splash

Music Marketing

Posted By Rick Goetz on July 6th, 2013

A blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.

 

Posts Tagged ‘Promoters’

Spotify, Mechanical Licensing and EDM News, April 14, 2012

Posted By Julia Rogers on April 14th, 2012

Online music services took the spotlight this past week as Spotify launched its new integrative “Play Button” and the music industry finally struck a deal with streaming services regarding mechanical licensing royalties. Also, industry analysis showed that electronic dance music has become one of the most lucrative niches for independent promoters and artists.

 

 

Spotify’s “Play Button” Revealed

 

Spotify launched its new streaming music widget on April 10, and according to Billboard, it will another step towards globalization for the already-popular music service. Using the Play Button, users can stream music through the Spotify desktop app using a widget on a web page. This is expected to help spread the word about Spotify to those not already using the service and even guides them through the process of registration.

 

The Play Button is also the introduction of new partnerships that will make the process of integrating the tool simpler for both artists and music fans: FanBridge; Tumblr; FanRX and ShareMyPlaylists.com. These companies intend to start using the Button in their different platforms. Other editorial partners, including Pitchfork, Rolling Stone, NME, Popdust, Spin, The Huffington Post, The Guardian, Time Out and Mashable. have signed on to write about Spotify’s new offering.

 

Charlie Hellman, Spotify’s director of product development shared with Billboard.biz that this new Button is a response to the frustration users have reported surrounding sharing music via the Intenret:  “Streaming on the Web was scattered, disparate and unreliable.” The two biggest examples of this disconnect are embedded YouTube videos that will not play because the content owner has asked it to be removed or the uncertainty of which tab on a Web browser is streaming music. Hellman added that the people at Spotify felt that having one music player to “manage playback,” promote consistency and mitigate conflict  would offer a more streamlined listening experience.

 

While the Play Button is new, streaming widgets are not. They were used often early on in digital music, as many in the music tech industry felt that widgets would help those with web pages play DJs or connect directly to retailers. However, newly-envisioned widgets have turned into incredibly powerful marketing tools. Popular digital music companies like Topspin and ReverbNation provide widgets for artists that help stream music, collect email addresses for their mailing lists and direct traffic to their personal or label websites. And many widget-based storefronts have turned into Facebook apps that help artists enhance the ecommerce component of their websites.

 

Billboard also speculated that Spotify’s partnership with Tumblr could be huge. Those using Tumblr copy the URL or Spotify URI into a Tumblr audio page, add text and then put the post out there for the world. And Play Buttons can be directly shared by other Tumblr users on their own feeds.

 

However, Gray Blue, Director of Music Industry Relations at FanBridge – a fan growth and marketing site for artists – stressed that streaming music is not just about marketing for artists:  “This is seriously an answer to the most continually-asked question I’ve had [from artists] for the last year and a half:  How do I monetize Facebook streams?” FanBridge will now be offering the option for clients to add the Play Button within the FanBridge Facebook app and essentially stream royalties from their Facebook fan pages.

 

The biggest impact of the Play Button could be that it helps create a real network that will give Spotify a competitive edge:  The more often Spotify’s Play Button appears online, the more new listeners will sign up for the service and the more other people and online companies will post Play Buttons.

 

Groundbreaking Digital Royalties Deal Finally Reached

 

The music industry finally struck a historic deal with the Copyright Royalty Board (CRB) about mechanical royalties rates on April 11, said an article in The Hollywood Reporter, and the RIAA chairman called it “historic.” The agreement will set rates going forward for digital music, settles an ongoing argument about statutory license fees and will set new rules for many “cutting-edge business models” such as cyberlockers, streaming services and other subscription-based music services.

 

This agreement was announced by the Recording Industry Association of America (RIAA), the National Music Publishers Association (NMPA) and the Digital Media Association. These three entities will soon submit a 25-page agreement to the CRB that allows existing rates and terms for CDs and downloads to be carried over. Five new categories are also being proposed to be added to Section 115 of the U.S. Copyright Act, the section dealing with mechanical royalties. Proposed amendments include adding the following items to the system as items that will bring revenue for artists, songwriters, etc.: “mixed service bundles,” which include locker services, ringtones, etc. that are joined with music-unrelated products such as mobile phones, consumer electronics devices or Internet services; paid locker services; purchased content lockers; limited offerings,” which includes subscription-based services that provide only one or several genres of music or limited playlists; music bundles,” including CDs, ringtones, digital downloads.

 

Internet music streaming royalties have been a notoriously-debated topic since digital music took off, and if these items are added, those in the music industry believe rate negotiations will be much simpler than they have been in the past. Lee Knife, executive director of the Digital Media Association stated that the new landscape that could be created by changing copyright law could provide huge growth and earning opportunities for everyone:  “Today’s agreement paves the way for our members to continue developing exciting new business models that satisfy consumers, create greater revenue opportunities for music creators and effectively fight piracy, the music industry’s greatest threat.”

 

RIAA chairman Cary Sherman added, “This is a historic agreement that reflects our mission to make it easier for digital music services to launch cutting-edge business models and streamline the licensing process.”

 

Live Music Industry Reveling in Electronic Dance Music

 

Electronic dance music has become one of the most lucrative genres in the live music industry and is bringing huge opportunities (and big money) for independent promoters and DJs, according to Ben Sisario of The New York Times.

 

Electronic dance music (also called “EDM”) has been around for decades, but has only attracted large-scale-tour-worthy audiences in the past few years. In December, 2011, Swedish House Mafia was the first electronic DJ act ever to headline at Madison Square Garden. And this coming summer, DJs like Avicii and Kaskade will appear at some of the same arenas as artists like Coldplay and James Taylor.

 

Why has it exploded in popularity recently? Sisario cites that pop radio darlings like Lady Gaga, Rihana and Katy Perry’s incorporation of the sound into their songs have brought it to the masses … en masse. And while record sales have stayed low for dance music – David Guetta’s big album “Nothing But the Beat” was a top seller in the genre, but still only sold 300,000 copies – DJs were recognized at the Grammys this year, with Skrillex winning three awards and Guetta and Deadmau5 performing alongside the Foo Fighters and Chris Brown.

 

EDM festivals have brought the spirit of the rave, once questionably-legal and relegated to underground clubs and warehouses, to the mainstream. Their profit margins have even attracted the attention of Wall Street investors. In an industry that has started to put all its live music money on “aging headliners” like Bruce Springsteen, Madonna and the Rolling Stones, EDM has become appealing because it is full of fresh faces and attracts hordes of young fans. CEO of the world’s largest concert promoter, Live Nation Entertainment Michael Rapino said, “If you’re 15 to25 years old now, this is your rock ‘n’ roll.”

 

As an example, in late March, the Ultra Music Festival in Miami attracted 165,000 fans. And events featuring EDM artists like Deadmau5, Tiesto and Afrojack in Los Angeles, Las Vegas and Dallas have been reporting comparable attendance. The opportunities for these DJs to earn money has also been great as a result of the explosion of live event attendance, according to talent agents, with many of the bigger acts earning $1 million for a festival appearance and $10 million for a Las Vegas club residency.

 

Independent concert promoters are also winning, as many – such as Insomniac, Hard Events and Ultra – have found a niche for themselves in the EDM live music industry. Analysts feel that part of this opportunity has arisen because of the nature of EDM, which is designed to create a feeling of community, as it is essentially “high-energy waves of mechanized sound that, at its best, creates a communal experience for a sea of strangers.”

 

The success of artists and independent promoters is also attracting investors from within the music industry as well as those on the outside. Huge corporate promoters Live Nation and AEG Live have started to invest. And outsiders like media entrepreneur Robert R.X. Sillerman have started to notice the power of EDM. He was responsible for bringing together regional rock promoters in the 1990s to build Live Nation.

 

However, while there is great opportunity in the EDM arena, getting into the dance music festival business represents a risk, as figuring out the real value of promoting companies is challenging and there are risks inherent in putting together events for tens of thousands of people. For example, at the Electric Daisy Carnival in L.A. two years ago, a 15-year-old girl died of a drug overdose. And there have been other deaths at other festivals, as well as an incident where at the same event in Dallas, more than two dozen people were hospitalized for drug-, alcohol- and heat-related issues.

 

However, the latest resurgence of EDM is still huge for the genre. Since it has previously been “mostly associated with secret locations and drugs,” the amount of money suddenly flowing in (the biggest investors have been offering deals ranging from $20 million to $60 million to buy out bigger promoters) has been surprising. Joel Zimmerman, a William Morris agent who books a lot of top EDM acts said, “It feels like the dot-com era … There’s a little bit of a gold rush going on, with outsiders looking in.”

 

And many of the dance festivals have created strong brands, selling huge numbers of tickets just based on their names and the audio-visual excitement they offer. Still, a partnership between DJs and large-scale investors could prove challenging. Live music has turned into a risky and low-margin business for promoters, and ticket pricing is a balancing act. Pricing tickets too high or too low can drive a successful festival out of business. And many also wonder whether or not dance music will stay popular, or if it will fizzle out eventually as it did like electronica did in the 1990s.

 

Of course, there are also two clashing cultures involved. Dance music promoters and managers tend to be distrusting of huge amounts of money and not familiar with the corporate way the mainstream live music industry is run. And many worry the festivals they have worked hard to make unique will lose their interactive spirit. Independent promoter Gary Richards of Hard Events said that the big investors he spoke with clearly did not understand the market. He added, “You just can’t franchise this like McDonald’s.”

Ask a Club Owner part 2

Posted By Rick Goetz on September 16th, 2009

This is the second part of my interview with Howie Schnee of Creative Entertainment Group and Sullivan Hall.  You can see the first portion of the interview here.

Sullivan-Hall-Music-Consultant

Musician Coaching:

What is your feeling on the pay to play concept and why?

Howie:
I don’t have a problem with it as a talent buyer or a manager. Bands pay for advertisements, promotion and publicity. The bands that “get it” realize that playing in front of a good crowd of like-minded fans is the best exposure available. Better than ads or publicity. When we book a strong regional or national act it generally carries a lot of risk on our part. We hedge that risk with opening acts that we know are worth a good amount of tickets. When a band comes along that we’ve never heard of submits to open on one of those shows there’s not much incentive for us to do it, so if it’s a good fit musically we may suggest that they “guarantee” their draw by selling or buying some tickets to the show. I’d understand why some bands would object, but I’ve found that most smart, motivated younger emerging bands will get out there and hustle and sell some advance tickets for the great exposure opportunity.

Musician Coaching:

What are some of the most effective promotions and / or campaigns you
have seen that have made for great shows?

Howie:
I could name a lot of great promotions and campaigns but I think the general themes an act should focus on are: not overplaying any market they’re building; align themselves with other like-minded bands; try to build their own little scene; making their fans feel a part of the show and the success of the show in some way- in any way.  That and delivering a great experience once they actually get to the show.

Musician Coaching:

I remember when I played your club as a kid that some bands from out of
town would bus in their fans for the show and nightlife in NYC.  Does this
kind of thing still work for people looking to build New York as a secondary market?

Howie:
Bands from Jersey, CT, PA still do this. Here is an example of where we’d be amenable to putting a band on a really good exposure slot. The band obviously put a lot of work and money into organizing the bus trip, and they’ve guaranteed that they’d have at least 40 – 50 people coming to the show on their bus. Therefore, I think it can be a really smart way for a band to begin to build their audience in the city. As long as they play on the right show at the right time slot and gain some good exposure from the show, and they follow up the show in the not-too-distant future, it’s a worthy investment.

Musician Coaching:

What are the absolute requirements for getting people out to a show in
your opinion?  Is it promotions on Facebook and MySpace, or good old-fashioned flyering?  What works in your opinion?  Also, do you find that there is more impact from in person promotion than online promotion?

Howie:
All of the above. A band should be utilizing every tool at their disposal, and these days, there are so many free ways online and off for a band to use. I definitely think musicians, particularly outgoing ones, should be out there networking, meeting potential fans and other musicians like it’s their career. They should always be armed with music for those that seem interested – CDs, MP3 cards, flash drives.  Bands shouldn’t be too concerned with giving away their music vs. selling it. The primary goal is to create fans in the long run, not make a few dollars in the short run.

There’s a band we booked a few years ago that are doing really well. Touring nationally. Their band is their full-time job. They’ve gotten themselves onto a lot of the major summer festivals out there. Anyway, a couple guys from the band were always out there pushing their band. At every show and event, handing out cards, giving people CDs, almost every night. Constantly making in-roads with the tastemakers. If it wasn’t for their hard work ethic, I don’t think they’d be anywhere close to the level they’re at now.

Musician Coaching:

What would you say has separated the groups that have gone on to play bigger and bigger clubs and draw more and more people from the ones that never got an audience beyond their friends?

Howie:
Talent, drive and organization. You can get a sense of all three pretty quickly.

Musician Coaching:

Knowing what you know now- say you got to start over as a musician and
retain this knowledge – what is your best advice or guideline for building a
following?

Howie:
It’s a mix of what I’ve been referencing in my answers to your questions. I’m a big proponent of a band working really hard on their live show. If the show is something special, and the band is hard working, and employs many of the tactics I’ve referred to, then the band has a great shot. In the 90s and the first 3 or 4 years of this decade, it was all about getting a record deal. That was what was on every band’s mind. These days, many bands’ goal is to find a good agent. The diminishing influence of the major label system has evened the playing field in many ways. I think these days, if a band doesn’t have a killer live show, and they plan on having a career, they should work tirelessly on developing the best live show possible.

———

For more information on Howie Schnee and his company visit Creative Entertainment Group.

CEG-Music-Consultant