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.
Online streaming radio and music tastemaker, Jango, has launched a somewhat controversial artist promotion programme called Jango Airplay. Essentially a pay-to-play scheme [and reminiscent of terrestrial radio “payola” which has been illegal since the fifties], Jango Airplay provides artists and their agents a direct means of plugging their songs to Jango’s listener base of 6 million for a fee. Much like the StumbleUpon advertising initiative, displaying a sponsored web page for every nine unsponsored web-pages, the promotional value of this scheme is not absolute: “If you get 50 positive ratings, your song starts playing for free in general rotation on Jango. If your song continues to get good ratings, it will be played more and more often and in more and more stations.” For $30, Jango Airplay offers 1000 plays, each track linked to its distributor (i.e. Amazon, iTune).
Pay-to-play may be an unpopular paradigm among musicians but this is actually an unprecedented opportunity for artists and labels to reach a new audience and guarantee some rotation. For not much more than pocket change, bootstrapped musicians can gain some insight on who is most likely to listen to them, rate them up, and perhaps even purchase something. Assuming that Jango Airplay plugs sponsored tracks appropriately, this is a truly awesome marketing platform for the music industry.
Slicethepie and Bebo announced a co-venture this week whereby Bebo members will have the opportunity to grab the A&R seat at Slicethepie’s artist career-funding network. Strikingly similar in concept to Sellaband, Slicethepie is tapping into the leading British social network’s community assets while Sellaband remains very much an independent platform. The music “business” role-play idea has been embraced by a number of players in one form or another, including Songness, TheNextBigSound, and Soundout, a Slicethepie imprint, based on the belief that if potential fans are provided with both a true hand in an artist’s fledgling career as well as a financial incentive, consumer loyalty and word-of-mouth shall follow. Perhaps the shape of things to come.
Kyte, the San Francisco based company providing turn-key solutions for online and mobile digital content production, distribution and monetization, has announced the launch of custom iPhone and iPod Touch apps as a new means for music fans to access their favourite artists’ music, videos, news, and exclusive content. In a separate affair, 90’s rock group, Presidents of the United States of America, who made a name for themselves with “Lump” and “Peaches”, have just released their own iPhone app along the same lines. For $2.99, fans can stream the band’s entire catalogue over a Wi-Fi or cellular connection, as well as gain access to exclusive content and previously unreleased music. This is exciting music industry news! iPhone apps are hugely popular and provide an unparalleled platform for artists to access their audience and visa versa. It won’t be long before we see more and more artists, from megstars to indies, harnessing this technology to promote themselves, monetize their catalogue, and upsell associated initiatives and assets such as concert tickets and merchandise.
Trent Reznor, a music pioneer on more than one level, has paved the way for a new music business attitude through forward-thinking marketing concepts to communicate with fans directly and provide them with a reason to consume his music and come to his shows. In 2007, Reznor under the famed band alias, Nine Inch Nails, prior to the release of the album, “Year Zero”, launched an online reality-themed scavenger hunt, intended to engage fans and deliver a unique user experience. In conjunction with this gaming initiative, Reznor dropped USB keys loaded with NIN music at his concert venue’s toilets for fans to pick-up and enjoy for free – and share. At the time, it was not clear whether the music was leaked by fans or by Reznor himself which spurred the RIAA to put up takedown notices, fueling the campaign even further. To make the album’s physical CD release distinctive, Reznor printed CDs that changed colour – a gimmick CD copies would not benefit from – to encourage fans to buy the originals to supplement whatever free digital content they may or may not have already had access to. After this episode, Reznor left his label and went on his own, beginning with the independent release of “Ghosts I – IV”. In this case, the 36-track album was offered to fans in a variety of attractive models, all under a Creative Commons license: first 9 tracks for free, $5 for all tracks plus a 40-page pdf booklet; $10 for 2 CD set plus a 16 page booklet; $75 Deluxe Edition Package (i.e. box set); $300 Ultra Deluxe Limited Edition Package, capped at 2500 units all signed by Reznor himself, which sold out in 30 hours. Collectively, Reznor grossed $1.6 million in the first week from this independent initiative. The album later became a number one seller on Amazon in spite of its attribution license which made the digital sharing of it legal. Reznor’s following album, “The Slip”, was offered entirely for free two months later along with sample tracks from NIN’s opening acts. All you needed to do is punch in your email address. Again, Reznor provided a unique fan experience, along with a visual depiction of the volume of downloads by location on Google Maps and a full tour venue listing and ticketing options. The tour was a huge success.
Starting at approximately $1000, emusu provides a turn-key solution for managing and selling your digital assets from your own domain, as opposed to distributing to third-party ecommerce websites or via social network applications. The system is entirely web-based and the company is sinking its teeth into the music industry. Ouch.
The service allows its customers to create custom web pages from a series of handy templates and enable fans to buy directly from the source or incorporate its technology into an existing site geared for music retail.
The fact is that most artists simply don’t sell. In fact, most labels don’t sell a volume of any note. As such, even if the service was free, managing your own music sales is not too far up your priority list unless you’re shifting so many units that iTunes’ commission significantly diminishes your bottom line. Furthermore, if MySpace, boasting approximately three million *active* musician users can’t make Snocap work on exclusive terms, how is emusu going to convince prospective clients that they can sell – and sell more – on their own?
At a time where the industry is shifting away from record sales and toward ticketing, merchandising, bundling, licensing, sponsorship, and advertising, emusu is a surprising entry into the space. Selling recorded music is no longer the end game but rather the marketing collateral to sell something else. The infamous 360 deal is a tribute to this strategy and Live Nation is a testament to its success. Starbucks too.
However, if emusu can leverage its platform to forward thinking megastars such as Radiohead or Nine Inch Nails, both of which ’sold’ direct-to-the-fan, they may have a lucrative client. Or two.
A citizen of the United Kingdom, Don immigrated to the United States from Australia, where he jump-started his career by doing record promotion for several labels, including Chess and Capitol Records. During that time, he was involved in the promotion of The Beatles, and was singularly recognized with the only Golden Apple Award ever presented by them for “outstanding promotion in launching Apple Records in the United States”. At Capitol, Don was also Manager of International A&R/Promotion, where he signed Little River Band, and Director of Merchandising and Advertising. When Capitol created a second label, EMI America Records, in 1978, Don became its Vice President of A&R. His credits at EMI America include Michael Johnson, Kim Carnes, Sheena Easton, Kate Bush, Sir Cliff Richard, J. Geils Band, and Kenny Rogers. In 1982, Don moved back to Capitol where he signed and helped guide a number of hit-making acts, including Heart, Joe Cocker, Freddy Jackson, Melba Moore, Steve Vai, Megadeth, WASP, and George Clinton. He was personally involved with the recording careers of Tina Turner, Bob Seger, Anne Murray, The Motels, Duran Duran, Power Station, Thomas Dolby, Ashford & Simpson, Billy Squier, and assisted in the emergence of Crowded House, Poison, The Smithereens, and Great White. In 1987, Don resigned from Capitol to join CBS/Sony as Senior Vice President of A&R, Epic Records, where he personally signed and worked with such acts as Celine Dion (via Sony Canada), Bad English (finding their #1 hit “When I See You Smile”), Iron Maiden, Basia, as well as bringing his expertise to bear on the careers of Cheap Trick (finding their #1 single “The Flame”), Cyndi Lauper, Gloria Estefan, REO Speedwagon, The Jacksons, and Europe. Under his direction, the Epic A&R staff also signed successful acts, including Living Colour, Indigo Girls, Allman Brothers Band, Alice Cooper, Social Distortion, Firehouse, Suicidal Tendencies, Front 2423, Ottmar Liebert and Joe Satriani. In 1993, Don created Drive Entertainment, a company with emphasis on classic artist and niche market catalog exploitation, where he compiled and packaged over 140 albums. Five years later, Don chose to reenter the broader-based music market and, to date, operates his own independent consultancy and music supervision company. We Are Listening is delighted to have Don on board!
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.
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