MUSIC INDUSTRY BLOG

Terry McBride’s Nettwerk Music Group, (home to Jamiroquai, Barenaked Ladies, and Sarah McLachlan), live music and media behemoth Mama Group Plc, and Brian Message’s ATC Management (manager of Radiohead, Faithless, and Kate Nash), combined forces to create Polyphonic, a new artist investment and development company embracing the 360-degree model, Music Week announced yesterday.  The company has committed more than $20m for its first year of operation, marking significant additional capital thereafter, to provide “an important funding option for artists” asserted Brian Message adding “ATC and Mama have co-invested in a number of new artists over the last three years and Polyphonic marks the next iteration of that business. Now, together with Nettwerk, we want to be working with a much bigger group of artists and managers and the capital we have available makes that achievable.”

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In a thought-provoking post on the MidemNet Blog, Peter Jenner, President of the UK’s International Music Managers Forum (IMMF), explores the personification of music piracy, underscoring key distinctions between ‘piracy’ and ‘theft’ that have largely been ignored or rejected by the music industry and, perhaps, even concealed to a pragmatic and moral music sharing public.

“If you steal my money I don’t have that money anymore.  If you copy my music I still have it, and so does everyone else who has it.  No one loses anything, the supply of copies just increases.”

Read the entire entry here.

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ArtistForce, an online CRM solution and marketplace for the entertainment industry, made a controversial appearance at SXSW with a racy promotional campaign involving a hot blonde in a liquid latex sheath passing out flyers with “Thousands of artists get screwed every day.  Protect yourself with ArtistForce.com” printed on them and attached with complimentary condoms.

Founded in 2006, ArtistForce provides an online environment for entertainment industry professionals and talent to conduct negotiations directly, manage their business administration, track activities, and more, through proprietary technology applications and consultation services.

Audiolife is an LA-based artist services company founded in 2005 by three USC graduates.  Their mission is “to create a middle-class in the music industry by giving all artists simple tools to generate revenue so they can spend time on what they love and do best – make music!”.  Currently in public beta, the company announced this week that it will be accepting submissions for its “Artist Advancement Scholarship”, an initiative geared toward college level music school students, artists and otherwise, in pursuit of a professional career in the music industry.  Don’t let the inclusion of the word “scholarship” fool you though; this is a writing exercise where $500 cash is on the table for one winner, not a scholarship application to potentially finance your future academic studies.  I imagine that Audiolife is seeking to achieve two things with this campaign, the first is to establish the company’s perceived value and, the second, to  draw more users to learn about their offering by writing competitively about it.  Personally, I would prefer to reward the best ten applications with $50 each and use their essays as original content on the site to raise Audiolife’s natural search ranking…

Applications must be received no later than 11:59 p.m. PST on April 1, 2009, in the form of an essay addressing the question, “How do you see Audiolife affecting the music industry in the next two or three years?”, in 1000 words or less.  Students in any accredited academic university or music institution enrolled at least part-time during the 2009 academic school year are eligible.  A winner will be selected by Audiolife’s management team and announced by April 20th, 2009.  Essays should be emailed to Travis Dean at travis[at]audiolife.com

Stephen Budd, a council member of the Music Manager’s Forum and founder of Stephen Budd Management, the producer management agency which looks after one of We Are Listening’s esteemed panelists, producer KK (Bjork, Dido, Nelly Furtado), commented on the devaluation of professional music producers at a summit of music producer managers in London this week.

Budd, and his peers, are calling for change in producer agreements due to unreasonable expectations and progressive devaluation of producers’ work, often subject to “on spec” agreements where the financial risk rests on the producers’ shoulders and their agents, no less.

The summit represented a concerted industry effort to brainstorm new business models to ensure the futures of professional producers through a restructuring of royalty shares in a number of areas where producers are professionally and creatively involved.

The digital media age has brought about a new breed of music marketing professionals armed with next-generation music marketing tools and savvy.  Cheap and, often, free online music marketing solutions are at the disposal of anyone with an internet connection.  However, today’s music marketing leaders are not your average Joe’s.  Dare I coin the term: music marketing Joe 2.0?

Budding young marketers are spending more time finding and sorting through information online – looking for patterns, clues, leads, characteristics etc. – that will help them learn more about their target audience and build relationships on behalf of their clients, as opposed to wining and dining with label executives.  Sad really, but music marketing is a different game now.  A decade ago, artists were still ‘enjoying’ the luxury of a label financed focus group and the gut feeling of the music managers at the top.  Today, they’re either getting feedback themselves from social networks or fortunate enough to have a music marketing wizard on their team to do the dirty work for them.  In other words, independent artists have been forced to become promoters and professional artists (i.e. financed artists) outsource to music marketing specialists as opposed to relying on old school record industry tactics.
Although the revenue pyramid still looks the same – a handful of megastars at the top,  a long tail of independent artists at the bottom – new digital media has leveled the playing field and empowered fledgling artists with music marketing solutions only the megastars had access to but a decade ago.

Typically, an artist manager receives 15% – 20% of the artist’s Gross income or 50% of the Net income.  I personally like the 50/50 model.  15% may not sound like a lot but keep in mind that the artist is responsible for expenses and if the artist is a four member band, you can guess who gets the biggest piece of the pie.  The artist manager is often the primary reason why the artist sees any money in the first place.  As such, a good artist manager deserves to be rewarded for his efforts, expertise, contacts and, above all, risk.  Besides, 15% – 20% of the gross is often the same as splitting everything down the middle.  In addition, the artist manager may negotiate a commission based on new deals he closed during the course of his relationship with the artist.  This is to protect his investment long after the contract has terminated and he and the artist have gone their separate ways.

A no-commission management deal, whereby the artist pays an artist manager or management firm a salary or ‘retainer’, is a relatively new contract model in the music industry.  The artist has the power to hire, fire and negotiate with his management.  The artist manager has a certain degree of ‘job security’ but can not reap the rewards of a huge commercial success.  No points.  No success fees.  Simple.  And the artist is in control.  This is similar to the way PR companies operate and charge for their services.

At the negotiation table, the terms of the deal, regardless of the type of payment model, should be in light of the degree of financial risk the artist manager is expected to undertake by the artist in the event that the artist can not pay upfront.  Considering that financial institutions define the terms of a loan by assessing the degree of financial risk, it is reasonable to expect an artist manager to be compensated based on similar projections.

Musicians typically hire music managers (also referred to as artist managers, band managers or, if they work beyond the sphere of music, talent managers) to oversee the creative and business aspects of their careers. Traditionally, music managers receive a commission anywhere from 10% – 20% of their clients’ gross income as opposed to a monthly retainer for their services.

Whereas some music managers are very much regarded part of the “family”, taking the managerial role because they were close to the artist or band from the beginning (and no one else wanted the job!), others are actively pursued for their music industry connections and business acumen.

Renowned music managers include Brian Epstein (The Beatles), who persuaded George Martin to listen to an early demo by the group; Paul McGuinness (U2), who has been with the group from the start of their successful career and also manages PJ Harvey, Art of Noise and several others; Simon Fuller (Spice Girls), also famed for his reality-driven Idol series across the world; Lou Pearlman (Backstreet Boys), who, aside from his music questionable music industry accolades, was exposed in 2006 for perpetuating one of the biggest and longest running fraudulent investment operations in American history.

Successful music managers have a keen sense for hiring the right booking agents, radio promoters, lawyers and other team players, and making new connections that may lead to new opportunities for their clients. Traditionally, music managers were most valued for their ability to put their clients’ demos in the hands of A&R executives at well financed record labels and negotiate the terms of record contracts. Since the convergence of music media with digital media, their role has changed somewhat and a new breed of young, dynamic music managers are emerging with extensive know-how in internet and technology marketing tools, allowing their clients to compete for attention on the web more so than on the ground and make their music available directly to the consumers without the aid of a label or distributor.

Geffen Records has opened its doors for online submissions for the soundtrack of the upcoming film, Bratz. The major motion picture, a co-venture between MGA Entrertainment, Avi Arad Productions and Crystal Sky Pictures, is expected to hit the box office across the US on August 10th via Lionsgate. The music supervisors are accepting and reviewing submissions until May 15th.

Details: www.bratzsoundtrack.com

SonyBMG UK introduced a blogging initiative in an effort to dispose of unsolicited physical material being sent to their labels. In partnership with social network destination,Vox.com, the second largest music company in the world is set to jump on the massive blogging trend and encourage fledgling artists to submit their material digitally in a free and open networking environment.

Chairman of Sony BMG UK, Ged Doherty, assures the musical public that online interaction between artists and A&R will be the order of the day and will diminish the likelihood of great acts being missed as a result of postal administration.

For those of you who know how hard it is to get your foot in the door of any label, let alone a major, this could be wonderful way to learn about label staff and get them to hear you. Due to the nature of this system, staff will be able to decipher between the good and the bad through public feedback and in an inter-personal environment. I can only imagine that every artist will want to be a part of this and the limited A&R staff will have their work cut out for them.

Is there an ulterior motive here? Well, perhaps this opportunity of being heard by the industry leaders is more of a hook to market existing acts on the label as opposed to discovering new ones. As the blog network ( www.rcademos.co.uk , www.colombiademos.co.uk and www.gedblog.vox.com ) is open to all, and the subscribing artists are unsigned, Ged and his team may not necessarily be the ones signing and, in turn, profiting from their discoveries. Either that, or they will need to act very quickly – not a trait generally associated with large corporations.

For any online music platform, getting a major label on board is big beans. Most musicians have websites, MySpace profiles, EPKs etc. in the hope that an A&R person will notice. Many online destinations promise to bridge the gap between artists and labels. Now, the initiative is coming from the labels themselves and exclusively to Vox – wow!

If the other major labels do not sensationalise their own online profiles and A&R prospects, and Ged and his staff discover and develop a star through this, we may find ourselves with the most popular music blog of the decade.. but I doubt it. There is a certain lack of charisma about the whole thing. See for yourself:

Ged Doherty for Sony BMG

http://www.youtube.com/watch?v=LreqFrCws3U

Mike Smith for Columbia Records

http://www.youtube.com/watch?v=qiUK3SEfYbA&NR=1

[i]by Lior Shamir[/i]