“In last week’s State of the Union, President Obama stressed the importance of creatively revitalising our nation’s economy. He called for “an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values,” the blueprint for lasting domestic prosperity. There are some parallels to this shift in thinking in today’s indie rap game, specifically in application of sustainable new media economics.”

“What this means then is that in order for artists like me to survive, I must be creative with how I let people hear my music. A primary means of distribution in 2011 was my USB robot, a two-gigabyte hard drive keychain that housed all of my albums digitally. I also sell t-shirts with cartoon characters I draw myself and I try to print on shirts manufactured domestically when I can. 47% of my income comes from merchandise, 40% from ticket sales, and 13% comes from iTunes, Spotify or other paid music services through the internet. I used a crowdsourced funding site called Kickstarter to produce my last album, with added bonuses of drawings and personalized songs to the highest contributors.

If the internet were compromised or regulated to the point where the 13% of my traditional digital income (from iTunes, Spotify, and others) were to disappear, it could likely mean that people would turn to getting my music for free, which would then mean that I would need more ticket and t-shirt sales in order to maintain my income level. (My income, by the way, covers my expenses, taxes, and health insurance, and that’s it.)

“Economically, we are living in an era that takes us back to the punk and indie roots of the 70s and 80s. Musicians must be able to go out and perform for years in small clubs to tiny crowds; it’s the way one perfects his or her craft and pays his or her dues. It’s how bands like Black Flag and Minor Threat became legendary, they had explosive, powerful shows and were willing to sacrifice everything to make their music heard. Henry Rollins of Black Flag tells his story in his classic book of journals, Get in the Van, an important read for any indie musician today.

We live in an era of innovative fusion of old and new. Being a musician no longer means simply being a songwriter and performer. One must also know a little bit about business, branding, t-shirt design, social networking, production, publicity, accounting and tour managing.

Ultimately, what this is means is that if you own and run your own business, no one can take that away from you. (The MPAA and RIAA exist to maintain the status quo of the entertainment industry, but I don’t need someone with a large salary lobbying for my interests as an artist when that person is disconnected from the reality of new media economics that I’ve described above.)

The internet in its current free and open format is important to me as an independent indie rap musician and artist. In fact the internet is essential to me and to all of the other artists who are like me. The government’s harnessing and regulating the internet and its free flow of information would be a dangerous thing in that it could lead to government control of a very important channel of a portion of the income that I earn – and through which I express myself freely, exercising my First Amendment rights as an artist.”

Read the whole thing here from the Huff Post UK.

A new survey from the Gartner group shows digital music revenues forecast to grow less than 5% per year.  This is close to flatlined if you factor in inflation.  Not good news for most of the world.

■ Online music revenue from end users will grow more than 31% by the end of the forecast period: from $5.9 billion in 2010 to $7.7 billion in 2015. By comparison, consumer spending on physical music (CDs and LPs) is expected to slide from around $15 billion in 2010 to around $10 billion in 2015.

■ Online music subscription services, such as Spotify, will be the main growth sector in this market, showing fivefold growth from 2010 to 2015. A la carte sales will drive the bulk of overall revenue.

■ The highest growth rates will be in regions such as Latin America and the Middle East and Africa, which have not historically been strong in paying for tracks or albums from online services or stores (although perhaps stronger in paid-for ringtones from their service providers).

Read more from Gartner here.

This Midem 2011 series includes:

• Daren Tsui, CEO of cloud service mSpot
• Dave Kusek,  Vice President Berklee College of Music
• Naveen Salvadurai co-founder Foursquare
• Amke Block AudioMagnet
• Timo Kari and Rami Korhonen PlayMySong.
• Keith Lee, CEO and co-founder Booyah!,
• Gerd Leonhard media futurist
• Martin Rigby CEO Psonar
• Armine Saidi founder and CEO Viinyl
• Antonis Karydis CEO Mativision
• David McKinney founder Jammbox
• Anne De Kerckhove the Director at Reed Midem,
• Wilhalm Taht Marketing director Flowd
• Georg Hitzenberger Managing Director Play.fm.

Episode 71 – Midem 2011 Coverage Day 1 by digitalmusictrends

1. Living a life in music is a privilege. Earn it.

There is very little more satisfying then spending time making music. If you make this your life’s work, then you can be truly joyful. However, the chances of being successful are extremely low and the only people who are going to get there are going to have to work hard and earn the right to be a musician. Respect the privilege of being free enough to have this choice (if you do) and honor the opportunity.

2. No one is in charge of your muse but you. Be happy and positive.

People can be their own worst enemy. Countless times I have heard artists tell me the reasons why their career is not working out. Most of the time they are putting blocks in their way and pointing fingers at people and things that are holding them back. Stop whining and blaming other people and make the conscious decision that you are going to be successful and that things are going to work out in your favor. You are creating your own reality every day, so make it a good one and excel.

3. Practice, practice, practice – then go for it. Over prepare.

You can never be ready enough for opportunity. Your live shows can always be better, your songs can be more amazing, and your playing can only improve. As the CEO of your own musician business, you can learn how to run the company more effectively, reach out to more fans and be an more effective social media marketer. Don’t hold yourself back by not being ready. Be a professional.

4. If you suck, you will never make it. Find a way to be great.

Lets face it, it is really hard to be amazing. Some people have the natural talent and you can see it in the first 5 seconds of meeting them. They are truly blessed. The rest of us have to find our niche, our passion, our calling and then reach for it. Ask people around you for feedback. Find what you are good at and focus on that. Get other people to help you. If you don’t stand out and rise above the pack, you will struggle forever. Be amazing.

5. Learn how to breathe and keep your focus. Stay calm.

There is nothing more pleasant than working with someone who knows who they are and what their goal is. Remember the old adages of thinking before you speak, and taking a deep breath before you lay into someone. Most of us have a lot going on in our lives and we can all benefit from staying focused on our goals and remaining calm in most situations. Learn yoga, exercise, run, meditate, sit still, breathe, learn who you are.

6. Don’t take yourself too seriously, no one else does. Have fun.

I am amazed at how many people spend so much time looking backwards and trying to understand what people think of them. This is worrying about the past and not embracing the future. Reviews are important, but don’t run to them or let them ruin your day. Not everyone is going to like you, but more people will if you are having a good time.

7. No matter how difficult things get, move forward. Don’t give up.

The only thing that will help your career take off is forward momentum. That is how you are going to reach your goals. A lot of people are stuck in their own mud. Take action, make a move and then see what happens. Don’t spend time procrastinating or worrying about how hard it is, just do something positive to advance your cause. You will feel much better by acting instead of waiting or worrying.

8. Find a way to make money. Start small and grow. Avoid being in debt.

This is probably the most important strategy of them all and why so many artists have gotten into trouble in the past by taking label advances. All that is, is a big loan. Get some kind of cash flow happening right away, no matter how small. Sell merch, play for the door, license your songs, play sessions, teach, write, start your musician business. The biggest mistake you can make is to borrow a lot of money and then spend it on things that don’t matter.

9. Be unique and true to your vision. Say something.

The people that we remember are the ones that are unique, exciting, special, provocative, fascinating, original, inventive, interesting. Music is a basic form of communication. The really successful artists have something to say and work on delivering their message. Your chances of success go up exponentially if you have a unique position and message and create a following of fans who really listen to you because you have something important to say.

10. Work and play with people you like every day. Collaborate Often.

Music is a tribal experience. You cannot make great music alone. Surround yourself with talented people, write together, play together, try new things. Bounce inspiration off of each other and learn. Listen to each other and let the music weave it’s way around you. Find a producer, songwriting partner, other musicians and dive in together. The whole is greater than the sum of its parts.

Wonderful things are waiting to happen to you.

The top-selling digital songs of 2010 sold about 4 million, while the top digital albums were around 500K.

The top selling artists of 2010, based on digital track sales,

- Eminem (15.7 million)

- Ke$ha (13.5 million)

- Lady Gaga (11.9 million)

- Katy Perry (11.8 million)

- Black Eyed Peas (11.3 million)

Read more on Digital Media Wire

From Hypebot.  It’s no secret that the amount of money artists are earning from recorded music is declining.  But by how much? And as digital sales replace physical and streaming music gains traction do the numbers shift in the artist’s favor?  Infographic created by David McCandless of Information Is Beautiful from a spreadsheet of data.

Here’s a pretty telling graph – Recorded music sales over time since 1999.   This is the truth.

If you are trying to make money selling recordings, or producing them you are selling into a market that is auguring into the earth.  If you are a pure-play label – either cash out soon and go home before it’s really too late, or start writing a new business plan.  It is time for you to start over.

If you really want to do 360 deals, then get the capacity, personnel and expertise to actually produce results or you are toast.  Todays nimble entrepreneurs and emerging music service environment is going to eat your lunch.  Specialization is in, generalization is out.

If you are a record producer or engineer, create other products to produce.  Broaden your horizons.   What are you going to be a producer of?  What “insanely great” product can you create?

If you think you can survive in the recorded music business, find something else to sell.  Simple as that.  There is no recovery from this decline.  Sure songwriters and publishers can still make money licensing for film, TV and new media (like ring tones), but the engine that has driven the music business for the past 60 years has run out of steam.

Recorded music as a propellant into prosperity is no longer viable.

Accept this fact, move on and adapt.  Use this as a jumping off point.  Reinvent yourself or your business.

This has been my mantra for the past 6 or 7 years.  If this RIAA graph above is not evidence enough, then I don’t know what is.  If you think being signed by a “record label” is your ticket to ride, then nice to have known you.   Enough already.  I can’t believe how many people still want this.  American Idol?

And if you are the RIAA, and think trying to preserve recorded music as a “business” is a sound investment, I would advise you look for another job, and soon.  Gaming Soundscan to count T-Shirts as a way of propping up the numbers and thinking everything is ok is self deception.  Look around you.

This is the truth people.  Recorded music sales are going to end as a viable business driver ’cause it is just not working anymore and is an outmoded concept of what music was all about.  “Digital” tracks are not going to cut it as they have been conceived thus far because it is just the same thing in a different form.  Fixing music in time makes no more sense.  Music is more fluid than ever.  Subscription revenue and streaming licenses are not going to support anyone when they are optional.  We need something new, something bold.

With this as a background I created Music Power Network.  To help people discover the future of music for themselves, and create a plan to take their careers forward.

We have to dig deep here.  This is a time to be honest with ourselves.  What is your music career all about anyway?  How are you going to survive?  What are your goals and your dreams?  How do you define success?  You can’t eat passion and you can’t spend perseverance.  What is your business plan?  What is your marketing plan?  We need some new ideas.  What are you going to do?

It is too easy to say that a 360 model is the way to go.  360 for who?  You or the “label”? What do you really need?  Who is actually going to provide the services required?  What does the team look like?  Where is the value, talent and capital going to come from?  Who is going to back your vision?

Think you have it figured out?

I am going to put together a team of people to search for the best new music business plans for musicians, songwriters and producers.  In the coming weeks we will put this competition together and announce it officially at SXSW or sooner.  Details will be forthcoming on how to enter, who the judges are and what the prizes will be.  I promise you it will be worthwhile and interesting.

So start working on your strategy and your business plans.  To be notified when the competition is announced, please click here and enter your email on the bottom of the page.

Please leave comments below on any ideas you have for judges, prizes, people to reach out to, etc.

Dave

The music industry is being reinvented before our very eyes. Learn how it is developing from today’s entrepreneurs including Ian Rogers from TopSpin, Steve Schnur from EA, and Derek Sivers and how you can capitalize on the changing opportunities.

MPN is my latest project and an online service for music business people and music and artist managers creating the future of the industry. MPN provides online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of specially selected resources designed to help you achieve success in this ever changing industry. MPN gives you the tools, expertise and guidance to help you get organized and take your music career to the next level. Learn from industry experts, set your goals and realize your vision.