SONG CONTEST BLOG

I received an email this morning from Frank Mitchell at Aderra Inc., a company that specializes in the recording of live events through the use of USB flash drive wristbands that are immediately available for sale after an event takes place.

Frank writes:

Briefly, Aderra allows an artist to generate additional revenue at their LIVE show by selling the show IMMEDIATELY after it happens by way of USB drive!!! Here is what our company and clients believe our services provide for music artists:

With CD sales down and Internet piracy aways prevalent, Aderra offers the artist the ability to capture and sell a concert immediately after it happens. We are able to reproduce 1,000 wristbands in under 15 minutes!!! Much faster than the CD burning capabilities of the past.

It allows the artist to increases their sound scan numbers as the drives can be pre-loaded with their NEW album.

We also create a vehicle to additionally connect with their fans as the USB drive has it’s own “user interface” that is custom built for that artist. To display band profiles, short videos, charity affiliations, etc…the sky is the limit for content!

In the case of a tour we allow sponsorship opportunities on the band itself, along with space on the drive for the sponsors.

If they are a new artist trying to get themselves out there, the drive can be used as their Electronic Press Kit (EPK).

* THERE IS NO UPFRONT COST FOR THE ARTIST TO PARTICIPANT. This means that Aderra takes ALL the upfront risk and the artist simply takes half the profits after costs are covered for the USB drives and technicians ($4 to $7 per drive). Typically the split is 50/50 depending on their status with their record label and in the case they need to include the label the split 1/3-1/3-1/3. No other company has this ability and as I said on the phone today we are seeing some tremendous interest throughout the industry. The price point that we have seen be successful for the USB drive would be around $20-$40 dollars depending on the artist.

Notwithstanding the fact that Frank and I did not, in fact, speak on the phone as he cited in the last paragraph and that this is clearly an unsolicited email, this is a poor sales pitch for a potentially excellent concert merchandising solution.I first came about the USB wristband solution for the live music sector two years ago at Popkomm, the annual music business conference in Berlin. I can’t remember if it was Aderra showcasing their product or one of their competitors but, either way, I was taken by the possibilities. Aderra’s pricing seems more than reasonable though I suspect that indie artists that draw a limited number of prospects to their shows will not be enjoying this service just yet.

The immediacy of this service is what makes it so powerful: the point of sale is, hopefully, the point where the prospect is still wrapped up in the show and ready to spend extra to take home the experience. The USB wristband is a fun, functional and aesthetic piece of merchandise, with both physical and digital value.

Something to watch out for.  Aderra.net

On January 24th, 2009, Kings of Leon will headline the Dare 2 Dream benefit concert at the House of Blues Chicago to raise funding and major awareness for pediatric cancer research and treatment. Platform One Entertainment, the organizer of the event, is giving one Sonicbids artist the opportunity to open for Kings of Leon and receive $1,000.00 for travel and hotel accommodations.

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.

The much-talked-about 360 music deals give labels the traditional percentage of CD and MP3 sales in addition to a cut of ticketing, merchandise, licensing, publishing, and sponsorship opportunities.

In the Web 2.0 Summit, Warner Music Group CEO, Edgar Bronfman, outlined that new artists will have to sign 360 contracts, and that about a third of their signed artists are under such contracts already.

Bronfman expressed that it’s is no longer feasible to pour money into artists when CD sales continue to diminish. Without a stake in the other aspects of an artist’s career, WMG will simply avoid going to market altogether.

TuneCore, the do-it-yourself digital music distribution platform, landed $7 million in a recent round led by Opus Capital. The company offers immediate access into stores like iTunes, and poses serious competition to existing indie distribution companies like CD Baby.

Artists can distribute their albums or individual tracks across a number of digital music stores for under $30, and keep the royalties, a model that has yet to be tried and tested by the major digital distributors on behalf of long tail clients.

CDbaby has been selling CDs online for the last ten years on behaf of approximately 250,000 independent artists, accounting for 4.5 million CDs and $83 million in sales revenues distributed to its clients.

Derek Sivers, CDbaby’s founder, interviewed on Venture Voice

MP3 metadata contains a large amount of searchable information, including the basics of a song: song title, artist name, and album title and artwork. Some artists take the time to include discography and biography details, as well as liner notes, lyrics, images, and anything that allows the digital file to be found, catalogued and, most importantly, relevant and a source of added value to the consumer. The successful distribution of digital files largely depends on the manner in which they are tagged.

“This is a very sad day for Pandora, and for me personally. Today we reduced our staff from 140 to 120 employees. Like virtually every company, Pandora is not immune to the challenges presented by the current economic turmoil. We are trying to react quickly and responsibly to the new environment…

There are tough times ahead for the economy, but our listenership is growing rapidly, the Internet radio royalty rate resolution seems finally near, and the explosion of mobile devices like the iPhone are opening up a world of opportunity for internet radio to expand off the desktop. Moreover, our ad sales are growing so well that, not only did we not make any reductions there, we need to continue to hire more.”

– Tim Westergreen, Founder