It Isn't Easy To Break Out Of Obscurity In The Music Business

from the so-what-should-you-do dept

It's no secret at all that it's tough to become famous in the music industry. In the past, you had to hope for one of the golden lottery tickets from a major record label. Otherwise, after a few years of trying, you went back to something else instead. But is it becoming any easier these days? It seems there's some debate about that. Music Think Tank highlights some stats on artists who broke out in 2008:

In 2008, 1,500 releases broke the "obscurity line" (sold over 10,000 albums).

Out of [those], 227 artists broke the "obscurity line" for the first time ever.

Out of the 227 first-timers, 14 artists did it own their own; approximately 106 were signed to a major; the rest were signed to indies.

Interesting stuff, right? Now, the quick conclusion here is that you still need that magical golden lottery ticket to make things work. But I'd argue that's not necessarily the case. First of all, a decade ago, how many artists could have done it "on their own"? Yes, it's a small number now, but it's a trendline that didn't even exist just a few years ago, and the opportunities to do it on your own have only increased. In fact, I'm surprised that 14 artists were able to sell 10,000 albums without a label already. That's really impressive.

And, of course, "doing it on your own" isn't necessarily the point. We're all for artists using record labels or managers or whoever makes the most sense to help them handle the business stuff -- but just the fact that they don't necessarily have to is quite impressive.

The second problem with the stat above? It assumes that album sales are the judge of the "obscurity line." That certainly may have been true in the past, but it is really becoming less and less of an issue. You don't have to sell albums to become well known, and just because you're well known, it doesn't mean you sell albums. It's not the best proxy for figuring this stuff out.

In fact, that data above came from a great (and absolutely worth reading) interview with Tom Silvermn of Tommy Boy Entertainment, and in the interview he more or less makes that very point:

Tommy Boy is more than a record company; we don't consider ourselves a record company anymore, we're much more than that. Now we're sort of a strategic artists positioning company, and our job is to take an artist from where they are in revenues to a much higher number. If we work with Artist A that's making half a million dollars a year, our goal is we take them to a million in year one, two million in year two, and three or four in year three. That's our goal. And then we take a percentage of that revenue. And we're talking about dollars, not record sales, because we may decide to give the records away, and we may only make about 10% of our money from the music and master use or 20% and the rest of it will come from touring and merch, publishing and possibly sync and other things. We'e not concerned with where the money comes from as long as it comes.

Tommy Boy is known for building brands, from Queen Latifah and Ru Paul, to De La Soul and Afrika Bambaataa, Naughty by Nature, House of Pain, so many household names now that you know. When you mention the name, you can see them; like Digital Underground, when you close your eyes, an image of who they are comes up. Coolio ... they all became significant brands, and that's what we did. Tommy Boy is itself as a significant brand. We're not just a record company. Our business always was building brands. How we used to make money was selling records; but we don't see it as the way we can make money now. It's one of the streams of revenue that we can make money from, but it's no longer the most significant or even the second most significant way we'll be making money. We can no longer be limited in how we see artists to the music domain. It's more than the music. We have to work with the artist's positioning.

Exactly. It seems like he understands completely how the industry has changed and what's happening today. Selling music, alone, is no longer the business model. It may not even be a major part of the music business model. It's much more about understanding what that artist allows you to sell. It could be music. It could be seats in a venue. It could be t-shirts. It could be instruments or music boxes or something wacky. Or maybe it's a combination of them all. And, in that world, "album sales" might not be a very good proxy for who is and who isn't obscure. If you're goal is to make a ton of money selling some of those other things, it might make the most sense to give that music away as freely as possible to get over the obscurity hurdle in order to get more people interested in buying those other things.

Filed Under: albums, business models, culture, music, obscurity, tom silverman

If Your Options Are To Change With The Times Or To Just Complain About Them, Which Is More Likely To Work?

from the just-wondering dept

Anthony Biedenkapp was the first of a few of you to send in a blog post from DJ Shadow where he complains about the state of the music industry. While I disagree with an awful lot of what he writes, it is worth reading. It is thoughtful and obviously from the heart. Unlike others, he doesn't seem to blame others, or attack his fans -- he basically just says he doesn't like how things are going:

Specifically, when it comes to the wallet, everyone's suffering....of that there can be no doubt. And what of the financial prospects for musicians and recording artists in the years to come? Shaky, at best. Unless you're one of the grotesque 'Idol'-type pop disasters in the top 5, you're looking at getting a day job or finding other sources of income. Conventional wisdom amongst my peers has been remarkably short-sided over the last decade: "Yeah, CD sales are down, but all the money is in licensing." Not anymore. "Yeah, licensing money is down, but the video game industry is killing it." Less so these days, according to recent data. "Well, the real money is in touring." Really? When was the last time you saw a 'new,' post-record company artist headline a major music festival? At this rate, we'll be stuck with Coldplay for decades (no offense intended).

Fair enough, though I think it misses the point entirely. First, it's true that anyone who thinks that there is one single silver bullet solution to the changing market is going to be disappointed. Rely too much on licensing? That's going to be a problem. Rely too much on video games? Ditto. Part of the point that we've been raising here is that you need multiple revenue streams that work well together -- and one thing that helps the most in making those revenue streams work is exposure and a larger audience. And I definitely disagree with the claim that "everyone" is suffering. That's certainly not true. We've highlighted plenty of artists who are making a career in music who never would have made a living (let alone any money at all) under the old system. And, finally, it's really odd to suggest that the only way touring can be shown as successful is if a new non-label artist headlines a major music festival. What sort of standard is that? Corey Smith netted over $2 million last year, mostly from touring. Is he not successful because he didn't headline a major music festival? And who cares whether they have a label or not. The new business models don't require you to go without a label, just like they don't require you to go with a label.

Time for a little straight talk, from one reasonably intelligent human being to YOU, the reasonably intelligent reader. As distasteful as it may sound, the fact is that so many of our heroes: Jimi Hendrix, John Coltrane, The Beatles, whoever you care to name; generated much of their best art in return for financial compensation. If you take away the compensation, guess what... the art stops.

Except how many qualified musicians in the time of Hendrix, Coltrate and the Beatles didn't make it because they didn't win the golden lottery ticket from the labels? How many artists today have more control over charting their own course (again either on or off a label)? And, yes, plenty of them who are doing smart things, embracing multiple revenue streams, connecting with fans and offering them good scarce things to buy, are, in fact making money.

Every artist is entitled to their own price point, just as every consumer has a choice in what they purchase. Nobody puts a gun to someone's head and says, "Hey, buy this Picasso for 20 million." Likewise, if $9.99 is too much to spend for one of my albums, so be it, your choice. But if you're holding your breath, waiting for me to boost my cool-quotient by giving my music away for free, it's not going to happen. The fact is that I feel my music has value. You may disagree, and that's fine. But I know how much energy I put into what I do, and how long it takes me to make something I'm satisfied with. Giving that away just feels wrong to me. It's not about money per se; I can donate a large sum of money to charity and not think twice, but I won't give my art away. I'd rather sell it to 100 people who value it as I do than give it away to 1000 who could care less. That's MY choice.

And this, I believe, is the crux of the argument -- and it's the argument many artists have made over the years, but it's flawed in a variety of ways. First, it confuses price with value. We all value the air we breathe very much, but we don't pay for it. Price and value are not the same. Second, no one is suggesting he release music for free because it would increase his "cool-quotient," but because, combined with other smart business models, it can help him make more money and reach a larger audience. In fact, as you read through the comments on his post, many of his fans point out that they first heard his music via file sharing. Third, he contradicts himself at the end of that paragraph. Above he talks about how we have to admit that making money really is the most important thing and that without it, people would make less music. But at the end of that paragraph above he says exactly the opposite: pointing out that he'd rather have a smaller audience and make less money if it meant people "valued" his music more. But, again, that's mixing up price and value.

Again, he is, of course free to express his opinion and do whatever he wants. But I think he is looking at the issue from the wrong angle and making some assumptions that aren't supported. There is a world of opportunity out there, and perhaps it's not as easy as it once was, and perhaps it requires things he doesn't like to do. And, yes, he can choose whatever business model he wants -- but it's the market who determines if it's successful. And if the market is saying one thing, and he's choosing to do something else, then he's going to suffer -- and that seems to go against the very point he was making at the beginning of the post about the importance of making money.

Filed Under: business models, dj shadow, economics, free, music

Growth Of Music Digital Sales Is Slowing Down

from the false-hope dept

In the presentation I did last year at the NARM event, one of the things I noted was that people who were pinning their hopes on the music industry making a revival through digital sales of songs were betting on a false hope. They were betting on the idea that they could just take the old world (Tower Records) and move it to the new world (iTunes) with a digital facelift. Doing so ignored the reality of what the internet does and allows. The internet doesn't just let you take a store and move it online. It changes nearly every aspect of the creation, promotion, distribution and business models around music. Yet, this was a point that I got a lot of pushback on. People still insisted that selling music files was going to be "the thing" that worked. They might want to check that assumption. Reports are coming out, noting that while digital music sales are still growing, the pace at which they're growing is slowing down, in some cases drastically.

Now, you can't expect massive growth forever. At some point, every growth market begins to mature and saturate and the growth rate slows down. But, digital music sales are still a relatively small market. It seems much wiser to focus on the markets that actually have much more potential than the one that tries to just recreate the old world by applying artificial scarcities.

Filed Under: digital music, music, music sales

Viacom: Court Should Grant Summary Judgment Over YouTube, But It's A Secret Why

from the um,-what? dept

The Viacom vs. Google/YouTube lawsuit has become something of a running joke in legal circles over the amount of time it's taken to run through the discovery process and actually get the lawsuit moving. However, people are now expecting the case to finally move forward. Both Google and Viacom have asked for summary judgment, claiming that there's enough evidence that a trial isn't needed. That's all to be expected. What's odd, though, is that Viacom's filing has pretty much the entire "background" section redacted. Check out page two on the document below: I'm trying to figure out what could possibly be so confidential as to require redacting in such a case. Maybe the details of why Viacom thinks Google can identify which clips are infringing when even Viacom couldn't properly identify infringing clips and included a bunch that it had put online itself. Because thinking that Google can figure out Viacom's intentions when even Viacom can't figure them out certainly seems like a pretty big mystery to me.

Filed Under: copyright, music, redacted, summary judgment
Companies: google, viacom, youtube

Vancouver Train System To Charge Buskers Huge Fees To Play In Stations

from the gotta-pay-to-busk? dept

We were troubled last month by reports that SOCAN, a music collection society up in Canada, was looking to get buskers (street performers) to pay performance fees. Now more details are coming out on this story. It really involves TransLink, the Vancouver-area transit authority, and SOCAN, with SOCAN demanding a lot more money from TransLink. Apparently, TransLink quickly caved and agreed to a massive increase in fees, which it is immediately dumping on the buskers themselves -- even though most "venues" cover any such fees themselves. It turns out that Buskers in TransLink stations already had to pay $75/year -- but now if they want to play during the Olympics, that will be a separate $50 fee just for the Olympics, and the new annual fee will probably be around $300. For busking. I wonder what they want to charge you for humming or singing along?

Filed Under: busking, fees, music, olympics, vancouver
Companies: socan

Rednex Release New Single On Pirate Bay, Explain Why Record Labels Will Die

from the pirate-eyed-joe dept

If you're a NY Yankees fan, for at least the past decade, you've probably become familiar with the song "Cotton Eye Joe" that is played in the middle of the eighth inning of every game. That version of the old southern folks song is done by a Swedish band, Rednex, and the song was quite a hit for the band back in the mid-nineties (hit number 1 on the charts in 15 different countries). Since then, the band has sold millions of albums -- but it has decided to go in a somewhat different direction with its latest music: it's promoting it on The Pirate Bay along with a massive 28 page pamphlet explaining why record labels will die (pdf), but file sharing will thrive -- and they want to be in front of that wave.

The explanation shows that the band really does seem to be embracing both aspects of the CwF + RtB mantra. The band says that some of the reason the old record labels don't like them is that they don't try to hold themselves out as being better than their fans, but really like to hang out with the fans and party with them. As for the "RtB" part, the band isn't just giving away its music for free, it's got a variety of ways for fans to support the band and get value back. The band claims that it has no idea how to make money, but that doesn't appear to be the case in reality seeing it offers up a whole bunch of ways to support the band:

At our website one can also get a membership. You can be a free member but also a paying member for anything between 3 to 666 Euro. For this you can get free stuff, such as a cap with a cow that says, "I want moooore!!!" ( ... We didn't say it was funny, just that you could ... ) or free downloads of music, pics and videos, chat with us, read articles and interviews, win backstage passes or even order a prank call from us to your boss in the middle of the night! At the website we also have ads where we get some money if they are clicked on.

But the band also realizes that perhaps its fans might have some good RtB ideas as well:

But also -- we want your ideas!! So how the hell can we make a living on our music now?? Tell us. Help us. Call your local bar and tell them to book us for a show! Call Jack Daniels and ask him to sponsor us! Call the circus and ask for vacancies! Any support we can get are we happy for...

But in the end the band is sure that file sharing isn't just the future, but that it benefits everyone. While I don't fully agree with the band's claim that record labels will disappear in 12 years (perhaps a more accurate version is that record labels as we know them will disappear in that time), the entire explanation of what's going on in the music business is well worth reading. The band points out, quite accurately, that file sharing is not going away, and the moral and legal questions people raise are pretty pointless. It points out that the big four major record labels have basically done everything wrong with little effort to really adapt. Then, amusingly, they suggest that any employees at such labels might want to bail out sooner rather than later -- to prevent having such a dead end company on the resume for too long. They also suggest that new bands avoid signing with the majors, knowing that from here on out they'll just be stuck in the rapid decline phase.

And, in the end, the band is thrilled about all that opportunity:

Well, well, sad tunes, huh? Actually, not at all! The fact is that this development is only bad news to a few individuals. For the rest of us it's fantastic and hugely beneficial, and not simply in terms getting free access to music and film, but in relieving all costs, borders and delay to obtain access to ALL information across the globe. The benefit to mankind is so monumental that it cannot be compared to anything that we have experienced before.

This movement is part of something much greater and we all need to expand our perspectives to realise the enormous value and potential that lies within it.

I'm just quoting a few select parts, but an awful lot of the arguments made in the paper sound like what we talk about here. Take, for example, this section on copyright:

This debate needs to be taken to another level. It is no longer relevant or even interesting to discuss whether someone has the moral right or not to exclusively demand rights to one's music or ideas. It is not at all as clear-cut as the music business and various law enforcement institutions claim.

The copyright is definitely not a holy natural right that people acquire at birth. The concept that as soon as someone has an idea they also have the right to it is absurd. Copyright is something that is claimed and needs supporters to then assert the claim. There is nothing wrong in trying to capitalise on one's ideas but it is important to realise that this is not a given right that everyone automatically must agree to and respect.

It's a good read, and definitely great to see yet another band that seems to have embraced what the technology allows, and are jumping fully into new business model experiments.

Filed Under: business models, music, pirate bay, rednex

Vevo Doesn't Put Ads In YouTube API, Gets Upset When Music Streaming Startup Uses That Fact

from the umm... dept

I actually had decently high hopes for Vevo, the partnership between Universal Music and YouTube to create a website for official music videos (currently from three of the four major record labels). I mean, I always figured that eventually the labels would screw stuff up, but I thought it actually had a shot at maybe being useful. The fact that Universal put Rio Caraeff in charge seemed like a good sign as well, since Caraeff seemed like the sort of music industry exec who understood the new marketplace for music, and wasn't encumbered with the "old ways" of doing things. But rather than a useful site, Vevo has basically been a cookie cutter version of what you would do if the record labels created their own YouTube. That is, it took none of the good parts of YouTube. Hell, it didn't even take the ability to handle a lot of traffic. For the first few days after it launched, Vevo just didn't work at all.

Its latest screwup was that it didn't include its preroll ads in the YouTube API, meaning that others who used the API could access and repurpose Vevo content without the ads, and even show the content outside the US (which Vevo currently does not allow). It didn't take long for one enterprising startup, Muziic, to do exactly that. Muziic has received some attention for basically using the YouTube API to create an iTunes-like experience out of YouTube videos (it also gets attention for being founded by a 16-year old). Muziic sent out an announcement this week about how it was using the YouTube API to add Vevo content, meaning you could access Vevo videos without the preroll ads and outside the US.

Vevo's first response? To send a cease and desist. At the very least, it wasn't a legal nastygram, but a more friendly cease & desist sent by Caraeff himself. But "cease" what? Muziic was using the API as designed, and even though Caraeff admits that Vevo is quickly scrambling to change the API, he still says Muziic needs to cease from using the Vevo logo or referencing the company's name. But Muziic used the name in an accurate and descriptive manner. It accurately noted that it was now offering Vevo content -- without ads and outside the US -- all legally via the use of the API provided by YouTube/Vevo itself.

Muziic's co-founder responded to Caraeff's email over at Hypebot, saying that he "was as shocked as anyone when I realized there were not yet any "pre-roll" advertisements for Vevo content in the API," but since it was how the company set up the API, it seems perfectly reasonable to use it that way. He also notes that he had reached out to Vevo prior to this to try to work out an arrangement with the company and got no response.

Filed Under: api, cease and desist, copyright, music
Companies: muziic, vevo

Film Your Kid Dancing To A McDonald's Happy Meal CD... Get A Takedown Notice From Google

from the prince-redux dept

One of the more famous examples of abuses of the YouTube video takedown process was the case of Lenz vs. Universal Music, which involved Universal Music issuing a YouTube DMCA takedown to a woman who posted a very short clip of her baby dancing to a Prince song that was playing in the background. It was a clear case of fair use, and while after the woman filed a counternotice Universal chose not to sue, the EFF filed a lawsuit against Universal Music, saying that the DMCA notice was fraudulent, since it was such an obvious case of fair use. While Universal Music argued that since fair use is just a "defense" and not a "right" it need not consider fair use in sending a takedown, the court disagreed.

You would think, then, that any takedown notices on similar short videos of kids dancing to music would avoid a similar scenario. Copycense points us to the news that a guy has received a notice from Google of potential infringement for his short clip of his kid dancing along to what appears to be a version (not the original) of the Kool & The Gang song "Celebration." As in the Lenz case, this video is a kid dancing to somewhere around 30 seconds of a song: The notice claims that the video contains content for which the copyright is held by record label Razor & Tie. The guy who got the takedown seems a bit confused, in that he appears to be blaming McDonald's for the mess, when it appears McDonald's had nothing at all to do with the takedown. In fact, the record label Razor & Tie may not have anything to do with it either... as I'll explain below. The song used in the video was from a CD that came with a McDonald's Happy Meal. Looking around, it appears that in April, McDonald's announced a promotion with record label Kidz Bop to issue music CDs. Razor & Tie is the parent company of Kidz Bop. The problem here is clearly not McDonald's. All it did was include the CD in Happy Meals. It's got nothing to do with the takedown, and the guy's anger at McDonald's is misplaced (though, you could make the argument -- and it's a stretch -- that McDonald's should tell its partners to avoid these sorts of ridiculous copyright claims that scare people away from buying Happy Meals).

The next assumption, then, would be that Razor & Tie is guilty of sending the takedown, but I don't think that's true. If Razor & Tie had sent a DMCA takedown, the video would be down. When Google receives a DMCA takedown, it almost always (or perhaps always) pulls down the content immediately in order to retain its DMCA safe harbors. The user would then need to file a counternotice to start the process of potentially getting the video back up. The fact that the video is up and the notice the guy received simply tells him to review the videos suggests that no DMCA takedown was sent.

Instead, the blame almost certainly lies with Google's content recognition engine/filters that the record labels pushed them to use to try to catch copyright infringement ahead of time. Now, Razor & Tie is somewhat complicit here, in that it appears to have uploaded its catalog to train Google's filters (if I remember correctly -- and correct me if I'm wrong -- Google needs the copyright holder to submit copies for its filter to work). So, Google had this particular song on file, and noticed the similarity. Google's filter algorithms don't appear to consider fair use (or, perhaps more likely, they do a bad job of it in many cases) and the guy then is sent the automated notification, even though it makes everyone -- McDonald's, Razor & Tie and Google -- look bad, though the blame from the recipient appears to be in almost reverse order of culpability.

Unfortunately, the guy who received the notice also appears to be confused concerning his own rights. He says he is going to take down the video, though he clearly has a strong fair use case in asking for the video to be left alone. It seems likely that Google would allow the video to stay up, and I highly doubt that Razor & Tie would do anything else (it would be ridiculous to try to claim that this was not fair use).

Either way, this highlights a variety of interesting things. First, despite all the publicity of the Lenz case, these types of "takedowns" (even if it's not a DMCA takedown) still happen. Second, people on the receiving end of these notices assume that there is no recourse that would allow the video to stay up. People get official sounding notices and they assume they need to jump. Third, Google's content match filter isn't particularly good on fair use issues. Fourth, when these sorts of bogus notices are sent, it reflects very poorly on a variety of companies. In this case, McDonald's is getting most of the blame, despite being almost entirely blameless (well, it did decide to put out these silly music CDs, but that's a separate issue). Even Razor & Tie may be getting misplaced blame (though it may depend on the "rules" it set for Google's filter). Amusingly, it may be Google that deserves the most blame, and it appears to be getting the least.

Still, no matter what the situation, it's simply ridiculous that a guy filming 30 seconds of his kid dancing should have to worry about any of this.

Filed Under: copyright, dancing, filters, kids, music, takedowns, videos, youtube
Companies: google, kidz bop, mcdonald's, razor & tie, youtube

Yet Another Attempt At Ad Supported Music

from the if-it's-more-annoying,-it-won't-work dept

Back in October, we wrote about plans for yet another "free, but ad supported" music download startup, but didn't see how the economics could work out. That site, FreeAllMusic, is apparently now getting set to launch, but it still doesn't make much sense to us. Basically, you can download music (two of the four major labels have signed up) for free -- and it's not encumbered by DRM (that's good), but you have to sit through some sort of video ad before you can get the music and you are limited in how much music you can download. The site's CEO claims "We have made this process easier than stealing."

We'll ignore the confusion (most likely intentional) about the difference between infringement and "stealing" and focus on all the other problems with this service. First of all, it's not easier than infringing. You have to sit and watch an ad. You don't have to do that on file sharing networks. Second, the assumption behind the service is that people would use this the same way they use iTunes: meaning only a very small number of downloads per month. Initially, that means 20 downloads per month, total, and no more than five per session. That may be how people use iTunes, but that's because each download costs money in iTunes. One of the reasons people prefer file sharing systems is because they're not limited that way and can really easily sample lots of music quickly.

But the biggest problem with this concept remains with the basic economics. Since the argument remains the same as I stated a few months back, I'll just repeat it:

You've got the record labels, who are used to getting approximately $0.67 per downloaded song. Assuming that needs to be made up by the ad (and even ignoring any profit for the site), then every single ad shown needs to cost that same $0.67. Translated into traditional ad terms, that's a CPM of $670. Yikes. I don't know any advertiser will to pay anything close to that -- even if it's targeted and you have a half decent chance of the person paying attention. Most CPM ad rates online these days are in the sub-$5 area. Convincing advertisers to jump to a $670 CPM on an unproven model? Good luck.

I'm all for experiments and new business models -- especially those that make use of free music. I just don't see this particular one getting very far. The economics are just not that compelling for anyone involved.

Filed Under: ad supported music, ads, business models, downloads, economics, free, music
Companies: free all music, freeallmusic

Musician Christopher Bryant 'Opens For Himself' To Connect With Fans... And To Find New Ones

from the cool-ideas dept

We're always interested in cool promotional and marketing ideas from content creators, and Hypebot alerts us to the news that musician Christopher Bryant is planning a neat concept for his solo shows: throughout 2010, he'll "open for himself" when playing live. Basically, he's playing two sets, but the first set will all be music by another artist. The first such artist is Ben Harper, who is apparently a huge inspiration to Bryant: Now, of course, this might not sound like anything special. It's just a musician playing a bunch of cover music before playing his own music. But the positioning is quite smart. It's positioned in a different way that draws attention and helps better connect with fans. Not only that, but it helps this up-and-coming musician get some additional attention from fans of a much bigger artist. It's a very smart move.

Filed Under: ben harper, christopher bryant, music, promotions