Future Of Music

“Having been in the industry for over 30 years, I recognize this book as visionary and for a young or even experienced performer, like myself, an excellent look into the future of the music business as well as the technological possibilities head.  I had predicted the crumble of the castle created by the industry majors and their control of the radio airwaves a little over 5 years ago just on common sense principles with the innovation of web access. The author here has put those common sense principles with substantive information on the evolution of web technology and communication. This book,coupled with the equipment and software available to produce in personal studio facilities gives the 21st Century musician and performer an opportunity to not only produce himself but market himself in way unimaginable in the past.  This is an ABSOLUTE…. MUST HAVE…..in the library of anyone who intends to participate in the Music Business. I won’t be enough just to read it, this is a small text book that future information as the industry continues to evolve, will be the basis of and will continue to serve as a reference source towards the fundamental understanding of the techno/business aspects necessary to understand.” - Earl Nesmith, Musart Enterprises

"Perhaps the most compelling music-biz think piece to emerge this year.  The authors challenge traditional assumptions about how to “make it” in the music business, providing much valuable legal and technical information along the way.  A must read for those who are banking on music for their own future." – David Roman, Future Music Magazine

"A solid look at how the music industry is healthy even if the music business is not. One of the best takes today on what a "pool of music" could mean to the artists, record labels and consumers." – The Register (UK)

"I think your book is the best music business book I have ever read!  I have recommended it at our recent meetings." – Franklin Spicer, Los Angeles Songwriter Co-op

Here is what some of the people who bought the book have said:

"The Future of Music is a prophetic book that nails right down where it’s at. It’s a must to read for everyone in Internet, media and music industries." – John Mark

"I just started reading you book and I can’t put it down!" – Sue Frenz

"I just finished the Future of Music. Incredible read. I’m abuzz with inspiration and hope." – Chris Farrell

"I have just purchased the Future of Music.  Quite an extraordinarly book, to say the least." – Bob Beland

"Great book.  I have bought over a dozen copies for colleagues." – Richard Rees

"We loved your book and our entire team has been given the assignment to read it.  A resounding THANK YOU for raising the consciousness of our customers and audience.  We will be recommending your book to everyone we know." – Amity Carriere, hotlocalmusic.com

"This book articulates a new thinking that must be embraced by the next generation of music professionals, especially unsigned, independent artists who wish to develop and capitalize on today’s available resources and tomorrow’s opportunities." - Lior Shamir, We Are Listening

"Thank you for giving everyone a reason to believe in the wonderous vision of the future of music." – Joe Lefebvre

The recording industry has always been driven by new formats throughout its history.  From wax cylinders to vinyl records, from cassette and 8-track tape to CD and more recently MP3 files. The music industry has always moved forward by introducing successful new formats and migrating people to a better product.  The CD has been around for nearly 23 years and is a tired format.  The major labels refused to license unprotected MP3 files and this decision is one of the reasons that they are in trouble today.

The future of music lies in embracing and developing new formats that give people increasing value and convenience - and makes music more attractive and makes it sound better. 

In our book, ‘The Future of Music’, and in recent industry presentations we proposed new formats for music, such as those to be delivered on flash memory cards and in jewelry.

Now, the vision begins to come to life.

SanDisk has announced plans to deliver music content via its microSD, flash based memory cards. The company will offer the new Rolling Stones album, ‘A Bigger Bang’, on the format starting in November. The price point will be $39.95, and the cards will be available through a large number of retailers. The Rolling Stones deal is only the beginning with the cards eventually including other forms of media. The company also announced that its Gruvi cards will be compatible with the Yahoo Music Unlimited service, allowing consumers to listen to subscription-based content across the same range of devices. To achieve this, the Gruvi cards will be compatible with the Yahoo Music Engine software client, which lets listeners manage music, create playlists, and purchase downloads.

Read more here.

Watch this week’s Nightly Business Report on NPR and Public Television to see a special series on the Music Business, featuring Dave Kusek and Gerd Leonard.

"On December 6th, 1877, Thomas
Edison shouted a nursery rhyme into his new talking machine. The recording
industry was born.

Over more than a century, the technology evolved from wax cylinder to
shellac platter to long-playing vinyl to cassette tape to compact disc.

But the business model remained the same: The artist recorded to the
label`s satisfaction, the label did the manufacturing and handled the
distribution, and the consumer could take it or leave it.

That changed in the mid-1990s, when personal computers got the ability
to make digital compact discs. Unlike analog, digital recordings are
simply computer data files, and the tools need to create, capture and
manipulate digital music are inexpensive, high quality and widely
available.

Now, consumers can use the recording industry`s compact disc to create
their own compilations, re-edit to produce derivative products, and yes,
make perfect copies.

When the cost of the blank needed for a copy fell to pennies, the
industry`s business model fell apart.

If the ability to easily copy compact discs was a problem for
the recording industry, Napster and other file-sharing systems were a
disaster. Created in 1999, Napster let consumers freely trade the computer
files of songs with others over the Internet. The artists, publishers and
recording companies never saw a dime.

Nearly 40 million people were said to be using Napster when
it shut down. And for every Napster that was shut down, another method to
share files sprang up.
The industry`s trade association sued thousands of people, mostly
college students, to stop the practice. The lawsuits, tens of thousands by
some counts, continue today."

More info here.

The NYTimes reported that "At least five online file-sharing companies have started trying to
reach an accord with the music industry to convert the free trading of
copyrighted music on their networks to paid services, according to
several recording industry and file-sharing executives."

It is not like the P2P services have not tried to negotiate licenses before. Napster 1.0 and Kazaa among others have repeatedly tried to secure licenses from the majors, only to be told that they ‘will not negotiate while there are unauthorized content on the P2P sites.’ 

This time the hammer is hanging over the heads of these P2Ps.  Any bets on:

1) whether these p2p service will survive this negotiation, or

2) whether consumers will continue to use these p2p services

are anybody’s guess.

Read more here.

"There is an art to this sh*t. You know that. It’s the corporate
bosses that forget that fact. But it’s not just music - we have this
problem plaguing every aspect of our culture.  Yes content needs
work, yes marketing needs work, but it is the sales teams that need to
be re-educated and motivated and inspired and creative. And it’s not
happening because they are being led by business oversight guys.
Content guys should be running companies, marketing guys should be
running companies, who put business oversight guys in charge?  Wall Street that’s who. Wall
Street continues to love and reward and worship short term success for
some reason. As the culture and the economy and all our fathers’ and
grandfathers’ and hundreds of years of hard work get trashed in a
generation or two. The tail is wagging the dog. Wall Street should not be calling the shots. When did Wall Street ever write a song? Paint a picture? Make a movie? Play a song on the radio that changed somebody’s life?  Where are the music people?  I see lawyers, accountants, test marketers running the world. Where is the emotional connection?  Where
is the passion? This ain’t about JACK or BOB or Moe or Larry or Curly.
It’s about you. Everybody in this room. You are here because you are
connected emotionally.  This ain’t Harvard Business School. It’s f*cking Rock and Roll!"

Little Steven Rants on state of radio

A very clever application for linking your music library to upcoming concert appearances is available from Passalong Networks.  OnTour provides a way for you to find local concerts featuring your
favorite artists, to purchase music by these artists, and to buy tickets to these concerts.  OnTour scans the digital music files already on your computer and generates concert listings by matching artist names to upcoming concerts in the your area (U.S.).  Artists with upcoming shows in the area are listed. Click on a link and details appear with concert dates. Buttons that link with Mapquest, the venue schedule and Ticketmaster are at the bottom of the window. Choose "Recommended Artist" from the drop-down list and the application compares your artist list with data gathered from thousands of other music lovers to make recommendations.  OnTour also allows you to scan by concert hall, to see which artists are scheduled to play at your favorite venue. Additionally, OnTour allows you to manually add artists to track and can display ‘all artists’ for your city. This application will ensure you ‘never miss a concert again’.

Check it out here.

Welcome to the "mtvU Woodie Awards" — the only show honoring the music voted best by the college audience. Winners will be announced at the "mtvU Woodie Awards" live ceremony and concert event November 2nd at the Roseland Ballroom in New York City which will premiere on mtvU and mtvU.com November 10th. "College students are prophesying the future of music, today," said Stephen Friedman, GM, mtvU. "With our first ever live Woodie Awards event, the music they live their lives to takes center stage, and the rest of the world gets to see what’s about to break big."   

Last year’s first-annual "mtvU Woodie Awards" were a resounding success as college students declared their favorite artists and bands, propelling them to mainstream success with record album sales, sold out tours, and accolades at other award ceremonies.  Modest Mouse and Coheed & Cambria were the big winners, with each walking away with two nods.  Modest Mouse was recognized with the "Woodie of the Year" award for Best Artist, and the "Silent But Deadly Woodie" for Best Music Video honoring their single "Float On."  Coheed & Cambria won "Soundtrack of My Life Woodie" honors for Best Album with theirrelease "In Keeping Secrets Of Silent Earth: 3," and the "Road Woodie" for Best Live Performance.  Other winners included N.E.R.D., Taking Back Sunday, Sum 41, Incubus, as well as The Killers and Fallout Boy who both won honors at this year’s MTV Video Music Awards. 

To vote for the second-annual "mtvU Woodie Awards," college students around the country are invited to visit http://www.mtvU.com before October 28th.

"The RIAA took a strong step this week by issuing a rash of cease-and-desist letters to top P2P firms. Those actions were hardly unexpected following MGM v. Grokster, but the aftermath for the P2P world could produce some surprises.

But what happens to overall file-sharing volume and CD sales as a result? After all, the core interest of labels is making money, and ending the erosion in CD sales caused by file-sharing. Some observers doubt that the latest strike will have a negligible effect on overall swapping volume, as more off-shore, underground, or alternative sharing mechanisms swoop in to fill any voids left by the RIAA actions. That is certainly what happened several years ago, despite the shutdown of Napster, Aimster, AudioGalaxy, and a host of other file-sharing tools. The demand for easy music was just too great, and the void was satisfied within months. That could characterize the aftermath of the latest purge, though it will take months and several bloody battles before the true outcome is known."

From Digital Music News

The music company of the future will be based around the combination of artists and artist management, publishing, touring, merchandising, and recordings. The  artist’s brands will drive the business, and the economics will make the financial risk more tolerable and the return on investment more predictable.  Instead of betting on a traditional 10-to-1 recording model that requires the huge success of CDs sales for a few artists to work, the New Century business model can work on much lower volumes by spreading the risk across multiple revenue streams.

The New Century business model combines the functions of a record label, management company, publisher, and merchandiser into a single entity. The company signs artists to deals in which the artists own the masters and license them to the company for a limited time. Artists create their own recordings and the company takes this music to market in digital and hard formats, creates merchandise to sell, and provides management and tour support for live performances. The company also acts as the publisher for all songs written while under contract.

The New Century model increases the potential return on investment for each artist signed by aligning the interests of the artist, manager, label, and publisher into a single entity that splits all revenue sources. This model is based on lowering the cost of production, distribution, and promotion for all parties to minimize the risk of financing a new act.

The New Century model is not unlike what bands like Phish and String Cheese Incident are already doing within their own companies, and similar to the model of an independent record label with a publishing arm.  You can also see this model taking shape with companies such as Nettwerk and Sanctuary.  The major change is the integration of management and touring into the business mix in a shared manner. That way the company can take an integrated and synchronized marketing approach across all the revenue possibilities and try and maximize income and opportunity. This model is particularly interesting in light of the negative effects of free music distribution via P2P networks on recording and mechanical income. By maximizing the revenue potential by including touring, publishing, and merchandising in the mix, the company can try new creative marketing approaches that leverage freely distributed music to drive other income streams.

Record companys today

are trying to scoop up rights that go beyond the traditional recording income, such as has been recently reported in an LA times story..  EMI has apparently offered the band Korn an estimated $15 million upfront — more than twice what the band might expect from a traditional recording contract in exchange for at least 25% of the band’s publishing, merchandising and touring revenue as well as profit from the group’s albums.

A&M/Interscope recently signed the band Pussycat Dolls to a deal that incorporates promoting the group’s cosmetic line in exchange for sharing in all revenue the band collects, including profit from a Las Vegas nightclub the band owns.

When Warner Bros. Records signed My Chemical Romance in 2003, Warner got both recording and merchandising rights. Label executives said information gathered from merchandise retailers helped them persuade radio stations and MTV to play the band’s songs and videos.

The big problem with this approach is that the labels have to do a lot more than just negotiate hard for these rights.  They have to actually develop merchandising, publishing and touring capabilities within their own organizations.  Without that, the band is simply just giving up future income in order to get a record deal and a bigger advance - and the unhealthy pattern of the relationship between artist and label simply continues.

New entities need to be established to make these new models work.  Artists and their managers have to be very careful that they do not mortgage their futures for a record deal today.  The New Century Model requires a completely different way of thinking about marketing and artist managment than has traditionally been done before.  It is not as simple as bowing to pressure from the label to get that fat check.

The Popkomm-IMEA awards are this week with many new companies competing. This event gives us a glimpse into the future of music and digital media, by showcasing new businesses and product ideas.

“It was a difficult process to whittle the applications down to 14 finalists as this year’s quality of submissions was extremely high and a lot of extremely innovative new companies and products came forth,” commented Gerd Leonhard, author of ‘The Future of Music’ and Chairman / Executive Producer of the annual Popkomm-IMEA Awards. “The jury believes that the contestants we have short-listed may very well end up being significant players in the development of the music and media industries going forward.”

“Now that we have the finalists I am very excited to see them presenting their ideas. It will be an event full of innovations that nobody interested in the future of music should miss,” says Katja Bittner -Director of Popkomm.

The finalists are Digimpro, GoFish, Gracenote, Grouper, Hyperscore, Ksolo.com, labeltools GmbH, MFORMA Billboard Music, Mixed Tape, MusicStrands, Polyphonic HMI, PotatoSystem, Sonic Bids and SSEYO miniMIXA.

More details here.