Songkick Helps Fans Bring Their Favorite Musician To London

from the working-the-other-way-around dept

When we talk about alternative business models for music, one that always is discussed is live performances. Like it or not, this is a very big (and growing at a rapid rate) part of the market. We've never argued that live performance is the only alternative business model (though some pretend we've said that), but it's hard to deny that it is an area of opportunity for many artists. Now, many people -- quite rightly -- point out that the aggregate data on touring doesn't tell the whole story. Big acts with massive tours can take in lots and lots of money, while it can be quite difficult for acts that don't have that level of support. We've heard the story plenty of times of bands going on tour in a crappy old van, only to show up in places and play for 5 people who don't care, having spent much more on gas to get to the venue than they make from the door. This absolutely happens. And it sucks for bands. But there's no reason that needs to happen.

We've talked about alternative ways of touring, and even how artists like Jonathan Coulton used tools like Eventful to have fans prove there was enough demand at a location before he'd perform there. We've also talked about how there were a growing number of tools that can make touring/live efforts more effective and less likely to lose money. And one of those tools is Songkick, which already helps alert people to concerts they may be interested in, with evidence that services like that, alone, help drive more people to shows. But now Songkick is expanding even more, with a new effort called Detour -- which has some similarities with Eventful. Songkick talks about how they were able to "crowdfund" getting musician Tycho from his home in San Francisco to London for the first time to perform, by gathering up a ton of his fans to prove that there was demand.

Tycho's manager had been worried about doing any sort of European tour, because it's expensive to get there, and if the fanbase wasn't there, you're making a huge bet. Enter Songkick Detour:

We chatted to Tycho and his team and it seemed like they’d need to sell a few hundred tickets to make it feasible to come to London, so we created a simple website, Detour to allow Tycho fans to pledge. What happened next was pretty insane! We emailed the fans on Songkick who were tracking Tycho, and over 100 of them pledged money for a ticket. Gideon was pretty thrilled to see how many other people shared his passion for Tycho. But 100 or so wasn’t enough to get the show confirmed so the Songkickers took it into their own hands & started to contact friends and music fans who were either into Tycho or should be! Within a short while we hit our target and the gig was on! Wow.

Boom. But it didn't end there. As Ian Hogarth notes in the post, because the show was crowdfunded, it also changed the nature of it. Just as we've seen with other crowdfunding efforts, it gives supporters some sort of effective feeling of ownership and thus making the event successful isn't just about going to a cool show, but about really being a part of a success story. And that can take things to another level:

To be honest at that point I didn’t think things could get much cooler. To see fans rise up to help their favourite artist go and tour in a new country was overwhelming. The sense of community and excitement was really special. But then I went to the concert itself and realised the real power of this concept. Everyone at that show was there because they made the gig happen and the atmosphere reflected that. It was beyond intimate and the connection between the band and the fans that started online carried into the gig itself. One of the fans that came made this lovely video of the show and you can get a feel for how special the atmosphere was. Tycho was so appreciative of the fans that made it happen, and brought over some beautiful signed posters for the event which he gave to some of the first fans who pledged.

No one has ever claimed that there's a magic bullet for success in the music business (or any business). But the status quo does not need to be the way things stay. There are all sorts of opportunities to make live music better, more efficient and more enjoyable for everyone. And it seems like this little effort from Songkick is a nice step in that direction.

Filed Under: crowdsourcing, detour, music, touring, tycho
Companies: songkick

Katy Perry Shows How The Problem With The Major Labels Is Economics, Not Piracy

from the there's-a-lot-of-inefficiency dept

A few weeks back, the folks at Planet Money tried to break down the economics of Katy Perry's massively successful album with its five hit singles. Specifically, they wanted to figure out how much money her label made from such a big success. What comes out is a step-by-step description of the massive inefficiencies of the major label recording system. There are things like paying producers $100,000 per song they produce on the album. Then there's all the payola... er "special promotions" to get the songs played on radio so much. In the end, Planet Money calculates that Perry's label, EMI, probably made somewhere around $8 million in profit from Perry's music sales in the US. That's not topline revenue, but bottomline profit. That's not bad per se, but for an album with five hit singles and which was clearly one of the most successful albums in 2011, you begin to see why the labels are struggling.

But, of course, Perry, herself isn't struggling. As the full podcast by Planet Money notes, Perry has been able to avoid getting sucked into a "360" deal where the label gets to take some of all the revenue she earns. They just get the record sales. Perry, in the meantime, is estimated to have made $44 million in 2011 -- a large chunk of that coming from her tour, which alone grossed over $50 million.

What you begin to realize as you see more and more stories like this is, once again, the "problem" has nothing to do with the "music industry" failing... or even that musicians aren't able to make money any more. It's all about the bad economics of the record labels. They set themselves up to fail this way, focusing solely on that one slice of the pie, and not moving very quickly to adapt when the market shifts. Instead, they seem to have kept up the inefficiencies associated with making such a "hit" album, without figuring out a way to profit from the results. Of course, for artists like Perry, things are great. She's able to make a ton of money, most of which doesn't first have to filter through the label...

Filed Under: deals, katy perry, record labels, revenue, touring
Companies: emi

RIAA Insists That Musicians Can't Make Money Without The RIAA

from the funny-how-that-works dept

Ah, the RIAA blog. It's a never-ending source of entertainment. In the past, they've tried (and failed) to address some of my arguments directly, but as someone noted, one of their recent posts again appears directed my way (not just me, but a few others as well). In it, the RIAA tries to suggest that alternative business models can't possibly work. Since many of the arguments the RIAA tries to debunk sound sorta like the arguments I make, it seemed worth responding -- especially given how badly out of context the RIAA takes them in an effort to convince itself that it's still necessary. Let's start with the title:

IS TOURING ALONE ENOUGH?

First of all, there aren't that many folks who claim that touring alone is enough of a business model, and the rest of the post doesn't focus on "touring alone," but on a variety of alternative business models, which makes it a weird and entirely misleading title. In fact, a year ago, we explained why (just like the RIAA is pointing out) touring alone probably isn't enough to replace the revenues of the recording industry -- but that if you combined touring with other business models, it certainly could work quite well. But by using "touring" as the peg, the RIAA can debunk touring alone and pretend (falsely) that it's debunked the entire space of alternative (smarter) business models. Neat trick, but easy to see through.

Some industry observers like to suggest that efforts to address the theft of music online are somehow tantamount to efforts to maintain an "outdated business model" rather than to address forms of unfair competition based on illegal acts.

Now, I am one such "industry observer" who has pointed out that the RIAA has made a Herculean, if ultimately self-defeating, effort to maintain its outdated business model. But that has nothing to do with "theft of music online." It has to do with the changing economics of creating, promoting and distributing new music. Some of that may involve some amount of copyright infringement, but the business model of the RIAA was outdated even in the absence of infringing uses -- and, of course, such infringement is not and never has been theft. Of course, the RIAA knows this, but this blog is a weak attempt at painting itself as a victim, after decades of denying musicians money that it actually owed them. So, the best they can do is pretend that these new technologies represent "theft." Weak.

The suggestion is there are ample alternative mechanisms for generating revenues from music -- money from touring, selling merchandise like t-shirts, licensing music for commercials.

Yes. Indeed. But it's not a suggestion. There's a fair bit of evidence to support that. In fact, we've shown multiple studies from multiple sources and multiple locations all showing this is true. So, it would take quite a debunking from the RIAA to prove this wrong. But, of course, the RIAA doesn't do so. Because it can't.

Completely ignored are the pleas for enhanced copyright protection from artists and unions

A bit of a non sequitur, but not ignored at all. In fact, it's no surprise that artists and unions would want gov't-backed monopolies that mean they have to work less hard to obtain royalties. Who wouldn't want that? But a bunch of self-interested folks begging the gov't for protectionist policies is hardly evidence that copyright isn't being abused to prop up an outdated business model. If anything, it supports that view even more.

Instead the handful of established artists for whom Internet anarchy works as an effective marketing tool are cited.

Wait. That's just a lie. For years, we pointed out unsung artists who were making this work -- artists like Maria Schneider, and in response folks like the RIAA told us that "sure, this model might work for no names who have nothing to lose by giving away their works, but it'll never work for the big artists, like those we represent." Yet, now that it is working for those artists too, the RIAA wants to pretend it only works for them? Nice try, guys. But, as we've demonstrated over and over and over again, with a large and growing list of artists (not just "a handful"), this model works for artists up and down the music food chain. The RIAA says it only works for "a handful of established artists" but doesn't explain the success stories of folks like Corey Smith, Motoboy, Matthew Ebel and others who were hardly "established" when they began using these methods for their own success.

No one has ever said that everyone can succeed with them. However, one thing we have seen is that pretty much every artist who has embraced these models and principles has done better than they did trying to go about things the old way. Those who were on big labels found that they made more money this way. Those who weren't on big labels also found they made more money this way. And, we're not saying this is anti-label. There are lots of smart music labels that are embracing these principles as well. Just not the ones who run the RIAA.

Even more importantly, the reality of the marketplace is ignored in favor of theory.

There's only one party in this conversation ignoring "the reality of the marketplace... in favor of theory," and considering that we've posted numbers on most of the artists we've talked about, and the RIAA is best known for either not sharing or totally making up numbers, take a wild guess who's in reality and who's focused on "theory."

While touring and merchandise sales will work for some bands -- most notably big bands that "made it" in the 80's, 90's or earlier (and built on the back of touring support from music labels) -- it is exceedingly challenging for other bands to generate sufficient income just from touring, and touring support from the labels is rapidly disappearing.

See what the RIAA did there? Now it goes back to pretending this is just about touring. Of course, it's not. Most of the models we discuss don't focus just on touring.

Check out this article in BBC News about UK rock band Doves. And of course, without brand/name recognition, merchandise sales are commercially irrelevant.

That BBC article is quite one-sided, and basically says that the labels aren't providing tour support any more. And that proves what? It proves that the RIAA itself is screwing this up, by not supporting one part of the business that is making lots of money. I'm not sure what that proves other than that the RIAA is really bad at figuring out how to adapt to the changing world.

But, more to the point, the idea that bands can't tour without support from a major label is just silly. There are all sorts of new and more efficient ways for bands to find gigs and create tours. Sites like Eventful, SonicBids, Songkick and lots of others are making all sorts of useful tools around touring, that make it possible to do shows on a much more efficient and cost-effective basis. Yes, the big labels provided lots of money for tours in the past -- and they did so in a wasteful manner. But rather than become more efficient, now they're just hoarding their cash and blaming everyone else!

As for the lack of "brand/name recognition" making it impossible to sell merchandise, that's true. But the RIAA seems to be implicitly stating that the only way to get brand/name recognition is through a big RIAA label. Yet, the examples we've shown over and over again have focused on musicians figuring out how to connect directly with fans themselves. Without the need for massive marketing from the RIAA.

One last question: how is generating revenue from licensing of music to sell other products more socially useful than the sale of music itself?

Ah, yes. The "socially useful" question. It sounds great, but is entirely meaningless. After all, how is generating revenue from smelly automobiles that break down more socially useful than selling horses and buggies? Or, perhaps a more apt comparison: how is having all your phone calls connected directly more socially useful than having operators manually connect each call? Social utility doesn't matter. Economics doesn't care about social utility, and in the long run, in every single case, people tend to discover that there is more social utility in embracing progress rather than denying it.

Cars became more socially useful than horses and buggies by making travel more efficient and faster -- even if it hurt those who relied on the old system (horse shoers and buggy whip makers, for example). Automated telephone switching created a much better phone system, and other advancements including the internet -- even if it meant a lot of operators lost their jobs. And generating revenue from alternative means by selling other products is more socially useful than the sale of music directly because it's more efficient. It allows for less expensive creation, promotion and distribution of music -- meaning it brings more music into the world, helps more people hear more music more quickly for less cost -- and, in doing so, opens up tons of more efficient and socially beneficial business models.

Besides, isn't it just a little ridiculous for the recording industry -- who has filled landfills with non-degradable plastic discs to start talking about how "socially useful" its business model is?

It seems to me that this is the worst of all worlds, one in which all artistry will not be rewarded -- and one in which only music that works well in selling diapers and cars will be commercially produced. Is this supposed to sustain the diversity of music that we want? Would we have Bob Dylan, Leonard Cohen, Patti Smith, the Sex Pistols under this kind of system for compensating artists? Not remotely.

Ah. and now the shift. Suddenly the RIAA is pretending that this is all about product placement and commercial licensing. Except, it's not. And, uh, last I checked, Bob Dylan was shilling for Victoria's Secret, so apparently, he's perfectly happy with such a system.

Exactly what kind of product licensing would have sustained the Smiths or Nirvana? Was there anything on Springsteen's first record that would have drawn the attention of advertising companies? In fact, we never would have had Elvis (either one)! This is an alternative universe in which I would not care to live.

Now this is rich. This from an industry that kicked all sorts of fantastic bands to the curb, because their music "wasn't commercial enough" for the major labels... and now it's complaining about how music will be "too commercial" under this new system? Except, of course, that's not true. If you listen to the music from different artists who have embraced these models, you'll find all kinds of music -- and much of it isn't commercially driven at all. In fact, that's why fans like it so much, because it's not being programmed by some exec in New York, but directly between the musicians and their fans.

Sorry, RIAA, you are protecting an obsolete business model, no matter how much revisionist history you cite and how many out of context arguments you make. Of course, we're more than willing to help your members figure this stuff out. They can just give us a call. In fact, more than a few already have. This might explain why they're questioning the value of continuing to be members of the RIAA.

Filed Under: business models, music industry, musicians, touring
Companies: riaa

US Visa Process Making It Even More Difficult For Foreign Musicians To Tour Here

from the that-can't-be-good dept

A couple of years ago, we noted that US Immigration was making life difficult for touring musicians by changing the way they enforced the visas commonly used by musicians. Specifically, the usual visa required proof of popularity -- but had no systems in place to account for popularity via the internet. This resulted in various well known musicians (including, by the way, our friend Lily Allen) being barred from making expected appearances in the US. It appears this sort of thing is happening again. The law still hasn't changed, but US Immigration has again increased the strictness in how it interprets the existing laws for foreign musicians, leading some top acts to be barred from entering the country -- or just increasing the bureaucracy they need to go through. For many foreign acts, touring the US is quite important in attracting more attention.

The article discusses how this is harming some acts that have built a lot of buzz or won awards... but then have had trouble capitalizing on that with a US tour. It's kind of amusing that just as we hear from politicians talking about the importance of helping musicians with more and more draconian copyright laws, they're making it that much more difficult for them to tour, build their reputation and earn a living. The next time an American politician discusses the need for more draconian copyright laws to help musicians, perhaps a reporter can ask them about this particular issue as well.

Filed Under: immigration, musicians, touring, us, visas

A Different Model For Touring: House Concerts

from the watch-the-innovation dept

We recently posted a report pointing out that touring revenue wouldn't be an acceptable substitute for a loss in recorded music sales. A part of that report suggested that there just weren't that many efficiencies that could be wrung out of the live touring business, while also noting how expensive it can be to put on a tour. Part of my problem with that report was that it focused very much on an old model of touring, and didn't consider that new technologies could, in fact, really change the way people think about touring.

For example, plenty of folks have pointed to the success Jonathan Coulton has had with touring, by using services like Eventful to guarantee a large enough crowd at a certain location and showing up for a "strategic" concert in a place where he's guaranteed to make some money out of it. But some are taking it even further. We've certainly talked about backyard/house concerts before (in fact, we've been suggesting them for about six years), and we've seen Jill Sobule use them as part of her model to fund her latest album. She ended up doing five or six of them, and said they were lots of fun (and she's still open to doing some more).

However, I recently came across a story from a band who basically did an an entire tour based on (mostly) house concerts. The story is from February, but I just found out about it, seeing it mentioned in the comments on a post from Andrew Dubber about how he wants to attempt house consulting for bands (an interesting idea in itself).

The story of the house concerts tour is really fascinating, though, in a variety of ways. Basically, the band -- based in the UK -- were able to book a bunch of gigs all at people's homes around the US. They did most of the booking via Twitter, from people who followed them, noting how much more efficient this was than the traditional system of begging different venues to put on a show:

Method for our tour: "talk to lots of people on twitter >> make friends >> allow them to discover music as they get interested in who we are >> tell them we're touring >> invite them to host gig >> Book in the dates" - the audience is a shoe-in, cos most people can fairly easily find 15-30 friends who are up for a crazy night of music making in a house. It's a nuts idea, it's fun, and it has the added benefit of being validated by a friend of their's... if Tracy/Linda/Angela/Steve/Gus etc are willing to book this, it MUST be good. The person who books the show then emails the links to what we do around (no need to send out CDs) so people have an idea what to expect. Everyone comes to the gig, eats, listens, buys CDs, and we go home with money and loads of new friends. Win-Win.

Other benefits were that the gigs were tons of fun and the band saved on hotels since they usually were able to crash at the house that put on the house concert. They note how many amazing people they met, and how much of a connection they made with folks by playing in such an intimate setting. Also, an advantage of such house concerts is that it was a great way to expand their audience and fanbase, since the "host" basically would go out and recruit a bunch of friends -- most of whom knew nothing about the band before seeing them play.

Perhaps most interesting of all: the band made more money on this tour than they did in the past touring clubs. They noted that the "risk" and costs are much lower. While they say they aren't getting rich this way, they are earning money -- and more than the "old" way of doing things.

So, once again, this obviously isn't a model that works for everyone -- and no one's saying it is. But it does show yet another business model that can work for certain bands, by taking a very different look at the market and coming up with creative and innovative ways to get themselves out there, and do so profitably.

Filed Under: business models, house concerts, music, touring