Search Results for: music industry

After perusing FMC’s web site I recently came across an article touting the impending greatness of cloud computing’s effect on the music industry namely in the form of Spotify.

While the article notes “streaming of music from the cloud could be one of the missing puzzle pieces for which the music industry has been so desperately searching” and highlights some great positives of streaming services like Spotify, I’d like to point an obvious fact: streaming has been around for years.

If streaming were the answer to all of the music industry’s problems, quite frankly it would have already solved them. While Spotify is definitely a convenient way to listen to music on computers, phones, and media devices equipped to access content over the internet, it is still limited despite claims of having your music anywhere, anytime, on any device. What if you’re on a plane? What if you’re on the subway? What if you have AT&T and get terrible 3G reception despite having an awesome, more-than-capable device like the iphone? (SLAM!)

It’s also a fallacy to say the problem with the music business model can be solved by fixing its distribution method – this isn’t the case. Labels are still trying to grasp hold of sales to a broad consumer base and ultimately this doesn’t work. Ideally labels need to focus on licensing (publishing) and using the music as a promotional tool to drive concert and merchandise revenue. Spotify does NOT change anything about the music industry itself. It merely offers another, quite similar, not totally accessible platform for the consumer.

What should be kept in mind by everyone trying to revitalize the monetization of music is the value of the music no longer has anything to do with the format on which its presented, but in the experience and association the music provides the listener. Thus the thinking should be: Who is a more profitable consumer and how do I reach them?

Finally, who is the streaming method good for at this point in time? For the consumer its decent unless you’re traveling by plane, subway, or generally don’t get a good wireless connection. For labels it could go either way but historically labels have not taken advantage of technology and furthermore have spent large amounts of cash to either avoid it, or even exploit it, with little to no success either way.

It’s great for Spotify…

What about independent artists? As far as I know there isn’t much in place that helps out the little guy – though I could be wrong as I’m not able to use Spotify here in the US. Device manufacturers will probably see it as just another tool to use to get people to buy or use their devices – not terribly powerful, but not harmful either.

Ultimately Spotify, while a great service, is probably not the answer to the music industry’s woes. As wireless becomes faster and more prevalent, and as the music industry begins to bend and re-shape itself, the opportunity is definitely there and I could be chowing down on these very words in the near future. So perhaps something better than another paid subscription service or ad-revenue model will present itself as a result of Spotify’s efforts, but both Spotify and the music industry still have a long way to go.

Today on my twitter feed popped up the typical slew of music industry news and something really caught my eye. Hip Hop Press had a release about a new service for artists (independent and otherwise) called Nimbit.

Nimbit is a service that attaches to an artist’s facebook page and allows them sell their music, merchandise, and tout their tours directly to their fans. After registering for the service myself (just to check it out) it comes off as very easy to use and understand and offering a plethora of services crucial to fan-base development.

For instance, all within one web interface an artist can upload and make available their songs for download, sell t-shirts, get their music distributed digitally through major carriers (including iTunes and eMusic), and perhaps the most cool thing – monitor who is buying what.

That last bit may be well worth the investment for a savvy artist looking to target specific demographics, or perhaps even use the data to bring to a network or ad agency for use in synch for a particular product or TV show. For more info on the services offered and fees related to using the service you can click here.

This service is a fantastic way to expand and track a fan base and an excellent example of how artists viewing themselves as a brand – rather than some commodity looking to get picked up and sold by a major entity – can be put to work effectively.

Finally artists have a tool that allows them to independently market themselves and not rely on record label and music publisher budgets and schedules for exposure – even if they’re already signed!

Recently Glenn Peoples tweeted a really interesting article in the New York Times which is an excerpt from a book called “Ripped” by Greg Kot.

The article emphasizes the drastic change in business practices in the music industry in the late 90’s and focuses on a new business model of streamlined consolidation and capturing more market share. He paints a picture of an industry so intent on making a quick buck on a single that artists are left to flounder undeveloped – never finding their true sound, or voice.

While I definitely agree that the music industry’s focus has almost nothing to do with developing artists and making artists money (and some may speculate that it never did in the first place), I think Mr. Kot potentially overlooks another element of business completely ignored by the music industry – selling music.

Sure it seems utterly fundamental: use a collection of music to generate income by selling music at a fair price, use the music to drive people to concerts, and use the concerts to sell merchandise while using artist popularity to get the music licensed in media. But let’s take a look at what the gurus in the music industry did instead.

First, they continued to collect songs and sign artists throwing cash advances at them. So far, so…average. There’s nothing new about this, but it is one way to add to your catalog. Second, price CDs (as Mr. Kot mentions) into the stratosphere so no one buys them. Third, drive up ticket prices to concerts and merchandise at those concerts, eliminating any interest by anyone but the ‘true fans.’ And third, completely ignore the burgeoning internet.

Oops. The last time I checked CEOs were supposed to be good at business, yet we found the record labels almost ignoring the internet, and then with the advent of Napster, turning against it entirely! How utterly insane.

Now we get to the good part. The music industry at that time (and still today) is over run by lawyers (I’m sorry did I say CEO’s earlier? Probably should’ve said JD’s). Because the industry is run by lawyers instead of businessmen (and heaven forbid someone who can play an instrument), the focus becomes less on how to make money with music, but instead how to make money with lawsuits.

Then Steve Jobs creates iTunes.

Now the funny part about iTunes is that the labels signed on…which is kind of silly. You’d think the labels might’ve looked at Napster and said “hey, why don’t we create something like Napster where people could download our music with permission but pay for it!” But they sued Napster instead rather than seeking them out for ideas about how to use the service to benefit everyone (because I would argue that the chances that artists saw very much money from any label-led lawsuits are very, very slim). And Steve Jobs, instead, said “gee, that Napster is a pretty great idea, why not monetize it legally?”

So while Steve Jobs has started to cash in on intellectual property (which is kind of the point of the entirety of the music industry), the labels start to tank. Why? Because their business model completely and utterly shifted. They weren’t focused on selling music, they were focused on lawsuits. They are STILL focused on lawsuits. They completely have no idea how to exploit the benefits of today’s technologies…they only know how to sue people.

Let’s put it in a real world scenario. Imagine you have a friend who writes and performs songs. And that friend manages to make a YouTube video that generates a lot of hoopla and they get a modest 5,000 hits. Not so bad, right? Now imagine if your friend said “gee that’s a lot of people listening to my music…I’d better pull it down since they’re not paying me for it.” How much money has your friend generated from their popularity? Oops.

Suppose that friend instead said “cool, I should upload two more songs and put my Twitter address and MySpace page on there which mention where and when I play live.” How much greater is their potential to make money now?

So while the labels could and should definitely start focusing more on artist development, or heck, even signing artists that ALREADY developed (don’t get me started), they also need to turn around and exploit those artists properly – something they continue to fail to do year after year all the while wondering what on EARTH they’re going to do about this pesky internet and hungrily looking for the next big lawsuit.

I don’t really work in the “music industry.” I work kind of along side of it. Every so often, someone who has no clue what my company does decides to send us a demo of their CD. Typically we listen to them, have a laugh at how terrible it is, and then throw it away.

I got this one yesterday. It is quite honestly the funniest letter I have ever read. But not because of the poor grammar and obvious Miami-like language skills. But because it appears that he had his 6 year old brother write it for him. I’ve left out his contact info and last name so, if you want to contact this guy…well if you want to contact this guy you should be shot.

And the head shot….

Yes ladies and gentlemen. The most preposterous untalented 9 year old ever…from 1986.

I only wish he would’ve included a CD of himself “singing” and “playing” guitar.

Doing my industry reading like a good music biz employee today I came across an article by Paul Resnikoff on Digital Music News. The article – “What Coachella is Telling Us” – speculates that the economics of the current festival/live performance aspects of the music business could be highlighting a trend: Fans discovering music online as freebies causing a drive upward in concert revenue. He mentions that even in the face of the current economic situation ticket prices are still soaring – and selling.

I’ve never been a proponent of artists giving away music in hopes that exposure will grow, however now that I’ve been at my job for 5 years I can definitely see some interesting prospects for acts that are starting to gain a somewhat significant following (we’ll say 1,000+ followers).

While Paul seems to indicate that bands giving away free music could maybe might just somehow lead to increased ticket sales perhaps, I’d argue that music should still never be “free.” However fans can offer a value even if it isn’t in cold hard cash.

Bands looking to gain some sort of monetary value from their music can go about it in various ways and I feel one of those channels should definitely not be selling an album to the mass populous. Well, at least not at first. But what Paul suggests – giving music away can drive concert revenue – is actually getting close to not a bad idea. Let’s take it one step further though.

Value fans can give:

1) Free PR (Word of Mouth, Blogging, Twitter, etc)
2) Free Distribution (burning CDs, emailing files, etc)
3) Money (concert revenue, album sales, merchandise, etc)
4) Connections (Music supervisors, ad agency producers, etc)

I’m sure there are more but these are a good start. As a band on the cusp, I’d say the main goal is to generate money with music. That means doing two things: Live performances and Licensing. Fans can help do both though point 4 above is far less likely until points 1 and 2 have reached a tipping point.

After reviewing this info, a band might then post something on their website offering fans some sort of value (perhaps a few mp3’s or discount code for merchandise or concert ticket discounts) based on the following:

1) Email address entry (increase mailing list/following)
2) Material dissemination (some sort of referral program for the mailing list)
3) Money (naturally, paying for the tracks should always be an option – low cost at first of course. Also, buying them a track could earn them a discount on merchandise or concert tickets)
4) Professional introduction (I’m not sure exactly how this would work, but it could be a very lucrative opportunity for a band so the reward should be fairly high for the connected fan)

In all I think Paul definitely makes some valid points about how the industry is being more and more shaped towards live performances since that’s a great way to make money as a musician. However, giving music away for free, I think, is always foolish. Think about the value your fan-base can bring to you, and reward them for it – quid pro quo. Thousands of businesses do this already (Gilt Group, ING Direct, and more) and the sooner you start treating your music like a business, the faster you’ll start to generate income from it.