MUSIC INDUSTRY BLOG

Five months ago, I began working with Audiolife, an exciting company at the forefront of the Direct-To-Fan revolution.

Direct-To-Fan is a popular business model adopted by independent artists.  As the name suggests, artists cut out the middlemen (labels, distributors, retailers etc.) and promote and sell their music directly to their fans.

Radiohead’s release of In Rainbows and Nine Inch Nail’s release of Ghosts I–IV are popular examples of the Direct-To-Fan paradigm.

There are many benefits to Direct-To-Fan.  There are many challenges too.  Audiolife provides both the technology tools and the product fulfillment solutions to make Direct-To-Fan possible and affordable.

There are a handful of other companies with a Direct-To-Fan approach, including Topspin, Bandcamp, and Nimbit.

I want to ask you this:

If you’re doing it, is Direct-To-Fan working for you?

If you’re not doing it, what’s stopping you?

Please add your comments here.

Two weeks ago, Panos Panay, Founder and CEO at Sonicbids, announced that 10,000 Sonicbids members will receive their part of $4 million of unclaimed digital performance royalties collected and distributed by SoundExchange, the non-profit organization that collects royalties from satellite and internet radio.

Sonicbids members can check if they are on the ‘list’ and how much is owed to them by logging into their Sonicbids account.  If they are on the list, they must then register with SoundExchange to claim payment.

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“Inattention, hyperactivity, and impulsivity are the key behaviors of ADHD.”

I was diagnosed with ADHD (Attention Deficit Hyperactivity Disorder) at the age of 16.  I don’t presume that music listeners at large suffer from it but rather draw the comparison to the syndrome due to the endless choice and ease of switching from one piece of music to another ? impulsively.

With terrestrial radio, I can always ‘turn the dial’ but I’m otherwise passively engaged.  As I’m no longer willing to be spoon fed music and advertising by terrestrial radio, I consume it interactively online or via cable or satellite.  I listen to whatever I like, whenever I want, on any device I choose.

Consequently, I’m busy running my music applications and managing my playlists instead of sitting back and just listening.  I’m the DJ.  I’m the station.  I’m not listening like I used to because I’m busy broadcasting to myself…  rating, sharing, editing, remixing, collaborating, plugging in, adding plug-ins, logging off, connecting elsewhere.

I’m not sure that this is a good thing for someone with ADHD.

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By the end of this year, the TuneCore Artist catalog will have earned over $30,000,000.

This means that there is a song selling by a TuneCore Artist on iTunes every second.

Currently, TuneCore distributes between 150 – 250 releases a day.

I went head to head with Jeff Price, President of TuneCore, to find out how he created the world’s largest distributor of music in only four years.

“Music distribution is what we do, and we do it better than anyone else”, Jeff started.  “We are the first place music stores come to get the music and we pride ourselves on this.  When we launched four years ago, we got to change the world: For the first time in the history of the music industry, anyone could ‘sign themselves’ and get worldwide distribution of their music while keeping all their rights and 100% of the money from the sale of their music.  That was a game changing paradigm then – and still is today!”

TuneCore recently announced a partnership with Universal Distribution (Interscope, Universal Republic, Island Def Jam, Motown, Geffen and more), bridging the independent music market with the most sought-after music catalog in the world.

“This was a deal I did solely to provide artists with more options.” Jeff comments.  “In a nutshell, in addition to regular old TuneCore.com, we will also be hosting and serving websites for Universal labels that provide artists with distribution while taking none of the artists’ rights or revenues.  If an Artist chooses to get their distribution via one of the label portal sites (as opposed to TuneCore.com), they will have a direct line into that label.  This means the label will be aware of you, have heard your music, be up to speed on the success you are having, etc.  The label can reach out to you to offer more marketing, promotion, physical distribution and anything else.  If they do, the artist can choose to talk with them, tell them no, tell them yes, tell them they will get back to them or simply decide to continue to do what they had been doing to that point in time.  All the options.  No strings.”

From physical distribution via 215 Guitar Center stores to media widgets that distribute TuneCore customers’ content across the social web, TuneCore has made a name for itself by providing dozens of opportunities centered on the most accessible and competitive music distribution model of our time: Flat Fee. No Commission.

Not distributing your music with TuneCore?  Start now with a 30% discount!

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Audiolife, an innovator in direct-to-fan eCommerce, has entered into an exclusive licensing agreement with LA-based Hopeless Records, renowned for acts such as All Time Low, Avenged Sevenfold, and Thrice.  Audiolife’s comprehensive “on demand” digital and physical eCommerce solution will provide Hopeless Records with a robust merchant facility for its artists’ music and merchandise sales as well as all-encompassing and real-time analytics and sales trends.

From a press release published on the 1st Oct 2009:

“Working with Audiolife was an easy choice. Our fans are interested in digital content and sharing that content with their friends,” remarked Ian Harrison, Director of Marketing, Hopeless Records. “The Audiolife technology makes this possible very quickly. Within a day, we can post an artist’s branded store on their website, blog, and all social networks, and can deliver all of their merchandise, digital albums, and ringtones directly to the fans. We are looking forward to the many amazing opportunities that Audiolife has created with their eCommerce solutions, and are excited about the future.”

Added Brandon Hance, Founder & CEO of Audiolife: “Hopeless Records is the first among many indie labels who will integrate our technology into their artist marketing and promotions initiatives. We are confident that their leadership in the Direct-to-Fan space will give others the proof needed to launch their own eCommerce solutions for the thousands upon thousands of indie artists looking for alternative ways to monetize their careers.”

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Labels aren’t doing very well at the moment.  In fact, they’re darn right horizontal on their deathbeds.

People don’t want to pay for music anymore.

Children are being sued for copyright infringement.

Every digital music startup in the last three years has flopped.

It’s grim.

Yet there’s never been a better time to start a label.

Go ahead, sign a few acts – no one else will.

Nobody expects an advance or a fat tour bus.  It’s budget airlines all the way.

Invest in talent while it’s cheap and ubiquitous.

Don’t know how to do it?  Plenty of executives out of the job.  Go talk to one.

Four tips to get you started:

1. Quit your day job. Nobody will take you seriously if you’re doing something else 9 to 5.

2. Stick with what you know. If you lack people skills, avoid public relations.  Focus on your strengths and, when you can, develop or outsource your weaknesses.

3. You’re in business. Act that way.  Get organized.  Lots of stupid people own hugely successful businesses.  You too can create a successful business.

4. Pick great acts. Treat them well.  Work hard for them and they will show you returns.

Music is a safe bet.  There will always be money in it.

Now go make some!

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Music Week published interesting findings on music consumption from a study conducted by The Leading Question/Music Ally, arguing that digital access to music is not a substitute to ownership but rather a gateway to it.  It appears that users of digital subscription services such as Napster and Spotify spend approximately 30% more on CDs and MP3s than the average music consumer. Furthermore, according to the report, 73% of music buyers prefer CDs and 23% of the filesharers surveyed burned CDRs.  Perhaps there’s still hope for music-as-a-product?

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Following Radiohead’s example, Alice in Chains are giving away the first single, “A Looking In View”, from their latest album, “Black Gives Way To Blue”.  The much anticipated release was preceded by a number of videos of the group fooling around in the studio.  Get the single here.

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ReverbNation has officially launched the much-anticipated Sponsored Songs Program previously covered on this blog and, with that, revealed the sponsor behind the initiative: Microsoft Windows.  1000 handpicked ReverbNation artists are being featured on www.MySpace.com/Windows from June 24 through September 24, 2009 and their songs will be available for download for free.  Participating artists will be compensated by Microsoft for every free download to the tune of $0.50 in exchange for a Windows advertisement embedded on the digital artwork.  The three-way partnership is a potentially break-through digital distribution model, providing corporate brands with the means to tap into new, music-centric audiences and creating a fund for independent artists to finance their marketing and distribution activities.  If ReverbNation can find a way to scale this idea (i.e. bring on board more sponsors) and roll out consistent promotions, I am confident that indie artists from every musical sphere will be lining up to get on board.  While I’ve come across some cynics since the launch, I fail to see the downside.  Here is Microsoft’s point of view.

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