This site is a blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.
This past week in the music industry, technology reigned as TuneCore launched a new service to help artists collect on missing royalties and EMI partnered with Echo Nest to build a space for music app developers to hone their craft. Also, studies showed the music industry could be directly helpful to the U.S. economic recovery process.
TuneCore Songwriter Publishing Administration Service Launches
The online distribution service TuneCore announced the arrival of its new service that helps songwriters collect on unpaid royalties on November 2, according to the Wall Street Journal. TuneCore is used by thousands of signed and unsigned bands and helps them get their songs and albums into major online stores. Now, the platform has enhanced the support it offers to artists trying to capture their royalties painlessly with the Songwriter Publishing Administration service, designed to get at the millions of dollars of revenue that has been uncollected by artists, referred to as the “black box.”
TuneCore has been discussing missed royalties issues for many months in the site blog and has long promised to start to roll out services that will help address the major problems in this area. This latest release marks the company’s first solution of this type for songwriters. The tool offers a deep roster of features that will help songwriters register their songs, track copyrights and pursue legal action to get unclaimed royalties.
This service for songwriters costs a one-time $49.99 setup fee plus 10% of the money that TuneCore is able to recover for each artist.
This past week, Nine Inch Nails frontman (and recent Academy Award winner) Trent Reznor provided his endorsement of TuneCore’s new offering. He has been using TuneCore for over six years for all his releases, citing it as an “interesting and efficient solution” to get his music out “everywhere and circumvent the existing machine in place:” “When they reached out to tell me about their new big idea – adding transparency and straightforwardness to the murky waters of publishing administration (which to me is a world as boring and convoluted as it sounds) I was very interested. If they could pull off what they did with distribution on the publishing administration side of things, this could be a pretty big deal – it could be another important tool that further empowers the musician/songwriter directly.”
(You can also read a past interview I did with TuneCore founder and CEO Jeff Price, who talked to me about some of the finer points of digital distribution.)
EMI Builds a “Music App Developer Sandbox” with Echo Nest
EMI and Massachusetts-based tech company Echo Nest announced on Thursday that they will be launching a site that will give music app developers an online platform, music-analysis tools and a place to play with and build new app ideas based on EMI content and properties. Developers that work through this “digital sandbox” will not get guaranteed licensing for the apps they create – EMI has to approve all apps that get built and use its artists’ songs, videos and other content. But, this tool is promising to greatly decrease the barrier to entry into the app space for tech entrepreneurs.
The idea for the website came about because of the high failure rate of companies building products around artists’ work in the music space. Online companies like Liquid Audio, CenterSpan, Echo Networks, Music Buddha, etc. have all died quickly, often because major labels make them go through such a lengthy process to get content or use content in new ways. This drives up costs for these tech startups, delays launches and makes raising capital very difficult.
Bertrand Bodson, EMI’s head of digital marketing said that the company has already secured deals with a handful of artists that have recording and songwriting deals through EMI, such as Gorillaz and the Pet Shop Boys. These artists will collaborate directly with app developers. EMI is also making content available to app developers from some of its older pop acts, including Culture Club and Simple Minds. Echo Nest will be managing the platform and making music-related software features such as song identification, playlist creation and remixing available to tech-preneurs.
This sandbox also has preset licensing terms: It is a 60-40 split, with developers getting the smaller amount. This split is competitive with deals that major labels have been offering online music retailers and subscription music services. EMI will be charged with clearing the rights to tracks that developers use and will provide some marketing services to promote the music apps that make the cut.
One of the major goals of the project is to help music developers gain entry into the growing mobile market. Only about 4.2% of the apps available in the Apple App Store relate to music. Echo Nest already controls over 200 music apps. So far, the company has signed up EMI and Universal Music Group’s Island Def Jam, a label that is not yet ready to use the sandbox.
The Music Industry Could Be Vital to Economic Recovery
The results of recent studies revealed that the music industry could play a big part in economic recovery in the coming years. An article published on the Bloomberg Businessweek website revealed that a report released on November 2 in Washington by the International Intellectual Property Alliance – a collection of organizations whose members include Apple Inc. and Paramount Pictures – showed that the publishing, software, film, music and TV industries pumped $930 billion dollars into the U.S. economy in 2010, which represents over 6% of the total gross domestic product. As a result, industry experts are highlighting the importance of pushing ahead with new anti-piracy legislation.
During the past few weeks, entertainment and software industry groups have been asking Congress to keep the sector healthy by approving recent legislation that would shut down websites that sell illegal copies of movies, music and computer programs and games. An attorney representing the organization, Steven Metalitz stated, “The analyses released … demonstrate the vibrancy of copyright and creativity as an engine for growth. To preserve and enhance that vibrancy, we must ensure strong legal protection for U.S. creativity, innovation and ingenuity, both here and in the markets of our trading partners, in both the physical and online world.”
Recently, U.S. Texas Representative Lamar Smith introduced the bill H.R. 3261 that would allow the U.S. Attorney General to pursue court orders that would block foreign websites that steal and sell U.S. products. It would also increase the criminal penalties for selling counterfeit medication and military goods.
However, some tech experts and lawmakers are against this bill, because they believe it may be too ambitious. The Computer & Communications Industry Association – which represents companies like Google and Facebook – are pushing for more objective discussion about copyright bills in Congress before anything is passed. The organization’s CEO, Ed Black said, “Too often we hear about the cost of piracy without also considering the cost to legitimate sectors of the U.S. economy of poorly targeted copyright enforcement measures like the pending Protect IP Act and its even worse companion, H.R. 3261 … Congress needs to consider the overall economic picture both to the entertainment industry as well as the tech industry and other sectors.”
This is part 2 of 2 of an interview with Jeff Price, the Founder and CEO of Tunecore. If you missed part one you can read it here.
Fair enough. From the TuneCore stats it sounds like the unbundling of the album really has completely changed the playing field. You have people buying one track, five tracks, an EP; it’s all over the map I’m guessing.
JP: It is. The other thing I would stress is in defining if a musician is breaking or successful, I think it’s rather narrow for anyone outside of the artist to determine that on their behalf. I think each musician and each band has their own definition of success to a certain degree.
Other than conducting a world-wide musician audit, I don’t think we’re ever going to have a metric that covers it anymore.
JP:
Exactly. And even if you did come around to some, there’s so many different income streams now, so to suggest that “breaking” or fame is predicated on album sales when you have record labels themselves doing 360 deals, because they’re doing deals where they get to participate in revenue that are outside of music sales because they now know when they make an artist famous, they don’t make money off the music the way they used to. So they have to partake of revenue that’s coming in from new income streams, like merch or gig.
How does a former record guy like you feel about that? Do you think that’s a justifiable approach, that these record companies become music companies?
JP:
Honestly, I think a management company is a record label. There’s no difference anymore. The only difference that now exists is distribution, but with something like TuneCore, it levels the playing field. Managers used to take X% of an artist’s revenue across all income streams. Now granted, they used to like to try to get those big advances from the majors, because a bird in the hand is better than two in the bush, and they could just take a big slice off the top. If the artist failed, they still made their money. But that’s the way they operate. It’s a manager’s job to go out and provide the artist opportunity that they couldn’t otherwise get on their own, or manage their affairs for them, or provide them new opportunities they couldn’t get. And they serve the musician, and they take a portion of that money for their services. The two are very similar.
Musician Coaching: Even towards the end of my label run I used to say, “If you were doing any real work, you were doing some kind of management.”
JP:
Absolutely. That’s what we did at SpinART. And frankly, it excites the hell out of me, because what I see is an explosive growth in the music industry. I’m not a “doom and gloom” guy on this at all. What I see is more music being created, produced, released, shared, discovered and bought than at any other time in the history of the world. And more is better; more is healthier. No one’s suffering because there’s more music. No one’s getting hurt because there’s more music, and I don’t buy it for a second that because there’s more it means no one can find the quality. That’s the joy of social networking.
The only thing I would say is it really does make somebody like a taste maker or a DJ much more special. It’s a much harder job now to be good in that role, because the amount of sifting can be overwhelming.
JP:
I agree with you to a certain degree. But on the flip side what you’re finding is the collective population is doing that sifting for us. What I mean by that is, the A&R source becomes society. You’ve got – I don’t know how many people tweet and how many people on MySpace and how many people on Facebook – over 100 million, and that’s a lot of people. What happens is, here I am, looking at a report, and I can tell you, the artist called Boyce Avenue at this point have sold over 1.2 million songs within the past twelve months, no record label. They now have management. In the month of November, they sold over 36,000 additional songs across their catalogue of nine different albums. Colt Ford sold over a quarter million songs over the past eight months. And here’s a funny one. Monsters Halloween Party, the Ultimate Scary Sounds or Music for Your Halloween Bash – it’s just spooky sounds – 1,700 albums, 10,000 singles. Never Shout Never – kid I mentioned before – 1.5 million songs in the past thirteen months, 32,000 songs sold across three EP’s in the month of November. Kim Zolciak, “Tardy for the Party” – I don’t know who she is yet, but maybe others do – 20,000 songs. This is just one month, by the way. This is the month of November I am describing right now. John LaJoie – a French Canadian comedian, uploads a video to YouTube for a song called “Show Me Your Genitals,” I kid you not, and another song called “Average Everyday White Guy.” He has now done over a quarter million songs in four months, and in the month of November, 1,000 albums and 12,000 songs. I’m looking at a list here that goes on for 3,000 artists. It’s every artist that earned over a certain dollar amount.
As a guy who helps democratize this process, you have to have a pretty interesting vantage point on what those people at the top of the list you just referenced are doing. To have international distribution for under $50 is phenomenal. But I do think there is a certain point that the landscape has changed so much by pure volume. What do you see that people are doing to distinguish themselves from everybody else who it might be their first month with a guitar, and their stuff is up on MySpace? What are you seeing that’s working?
JP:
The answer isn’t one that anyone really likes. I wish I could give you the silver bullet. The reality is, there’s nothing you can do to cause your music to sell beyond making sure it’s out there. Out there means, MySpace page, Facebook page, a TuneCore media player that you post all over the place, making your music available to buy in digital stores. If you’ve got a video, upload that video to YouTube. Communicate that the media is out there. You have access now as an artist to get your music out to the media points. It used to be you couldn’t get to MTV without going through multiple gatekeepers to get programmed. Now anybody can go to YouTube and upload a video. The trick is, the art you create has to cause a reaction. If it doesn’t cause a reaction, it doesn’t matter how much exposure you get. It doesn’t matter how many people hear it, because no one’s reacting to it. I always use “Smells Like Teen Spirit” as an example. If “Smells Like Teen Spirit” wasn’t a song that caused reaction, it wouldn’t have mattered how many times you heard it on commercial radio, it wouldn’t have mattered how many times you saw the video, it wouldn’t have mattered how many hundreds of millions of dollars were pushed at shoving it down your throat. If it doesn’t resonate with the consumer, with the music fan, people aren’t going to buy it.
Gone are the days of “spends double-platinum to get gold.” I remember those days not so fondly.
JP:
As you also probably remember, there was a 98% failure rate at the major labels. That’s the other point, which is sort of buzzing around the Internet, it used to be that you could only break if you had lots of money and connections. Bullshit. Even with lots of money and connections, you usually lost lots of money. 98% of the major record labels released failed. They didn’t take. And it wasn’t because of a lack of access. It was because the art didn’t cause a reaction. And the art has to cause a reaction. What’s so cool now is that with everyone having access to the media outlets – and I’m not trying to be vague, but upload a video to YouTube, go to iTunes and create an iMix, put in three of your own songs and nine songs by more popular artists in the same genre, because that’s how people discover music in iTunes. Name your song in a specific way to service the search engines, or do a cover version of somebody else’s song. People go to iTunes and look up songs they know. We have one band, as one example, to get sort of off the point, that uses us called “ACDB.” They sold 47,000 songs and over 1,000 albums in the month of November. The reason they sell so well is because ACDC isn’t in iTunes. So when someone looks up an ACDC song, they by default show up. That’s an extreme to make a point, the point being, keep in mind the way search engine technology works. If you call your song “Let It Be,” which you’re perfectly, legally allowed to do, your song “Let It Be” will show up next to other songs named “Let It Be.” You can also name your band in particular ways, or put “klezmer” in parentheses after song names. So there are ways to – I don’t want to say game the system – but there are ways to get yourself to surface or pop up using the fame of others or niches. The Internet is about niches. People are logging in usually because they want to hear Celtic or heavy metal dwarves doing opera songs, or whatever it is. If people are into that, you name your band, “Celtic Heavy Metal Dwarves Playing Opera Songs” and you’ll surface within the search engine.
Musician Coaching: Sorry, what? I completely tuned out. I was half-way on my way to sending out e-mails to start the Celctic Heavy Metal Dwarves band…
JP:
iMixes are one thing, media in particular, putting it out into the world and video. Don’t be afraid of video. You can flip out your phone now and film Paris Hilton, if you happen to bump into her on the street, it doesn’t matter the quality of the video capture, you’ll still get a bazillion people looking at it. Make a flash animated video game set to your music. Use the game as way to get people around the music. We now do digital distribution into Rock Band, where your song becomes able to be played in Rock Band. There’s a lot of people that play Rock Band, and there’s not a lot of songs to buy. The probability is, you could probably sell a whole bunch there and gain some fame through that. By the way, all that is not tracked by Nielsen. There are some bands that play video game conferences where they have 5,000 screaming gamers come to see them play. But when they go out and play at a regular venue, maybe they’ll have 100 people paying for them. It’s kind of funny.
Here’s a question for you. I also read in recent press that you guys partnered with Universal. How does that work?
JP:
Basically, we’re an A&R source for them, because the data we have – despite what others might suggest – on the musicians indicates those artists that are breaking.
They used to do that with radio spins on indie artists. I can see that working well.
JP:
It actually has. Since that deal has launched, there have been five signings by Republic in the last five months all coming from the top-selling TuneCore artists. Boyce Avenue, Jaron and the Long Road to Love (which I think that deal has closed), Colt Ford and there are a couple more. There are five of them that just happened. Prior to doing the deal with universal, there was Drake. Then before that, there was Soulja Boy and there was MGMT and Secondhand Serenade and Neveshoutnever and Medic Droid. The number of artists that have used TuneCore that chose to work with an outside company, primarily record labels or what used to be record labels is 20-25 bands in the last year and a half.
How does that work being that you’re non-exclusive?
JP:
This is a stunning part of the Universal deal. There’s now a website called Interscope Digital Distribution. There’s a website called IDJ (Island Def Jam) First Look, there’s Republic Digital Distribution and UniMo Digital Distribution, which is Motown. And TuneCore hosts and serves those Websites for those major label imprints. And any artist on the planet can go to those sites if they want and get worldwide distribution of their music under the exact same terms and conditions as TuneCore. You keep all your rights and get all the money. But if you choose to go through that site, what you’re agreeing to is to allow Interscope Records to see how you’re doing. You increase your opportunity of being discovered by them, and then they have to work their asses off and present you a deal to sign you. There’s no first look and no catch.
And it doesn’t cost any additional money to be a part of that?
JP:
No, it does not. And the reason I did the deal is because I feel that it’s not my place to tell an artist what they should or shouldn’t be doing. I want to provide options and opportunities and information. If you want to go and get signed to Interscope Records and strike a deal with them, and I can help you facilitate that, that’s my job. You want to get on iTunes? I’ll get you there. You want to get into Rock Band? I’ll get you there. You want to get into eMusic? I’ll get you there. You want to get paid for your streams on MySpace Music? I’ll get you there. You just hit the website, you upload a song, you click a button, and I get you there. So what this is, it gets you the worldwide distribution, but you have more direct access to the A&R people, who literally log in and troll through the data to see what’s going on with the artists that come through their site. And if there’s a band they want to reach out and contact, then they have to reach out and contact that band, or woo that band and provide the right deal that makes sense for that artist. And hopefully, with this empirical sales data under their belt, when you’re Nevershoutnever or Boyce Avenue and you can say, “Look, I sold over a million songs. What are you going to do for me?” It puts you in a better negotiating position.
———-
Check out Tunecore at http://tunecore.com
Jeff Price is the Founder and CEO of the digital distribution company Tunecore. Prior to founding Tunecore Jeff ran a label called SpinART Records for seventeen years and also worked at E-Music in their very early days.
Jeff, thanks for taking the time to speak with me. Take me back to five years ago when you saw this need and created TuneCore.
JP:
While at SpinART I crossed paths with Frank Black. It’s the Pixies really that get credit for all this. The Pixies get credit for TuneCore! In 1995-96, I was trying to get a band that SpinART had released called Lotion on tour with Frank Black. Frank Black was going on a solo tour, and through the booking agent I got the name of the manager, a guy named Ken Goes. I called Ken Goes, and while we were on the phone, I was telling Ken why we should have the band Lotion open for Frank Black. Ken put me on hold, and came back and said, “Well, that deal just fell through.” And I said, “What deal?” He said, “Well, we have a new album called ‘Frank Black and the Catholics,’ and we were negotiating with Stone Gossard from Pearl Jam to put it out through his record label, but the deal just fell through.” I asked him why, and he said, “We had done a deal with a company called Good Noise, where they had the exclusive rights to the ‘Frank Black and the Catholics’ album in the digital format, and we only had the physical to offer them, and they wouldn’t do that unless they had all the rights.” Mind you, this was 1995-96.
Digital rights didn’t mean too much in 1995-1996…
JP:
Yes, and there was dial-up, not a lot of broadband. And with mp3, people thought, “Huh?” So I told Ken, “Well, I can release it.” He said, “Well make me an offer,” and I did; and we ended up releasing the next seven Frank Black and the Catholics album, and the Pixies record, and the Frank Black/Francis double-disk DVD. More importantly what came out of it is a gentleman showed up at my office from a company named Good Noise named John. John is now the chief financial officer of TuneCore, but John at the time was consulting for Good Noise, and he said, “You have the physical, we have the digital; we should talk.” And Good Noise is the company that became eMusic. I met John, and we hit it off, and I was involved in writing the business plan for eMusic. They also used me to help raise venture capital. That’s how I got into the whole digital distribution realm, was through this Frank Black album, and my introduction to Gene Hoffman and Bob Kohn, the founders and CEO and Chairmen of eMusic. Ultimately I was the interim vice president of content acquisition for eMusic, where I would pick up the phone and call other record labels to attempt to license their music for sale at eMusic.com. Then I got into the business development and intermittently ran the New York office. Then I moved out west for a year and lived in San Francisco during the whole Dot-Com boom. That was a treat. (That’s sarcasm in case that’s not picked up by readers.)
I really got immersed into the digital download culture, because that’s where it all began, with eMusic. Moving on from there, after being with eMusic from 1996-2000, I came back East, and I no longer worked for eMusic. They laid me off; they actually laid everybody off. I continued to focus on SpinART, my record label until around October 2005, where I literally was sitting around watching my label go under. I was trying to figure out, “How can I stay in business and be involved in the music industry? What can I do?” Record labels make people famous, and then they monetize that fame by selling the music, but so much music is being given away for free, and this whole thing is chaotic and confusing. I wanted to come up with a way to remain in the music industry which wasn’t predicated on whether or not the music sold, but would still be of value to the musicians. The second thing that occurred was my record label spinART got pitched by what’s called digital distributors, also known as aggregators, to do the digital distribution for the label. SpinART had a deal at that point through Warner to do the physical, but it didn’t have anybody to do the digital. We did all our own direct digital deals. These aggregation companies showed up and said, “We want to do spinART Record’s digital distribution.” I asked them what the deal terms were, and they said, “Well, we have to control the rights to your master recordings exclusively for a minimum of three years or five years, and every time the music sells, we want to take a percentage of the money just like a physical distributor and take anywhere between 15-30% of the revenue. And we’re going to account back to you quarterly, 45 days after the end of each quarter even though we get paid monthly and we’ll only pay you if we determine you’ve made enough money, and we’re going to do all the collection and administration.”
So you basically said, “Where do I sign up for that abuse?”
JP:
That’s what I heard. That’s probably not the way they put it, but that’s what they were saying. To take a step back before I move forward, realize that up until digital distribution, if you wanted to have a career as an artist you had to get signed to a record label, because the record label had the deal with the physical distributor, and the physical distributor was the entity that could put your record onto the shelf of a store to allow it to be bought. If it wasn’t there, it couldn’t be bought. And to do physical distribution is tremendously expensive and has huge overhead and a huge knowledge base. You need a 500,000 square foot warehouse with 50-foot high ceilings; you need people running around picking and packing and shipping music. Everything in the music industry is on consignment, so all those CD’s that get shipped out to the 10,000-plus record stores across the 3,000 square miles of the United States can all come back for a full refund at any point. And when they come back, they can be broken or they could have stickers on them. They could need to be destroyed or refurbished or alternatively you need to deal with the billing cycles on them, so if someone has a 60-day credit term and return a portion of their inventory, you have to give them their credit back. This is a huge nightmare. And that’s just the warehouse and the invoicing and the returns processing.
Then you need the other 30 people running around the country walking into the record stores, going to the store buyers and trying to get the product in the store and putting it on their limited shelf space. You beg, you borrow, you plead, you pay the money to rent their real estate in the form of cooperative advertising like a listening station, or you take the guy out to dinner. You know the sort of things one would do in order to gain access to that shelf space. Some of it was unseemly, and some of it was very expensive. But the gatekeeper to the success of the sale of the artist in some way could be the buyer at the store; because if the buyer at the store didn’t put the record on the shelf, it couldn’t sell, and if it couldn’t sell, money wasn’t being made. The physical distributor made their money when the record sold. So, if Tower Records took it in and put it on its shelf, and they paid $10 back to the distributor and sold it for $15, the distributor would take 25% of that $10 — $2.50, give the other $7.50 to the label, and the label would then give the artist their share, which was anywhere from $1.35 – $1.75. That was the food chain.
What happened with digital distribution is you had two fundamental changes in the industry. You had unlimited shelf space, where everything could be in stock at no detriment to anything else. So for the first time there was no more fighting for shelf space. With iTunes, if you run out of room, you just plug in a new hard drive. So everything can be in there, and it doesn’t hurt anything else. So people that talk about, “All this other music in the world is causing other music not to sell,” with all due respect – bullshit. If your music isn’t selling, having half a million less tracks on iTunes isn’t going to cause it to sell.
The other thing that occurred had to do with inventory. It used to be that if you wanted to sell 100,000 copies of something, you had to manufacture 100,000 copies and then hope to God they sold. Now you don’t have to manufacture anything. There’s no upfront cost for inventory. You have infinite inventory that replicates on demand as a perfect digital copy. It’s always in stock, it’s always available, and it’s always ready to be bought and duplicate itself. So with unlimited shelf space and unlimited inventory being the new way record stores stocked music, you just circumvented and dis-intermediated the music distribution system. You don’t need that big warehouse with the pick, pack, ship and so-forth.
And it became much easier to become a music distributor, because all you needed to do now to become one was to get a contract with a store like iTunes. Once you got that contract, you could deliver the music to them via Internet, moving the digital file from Point A, to Point B. The contracts are hard to get, and they’re not given to just anybody, but distribution got wider as soon as digital stores popped up because for the first time you began to have music and artists and labels gain access to distribution and be available in stores to be shared or discovered or bought where they were never there before. But even that had a limit to it, because the digital distributors that popped up also made money when the music sold under that model that I previously described. And if the music didn’t sell, then they weren’t making any money, and if the music did sell, they made an unlimited amount of it off of other people’s hard work. If you’re a band, you go out, you play a gig. Someone sees you, and they go out and buy you. Well, if you went through a digital distributor that takes a percentage of the money, when your fan buys your music through your gig, you just paid 15%-30% of it to somebody else.
I had a real problem with that back-end model and with the distribution fee in the digital world. I didn’t think it made sense. I thought artists were getting screwed. I really did. And I got really pissed off. So when these people came in and told me how they would do spinART Records digital distribution and control our rights and take an unlimited amount of money, and control the collection of it and so forth, frankly, I told them to go f*ck themselves. It was wrong. We had just at that point released a band called The Dears, and I put $50,000 into tour support and $100,000 into cooperative advertising. The band was sleeping on floors and eating ramen, and we were all busting our asses. And I’m going to give this company over here 15% of the money from the sale of the music for moving a digital file from Point A, to Point B? They did claim they were going to market and promote our stuff, but that’s all smoke and mirrors. You can’t actively market and promote 10,000 releases per month, which is what they claimed to have. You can’t.
Glad you said it out loud…
JP:
Not only that, but when I pointed that out to them, they said, “Well, no, we’re going to prioritize spinART’s releases.” And I said, “Really? So you’re going to f*ck everyone else and just promote me?” And they said, “No, no, that’s not what we meant.” And I said, “Well what did you mean?” And they said, “Well, we only get to market and promote those releases that are doing well.” So I said, “Oh, so you’re going to market and promote things that are already marketed and promoted?” So I thought, “Not to mention this is an unlimited amount of revenue coming in off the sale of this music for the entire five years, and you’re going to stop marketing and promoting – if you’re even doing that in the first place – within a couple weeks.” And marketing and promoting in the digital world, really, to be honest is, you pick up the phone and you call the guy – there’s one of them – at iTunes..
So that was that, and I got so incensed about it that I literally picked up the phone in October of 2005, and I called my friend Gary that I worked with at eMusic. He was a coding engineer there. I said, “I have this idea. Why don’t we create a website where anyone on the planet can go – anyone, with no filter – and they can just go there and sign themselves. They can have worldwide distribution, they upload their music, they upload their cover art, they pick the store they want to go to, and they pay a simple up-front, flat fee for the service. That’s it. They get 100% of the revenue when the music sells, it’s non-exclusive, they can cancel whenever they want, but we’ll help get them there. ‘Where do you want to go? You want to go to iTunes? Great. You click a button and go to iTunes and pay the up-front flat fee, and that is it.’” I almost say it’s analogous to Federal Express. You pay a postage fee to deliver a package. That is it. I am a service industry, and I’m serving the musician. Technology has made it possible to have infinite shelf space and infinite inventory, so let them all in! No more filter. Do it under a service model. Serve the musician.
That was the idea, and we launched January 26, 2006. Four years later – and this is kind of weird – TuneCore artists represent one of the highest revenue-generating music catalogues in the world. There were over $32 million in digital download revenue generated through TuneCore artists in 2009 alone.
Put some kind of framework, because generally speaking I’m a guy who, $32 million and pretty much anything over $5 million is lottery winnings that I can’t even fathom. What is that compared to any of the big four labels?
JP:
TuneCore artists, or TuneCore as an entity by market share, is the fifth largest music entity in the world. It goes Universal, Sony, Warner, EMI, TuneCore, in regards to market share, in regards to number of releases and amount of revenue generated solely off digital sales. Within four years, this entity – which is sort of the democratization of an industry – represents everybody else, that long tail that apparently people claim has no value, or claim aren’t “breaking” on the Internet actually does and has become a monster force. It’s exciting, and it’s not just 50 million people selling one song. It is hundreds of thousands of artists selling tens of thousands of songs.
While we’re here, and mind you Tommy (Tom Silverman) went out on a limb and set out a certain criteria of, of albums released in 2008, there were only twelve that sold 10,000 or more according to Nielsen. Now, Nielsen has never been 100% accurate, and I’m sure that as people like yourself have democratized the artist, getting their music everywhere, it’s become even less accurate. But, by whose criteria – whether you agree with it or not – how far off was he?
JP: I don’t know how to answer the question, because people don’t buy music by the album anymore. They buy music by the song across the artist’s catalogue. For example, Never Shout Never has three four-song EP’s. And across those three four-song EP’s released within four months of each other, they sold over a million songs. That’s not album sales. That’s song sales across a catalogue. It’s not even the right question anymore. I struggle with it because it’s like, “What does that have to do with the price of tea in China anymore?” It has nothing to do with it. Suggesting a band is or is not breaking because they did not sell an album is insane.
I think the most interesting thing about what resulted in the debate was that the one criteria, which was in fact the standardized one doesn’t hold the water it used to for sure.
JP:
Nielsen is a great company. And SoundScan, which is now a Nielsen-owned property really was the litmus test. If Nielsen indicated through SoundScan sales – after 1992 when it actually became institutionalized and moved off the handwritten Billboard chart – it really did represent accurately those bands that were “it” and that were breaking and relevant. It reflected the popularity of an artist, because the popularity of an artist was reflected by album sales. The two were together. What’s happened now is you’ve had a decoupling between music sales and fame, or between album sales and fame. You can have people more famous and more popular than anybody, going back to – and let’s ignore the Beatles for a moment – Sponge, or The Bloodhound Gang, who were literally at the top of the Billboard Charts. Sponge if I remember correctly was one of the most played songs on commercial modern alternative rock radio, yet by today’s standards they were less popular and less famous than Nevershoutnever. The reason for that is specifically because the Internet has enabled people to get that fame, which is then monetizable on a global basis from their bedroom. And there is no editorial filter, and there is no gatekeeper from allowing people access, and then social networking picks it up from there. That’s what’s so cool.
I’m not trying to sidestep the question. I just don’t know how to answer it. I wouldn’t say an artist is or is not breaking predicated on album sales, because that’s just not what people do anymore.
—–
Part two of this interview will run in the next few days. In the meantime
Check out Tunecore at http://tunecore.com
