service Rhapsody, which now has more than 750,000 subscribers. A long-time music fan, David got his start on the retail side of the music industry, working at Tower Records and then eventually moving onto BMG Distribution. An interest in the internet as it was first taking shape revealed to him the real opportunity it presented for people to get information about smaller and developing bands that music magazines or zines might miss, and he learned web programming and helped BMG start to develop its online presence, which led to a position on the BMG online team. Throughout the late 1990s and early 2000s he helped build an internet presence for a variety of music companies, including GetMusic.com and RollingStone.com and RealNetworks eventually landing in his current role at Rhapsody.
I got to sit down recently with David and discuss how he got involved in the internet music industry, what sets Rhapsody apart from other music services and how DIY artists can get their music heard and get more fans in the rapidly-growing online space.
Thanks for taking the time to talk to me, David. First of all, how did you get into the music industry?
It’s been a slow evolution. I’ve always been interested in music. If you really want to go all the way back to the beginning, my first music job was as a clerk at Tower Records about 17 years ago, which I still consider to be one of the most fun jobs I ever had. I’m still really sad that Tower is not around anymore. After that, I stayed in the same retail vein working for BMG Distribution for a couple years. Organically at the same time, I became interested in the internet and realized companies were starting to set up websites, and it was a great way to find out information about bands that weren’t necessarily being covered in magazines or zines or were part of things that were happening overseas. I started to learn how to do web programming and started to do some web work on the side for BMG. Back in the mid to late 90s, they didn’t have a lot online yet.
Because I had built up some music experience, but also had an interest in the internet and was watching the space very closely, I got invited to join the BMG online team. That’s at the point where my career pivoted from being just music, retail and marketing to being internet specific. I’ve actually been in an internet-specific vein ever since then, moving from BMG online to GetMusic.com, which was at first a BMG project but then became a joint venture with Universal. It’s basically a music content and marketing site. I went around to a few different sites, but the next big stop after GetMusic was RollingStone.com, where I worked for a couple years. I wasn’t working on the editorial side, but I was working overseeing content and label relations on the operational side, because the magazine only really handled at that point the original content. I was in charge of getting video, audio, original performances, which I had also done a little bit at GetMusic.
And that was your introduction to content wrangling?
I actually started to do some original content work for GetMusic in 1999, some of it boiling down to me interviewing bands while I held a video camera. I can’t even imagine who would’ve been watching those interviews, because I don’t know who would’ve had the bandwidth to watch it at that point, even just as a tiny square that was just basically a talking head. Obviously doing that work at RollingStone.com was doing it on a much larger scale, interfacing with a magazine and understanding the complexities of a big, multi-platform system where people could get into what you were doing from print, web and email and diversifying my understanding of different ways to reach a consumer and different ways to get content out there. When RealNetworks took over operation of Rolling Stone I ended up migrating over from being Rolling Stone-specific to being matrixed in the RealNetworks’ organization across music properties, ultimately landing on the Rhapsody side of the fence, where I’ve pretty much been ever since. I’m still largely working more on the content promotion and the strategic marketing side of things, but I moved over into the business development side of my role about three or four years ago.
What does your job as Head of Label Relations and Business Development at Rhapsody entail?
I wear two hats that are complementary in some ways but also strangely divergent in others. I’m responsible one-half the time for the business side of label relationships – creating the deals that get label content into the Rhapsody system, both from a basic standpoint and from the standpoint of how we use it. So, when we made the service available on the mobile platform, that was something we had to make sure was within the rights of our deals. We had to get everything in line there. I make sure we have enough content in our system and that our users can access it. On the other hand, the other half of the role is managing the actual relationships with the labels, working on marketing opportunities, making sure that beyond the core deal itself we get in as much content as we can and promote it and do outreach and let fans know about opportunities. We also help our editorial team to create original content for our users, whether that’s interviews or some of the other special features we do within the service. That’s who I oversee, along with a small team that is scattered across the country.
From an outsider’s perspective, there have been all these talks with Pandora and Spotify coming and going. And it seems that Rhapsody is out there continuing to offer more streaming music and growing very quietly into a very reliable service. The last few times I was on it, it didn’t miss, even when I tried to stump it with some obscure queries.
I think that’s the byproduct of really having been so early in the space and having had a lot more time to pick up the licenses. A lot of people now try to shortcut and do a couple different deals that grab all the content. We actually wound up going and getting hundreds of individual label deals. I think we have more individual label deals than anyone other than perhaps iTunes. Because of that, you see us having catalogues you don’t find in a lot of other services, like Discord and Warp Records. Some of these labels have migrated from different back ends to newer back ends, and not all the content has made it with them. And because we’ve been around for so long, we have some titles from different labels that I know they don’t have the ability to redeliver to anyone else, because it got lost somewhere along the way, and we just happen to have it from back in the day. Our longevity has really been one of the things that’s benefited our catalogue and in turn what users can get from us. We want people to find what they’re looking for, and all this gives us a good leg up to actually deliver on that.
I know there’s concern from people that are very ensconced in the way music is bought and sold about the shift over to streaming and not really owning anything. They wonder what it really is going to mean when everything is on demand. What are you seeing in that space, and how soon are we at a reality where people won’t need to own music?
I think we try to be aggressive in the space by doing a lot of the portable device integrations. We’ve done a lot of things in the past few years with SanDisk, Philips and others. It’s really been our pivot to mobile in the last year or so where we’ve really been able to give people an experience through mobile that actually excels beyond the ownership experience. When you own tracks, the only way you have them with you is if you put them on your device and load them up in a way where you can access them. It’s a very manual process that at the end of the day still only leaves you with what you’ve specifically purchased for yourself. Our catalogue is infinitely bigger than what people can grab for themselves, even if they’re using P2P. We make it effortless for them to listen to that music on their PCs, home audio devices, through certain TVs and set-top boxes as well. But it’s really the ability to take your smartphone – your Android phone, iPhone, Blackberry and now even Windows Mobile – and log into our catalogue and access any track. If I tell you right now about a band I’m obsessed with, you can go and listen to those tracks on your phone and take them with you as well. That’s not something you can do with tracks you own; you can’t expand on them openly. We’re finally being able to deliver a superior experience to ownership. I think the ease of the use, particularly with the combination of our new website and the enhancements we continue to make to our mobile phone apps make the whole experience easy, seamless. Our catalogue and the way we’re allowing people to access it is really what the users want. It’s something you can’t duplicate with owned content. You can only do it with a long-term and more robust library.
We’ve also optimized the format of that music based on the device you’re using to listen to it. If you’re on your mobile phone, you’re going to get it at a different bit rate than if you’ve downloaded it or are listening to it at home. On the other hand, if you’ve purchased the track in a certain format or quality, that’s what you’re going to get no matter where you are, for better or for worse.
Do you think the music in a cloud services that Google and Apple are working on will catch on?
It’s so hard to say, because there’s so much conjecture about what Apple and Google are going to come out with, and no one knows what the effect and value is going to be. It does seem to be centered around purchased content, your existing library or some combination of the two, which does give you more flexibility than you have now. But it’s not going to be as much flexibility as what we offer. I think, not knowing what they’re going to have in detail, the only thing we can say is that in a sense we’re not particularly anxious about those companies entering the space, because at a bare minimum they’re still going to educate people about accessing through the cloud, freeing people from the notion that their content can only live in one particular place and that where it lives is the anchor. I think helping people understand that there’s more flexibility than they currently enjoy is a positive. Because we can offer people a broad and flexible catalogue, I think it’s easier for us to take that education they may provide to some people and explain the value of what we’re providing. So, ultimately, it’s hard to say what will happen without knowing what Google and Apple will come out with, but the education alone should be helpful for us.
You implied there’s a certain amount of editorial space, and you’re working with labels in a promotional capacity. Does any of that extend to developing artists? Are you making space for the currently massive DIY movement?
Absolutely. It is hard because there is so much content coming to the space. We ingest thousands and thousands of tracks every day of the week. It’s a crowded space, but one of the things that sets us apart from other services is that we do have a full-time editorial team that is writing about albums and artists and creating associations and maintaining the hundreds of genres we have. If you want to make things really easy and just look at pop artists, you can do that. But we also have detailed sub-genres and sub-sub genres like shoegaze and Italian pop – all kinds of really niche categories that help people find exactly what they’re looking for.
Is that information available in front of the pay wall or behind the pay wall?
Through our website you can see any of the editorial content, including the genre and sub-genre breakdown and editorial content. So, you can see the original pieces, album descriptions or recommendations on each album and artist. It’s really only the content playback that’s behind the pay wall. Everything is geared towards you listening to whatever track you start with, whether it’s music you looked for or a track we presented to you on our home page or that you saw in an email. We want to take you from that first track to more content in one way or another. The editorial team is really dedicated to giving people next places to go to after they’ve listened to a track, album or artist. That’s what helps people get deeper into the catalogue and explore a lot more things that aren’t just Britney Spears or Rihanna top-of-the-chart-type artists. If you look, you’ll actually find we have a more diverse Top 100 artist list than many other services. There’s a lot more catalogue and a lot more indie. At the same time, we have done some analysis to show that the Top 100 artists represent less of our activity than virtually any other way of accessing music. The Top 100 means more to iTunes and P2P than it does to us. Our editorial and interface is optimized to getting people deeper in the system, and that in turn gives more opportunities for smaller, developing and niche artists to be discovered and listened to. A lot of the different editorial genre features help with that. We do new music indie reviews where we’ll do ten new releases for a week or two-week period. It takes people beyond the most obvious release in whatever that sub-category is and gives them a deeper look. I think it helps expose a lot of artists and releases that might not get a look in other places.
You’ve worked with a lot of different apps that have been music and internet related. And you’ve worked peripherally if not directly with a lot of artists that have succeeded. Do you have any insight as to what has made people successful in music either on the executive or the musician side?
On the musician side, I think a lot of it comes down to knowing how to connect with your fans. I don’t think it’s necessarily being on Twitter or Facebook every five minutes, but you should be on those outlets or sending out band emails enough. You need to engaged enough so the fan can perceive a sense of connection with the artist. I think giving the fan a lot of easy ways to connect with you will make them more likely to do it. Make it easy for them to follow you on Twitter, friend you on Facebook, sign up for your mailing list. I know that even I get frustrated when I’m interested in a band and I figure, “I’d love to see them if they ever come through town,” but there’s no mailing list or anything else. I may not remember to go check back on them again. The easier you make it, the more likely you’re going to be able to make a connection. I think you also need to make it easy for fans to know where they can find you, whether that’s in a live setting or listening to different services. There might be a couple tracks on MySpace, but then what? Let people know they can listen to your whole record on Rhapsody before they go out and buy it if that’s something they want to do. You need to let people know the different outlets where you can be found.
So, I think making it easy for the fan to find you and making them feel a sense of connection are very important on the musician side. You need to know there are a lot of different tools at your disposal. All an artist has to do is sign up and get a release out through TuneCore or CDBaby, and, just like that, their release is available in iTunes, Amazon, Rhapsody and all these other different services. Each of those services is potentially another way to be discovered.
On more of the business side of music, it’s really about trying to be aware of different trends and knowing what’s working in the business today but also trying to keep your eye on what might work tomorrow, because it is such a quickly-changing space. You need to have a love for music, because it is a difficult space to work in right now. Having it be something you’re passionate about helps the drive. And you need to use that drive to be a really hard worker. To really be effective in the music business today, you need to be willing to put in nights, weekends or extra hours in some way or another to get stuff done and get ahead. It can be daunting, but if you love of music is driving you forward, it makes it easier.
To learn more about David Krinksy and what Rhapsody is doing for subscribers and artists, please visit the Rhapsody website. You can also follow David on Twitter.