Getting The Music Business Over The 'But We Must Sell Music' Hump
from the it's-not-all-there-is dept
On Monday, I attended and participated in the always excellent twice yearly event, the SF Music Tech Summit. As always, it was a fun time, full of interesting people. While smaller than some of the big music events, pound for pound, I tend to end up in a very high percentage of fascinating chats with people at SF Music Tech. The panel I was on was the first in the morning, and was officially called "meet the press," even though at least two of the five panelists (myself included) don't consider ourselves press. I didn't mean to stir up much controversy (never do), but I apparently got a few vocal folks in the audience riled up on a few points. The one that got some attention on Twitter, was the claim that live music was growing. A few folks started screaming and no one then let me back that up, but the numbers don't lie. A lot of people came up to me afterwards with stories of success by focusing on live music, and I even heard from some folks who are involved in organizing live shows who say that the "complaints" about live shows tend to come from those who focus only on a subset of live venues that have struggled lately -- but that the overall live market is thriving (as the numbers show).However, there was a second point that I later tried to make that again I never had a chance to follow through on, and wanted to do so here. People were asking about what business models are working for musicians, and I started listing out some examples, and a loud gentleman in the front row yelled out that the business model that had to be at the center was selling music. I responded with what I thought was an important question: "Why?" and again people started yelling. Of course, no one answered the question, and then the panel shifted gears to another topic.
But, the reaction from the crowd on that question cemented for me one of the biggest reasons why some in the industry have struggled to grasp new business models. As I discussed in my NARM presentation a few months ago, selling music is just not a good business model, but it doesn't mean there aren't good, very profitable, music business models. It's just that selling music isn't a very good one. Instead, you need to learn to use the music (which still needs to be good, and is still the central reason why these other business models work) to sell something else -- something scarce, which can't easily be copied. That can be attention, access, time, creative ability, cool physical products, whatever. All of those things are made more valuable the more popular the music is, and you can build all sorts of powerful and immensely profitable businesses once you recognize that.
But if you still think that selling the music or making money directly from the music has to be at the "center" of any music business model, you're shutting yourself off to the largest opportunities out there. But, the thing is, music has always been a product that makes something else more valuable. While there was some disagreement on the panel from someone about how record stores were profitable in the 70s, that's a case where the music was making the vinyl (and later, plastic) more valuable. Today, it makes iPods more valuable. As the big box retailers know, it acts as a loss leader to bring people in to buy higher margin goods. Music is great at selling other, higher margin things. If you ignore that in the music business model, you're missing the big opportunity.
This isn't to downplay the importance of music, or say that the quality of music doesn't matter. It absolutely does. But the music is not the scarcity, and you don't make money off of selling something that's abundant. You use the abundance to figure out what other scarce goods it makes more valuable and you sell those. So, people can complain and shout all they want, but it doesn't change the basic fact that until you recognize that selling music directly just isn't a very good business model, you're limiting your market tremendously.
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Filed Under: business, music, selling music
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Sounds like a broken panel
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Re: Sounds like a broken panel
Not my panel. I was just a participant on the panel. And it was tough because it was a five person panel with a moderator -- so you had six people who had to have time to speak for a one hour panel, and we wanted audience questions. So, given the setup, hard to focus too much on any particular topic.
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Re: Re: Sounds like a broken panel
Good thing you have your own "panel" where you can finish the conversation.
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Rare --> Infinite
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Isn't "selling music" more than just a copy of the CD, or a concert ticket? I think it's great and important that an artist can "make a living" from their art, and I will always find it bothersome when an organization who's whole purpose is to "make a buck" is the one "defending" the old business models.
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Live music rocks!
Small, but intense audiences who appreciate these artists, are what makes a musician's live worthwhile. They get intimate feedback from their audience and the audience gets direct contact with the artists who enrich their lives. Yes, live music lives, and rocks!
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Re: Rare --> Infinite
Yeah, it's the old hunter/gatherer model that we seem to be largely stuck with. If someone hasn't really looked into the issue, their mental models are based on scarce goods (which are all we had to deal with for eons.)
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If you want to make music, make music. If you want to sell something else, sell something else.
Here's how to view the degrees of separation between music and income.
No degree of separation: Sell your music.
One degree of separation: Sell stuff related to your music.
Two degrees of separation: Use your music to sell other people's stuff (e.g. have your music in commercials).
Three degrees of separation: Write music to sell other people's stuff (e.g. write jingles and commissioned works).
Four degrees of separation: Play music. Use that as a way to promote your real profession (e.g., the singing plumber).
Five degrees of separation: Play music. Don't mix it with any money-earning activity. Keep your hobby and your income generating activities totally separate.
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Mike, once again you are bootstrapping and not telling the whole story!
First, the numbers are only for the UK, not the world. You cannot take a single market and blindly apply it to all other markets.
Second, there is no indication as to the number of tickets sold during this time. The UK has suffered some dramatic ticket price increased in the last few years, with acts like Bon Jovi almost tripling ticket prices from their last visit, and a number of festivals cranking their ticket prices through the roof.
Basically, while more live money is coming in, it isn't clear that any more fans are seeing live music, rather just that people are paying more for the same thing.
Also, the combined sales of music and live music is flat from 2004 to 2008 combined, which means that there music industry in the UK isn't getting any more money than that is was before.
Your bootstrapping is almost mind boggling at times, this is such an obvious attempt to take a small amount of data and turn it into some sort of massive fact.
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as I often say
Regardless, the concept of selling "music" as an....atomic entity... hasn't existed in perhaps forever.
Wish I could have made it up there for SF Music Tech and represented, but had just run a marathon and been away from home for a week :)
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Re: as I often say
Amen.
Wish I could have made it up there for SF Music Tech and represented, but had just run a marathon and been away from home for a week :)
Would have been great to have seen you there. Oddly, your major label colleagues were either missing or staying very well hidden. Surprised me since they usually at the event. I'm sure there were some major label folks there, but they were very much in the background this time around.
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I love people named Mike
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Mike rhymes with Mooo Cow. Work with me, people.
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I had a musician sleep on my couch for 4 weeks straight!!
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Re: I had a musician sleep on my couch for 4 weeks straight!!
I mean, must explain to you how all this mistaken idea of denouncing pleasure and praising pain was born and I will give you a complete account of the system, and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness?
Really now, No one rejects, dislikes, or avoids this pleasure itself, because it is pleasure, but because those who do not know how to pursue pleasure rationally encounter consequences that are extremely painful. Nor again is there anyone who loves or pursues or desires to obtain pain of itself, because it is pain, but because occasionally circumstances occur in which toil and pain can procure him some great pleasure.
Get over yourself. They're wrong and so are you.
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heh...
Basically, while more live money is coming in, it isn't clear that any more fans are seeing live music, rather just that people are paying more for the same thing.
Also, the combined sales of music and live music is flat from 2004 to 2008 combined, which means that there music industry in the UK isn't getting any more money than that is was before."
Perhaps that's the problem right there.. if ticket prices weren't 3x higher... more people could/would have attended... (there is a recession going on) more people = more alternative sales (tshirts, cds, concert posters, signed stuff.. etc) = more money PLUS more fan loyalty... more fan loyalty = more exposure to potentially new fans (word of mouth, p2p, etc) = more money (music sales, scarce goods sales, higher concert attendance etc)..
Again... the industries problems are due to basic greed and outdated business models... this is why there's no growth.. not 'piracy' or infringement or whatever the hell it is you want to call it..
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Also...
The licensing in most of the EU isn't as harsh/strict/costly as it is in the west (with a couple of exceptions, considering the UK is part of the EU, even though they like to pretend they aren't) .. live music is alive and doing well... not just small local groups.. but big names are constantly coming through.. and the ticket prices are reasonable (It cost me ���30 to see Iron Maiden a couple of years ago when they were here, saw Cradle of Filth for ���5, Type O Negative was ���20) and even with mainstream bands.. it's rare for a concert ticket to be above ���50 and those that are .. oddly enough... don't sell out (and often end up cancelling their concerts... *cough*Madonna*cough* ) ..
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errr
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Re: heh...
if ticket prices weren't 3x higher... more people could/would have attended
This is the incredibly stupid and greedy part of the whole "CwF" thing. Basically, because bands, management, and labels are no longer making as much money selling music recordings, they have to make the money up somewhere else. So they do live shows, and raise the price.
In very simple supply / demand terms, they can raise the prices until the shows don't quite sell out. It's one of the very nasty downsides of the whole concept, that ticket prices will be as high as the market will bear, literally pricing many fans out of the game. So if you want to see Bon Jovi in London, be ready to fork out between $400 and $500 US for a ticket, because there are just enough idiots willing to part with the money to see the shows, so they prices are that high.
In the end, there was no increase in consumer spending on music in the UK in more than 4 years, just a shift in what they are spending it on, and if the ticket price scenerio is right, less people saw live shows than before, but paid way more for the same thing. That is the problem of selling rarities, rarities are expensive and are priced to the pocketbooks of those willing to pay the most. It screws the average fan, but hey, you aren't useful if you aren't willing to spend.
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Re: Re: as I often say
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Re: Re: heh...
Unintended consequences?
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Music != Music Recordings
Even as smart musicians find ways to use their music to make new scarce things valuable, there is still a market for "selling music," that is, selling the creation of new music. For example, a company might be willing to pay an artist to create a new song for a TV commercial, so it could debut with a never-before-heard soundtrack. From there, of course, copies of the song recording will spread far and wide, but the company has used the music to make their commercial stand out and the artist has gained exposure they can leverage to sell their own scarcities.
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Re: Re: heh...
and this is the incredibly stupid part of the whole "we refuse to recognize the change in the market" thing.
you aren't guaranteed double digit growth, or even profits. you have to change with the market.
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Re: If you want to make music, make music. If you want to sell something else, sell something else.
Or treat it as a profession and find a way to make money at it. I don't think the musicians need you telling them what to do and what not to do.
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Re: Re: If you want to make music, make music. If you want to sell something else, sell something else.
http://brandsplusmusic.blogspot.com/2009/09/lets-get-realistic-about-your-music.html
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Re: Live music rocks!
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a good brain nudge
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