Future Of Music

Music2.0 is a hard-hitting, provocative and inspiring collection of essays and blog posts on the future of the music industry from my co-author Gerd Leonhard. The book continues and expands on the ideas and models presented in our book “The Future of Music”, which has become a must-read work within the music industry, worldwide, available in English, German, Spanish and Italian.

Music2.0 describes what the next generation of music companies will look like and the new principles that will define the next iteration of the music business.

Music2.0 presents the best of Gerd’s writings from the past four years. As you move from 2003 to 2007 in the book, the evolution of various ideas and expressions can clearly be observed.

Check out Music2.0 here!

The current issue of Rolling Stone includes some interviews with artists on the future of music. Here are some excepts:

Adam Levine - Maroon 5
How do you think the music business will change in the next decade?

It’s a very greedy, artist-exploiting business, and I think it will fall hard so it can rebuild itself with a better business model that is slightly more fair to everybody involved. But, yes, I do think that right now the music business is crumbling. Artists are starting to take back control from the labels, which is great. We have record labels to thank for a lot, but we also have them to blame for a lot. The major labels are scrambling right now and trying reactionary measures. Like, if you sign a record deal now, they take a percentage of your touring revenue. Bands are getting grabbed by the balls before they even sign a record deal and the grip on their balls is even tighter than it used to be. I think it’s only a matter of time before everyone is on an indie label. Because music isn’t going anywhere and the business is being forced to take a look at itself. It needs to go through this phase: Eventually, the scale will calibrate and the business part will ultimately survive, but I think artists will end up in a better position than they’ve ever been.

John Legend
Are you optimistic about the future of the music business?

I don’t really care that much about the overall business. What I care about is, “Am I creating something great for the fans, something that they want to pay for?” Fans might not buy as many albums as they used to, but as long as you make something special, they’re going to keep coming back to you. There are ways to succeed outside of just selling actual units. There’s touring and merchandise and corporate partnerships and all kinds of other ways to make money. I think I’ll be fine, as long as I’m making music people want to buy.

Jack Johnson
What advice do you give to young musicians?

It seems like a really good time to get into music, as far as trying to get your music heard. You don’t really need to have the backing of a major label anymore, you can do it, get your music on the Internet, and that word of mouth thing can happen. That was a huge part for me before I even had a record out. People started trading our stuff online. Once we had a record, people would have me sign a burned copy and say, “Sorry it’s burned,” and I didn’t really care. If people were getting the music, I was cool. I thought technology was helping spread it around. I always hear people say the music industry is in trouble, and it probably is, but as far as getting your music heard, it seems easier nowadays.

Wyclef Jean
What changes do you see coming in music?

I feel like we’re going into a very eclectic mode now, where the strong will survive. Kids can create beats now through their computer in two hours, so to last in the long form, you have to bring a musicianship to it. If you’re hearing the track I did on the CD with me and Serj from System of a Down, you hear how the movement is syncopated, then I stop the record at two minutes, screw it up, then I pick it back up with a classical part, go back into the groove. A kid goes, “Damn, how did he do that? I can’t really do that on my computer. On these Fruity Loops [software], I’ve got to keep it a certain way.” I think this will inspire kids to say, “Man, I’ve got to learn more music and put more arrangements in the music.” People are making music and they’re getting it out there, but we’re losing a sense of the live elements inside their music.

It is one thing to talk about the impact of technology on the music business, and it is another thing to actually do something positive with it. The video clip below describes some of the work that we have been doing here at Berklee to address the opportunities brought about by technology on the business of music education.

Check out the online music school Berkleemusic.com

See other similar video clips at ArtistHouseMusic.

It used to cost a lot of money to record and promote new music. Artists struggled like hell to find a patron to support them (i.e. a label). Everything was controlled and only a few artists became stars. That was the major label system. Most artists learned quickly when the recording advance money ran out that they needed other sources of income like performing, songwriting and the sales of merchandise to survive. The new artist model says anybody can make and distribute a recording. It is much less expensive to make a record today and recorded music is only going to become less valuable to everyone over time. The real hard part is promotion. The true nemesis of the artist is obscurity. There is a glut of music out there and the situation is only going to get worse. This is the reality of the future of music, abundance and saturation.

Record companies alone cannot afford to invest in the future of artists. They are like the Detroit auto makers of the mid 1980’s. The business model that drove the music industry for the last 70 years is almost dead. Unfortunately, the economics of today’s popular digital music splits (iTunes) do not make any sense for artists. Why make $0.06 off an iTunes download, when you can make $0.80 doing it yourself? If you don’t own your masters then you have nothing.

Personal connection with a fan base is the hallmark of the masterful entertainer. Truly great artists engage their audience while playing shows by working the room. Today artists can establish meaningful virtual relationships directly with their audience by building an online fan base and answering online posts and comments and taking the time to interact with their fans. The reach of a live show can be magnified with the orbit and power of a networked online community.  To be sure, it is a lot of work to monitor the boards and keep up with the postings, but it is a lot easier than touring 250 nights a year, and the payoff can be massive.

This is just like employing street teams to build buzz and selling CDs out of the back of the tour van, both of which are proven tactics to build audience and create direct relationships between artists and fans. Only now the street teams are virtual and the van is open for business in every city across the globe all the time. The name of the game for bands is to know who your audience is and what they like and where they are coming from. You cater to that and you might just have a chance at a career in the new music economy.

Artists, songwriters and producers of the future need to find ways to break through the noise and stand out without significant recording revenue. That model is no longer going to work. Artists of the future are going to need musician businesses built around them that attract audience without relying on recordings to finance the machine. We have already seen how this is possible today, and it is going to become more commonplace over time.

The recording has lost much of its perceived value and musicians are going to have to struggle with that new reality. Sales of records and CDs will never again be the cash cow the major labels got fat and happy on. But recorded music can play a major part in the promotional strategy of new musician businesses and even make some money.

The future of music distribution is going to be mobile and oriented toward mobile devices. Think Nokia. The culture of payment that exists in the mobile space will support transactional and subscription models for music that will capture people’s attention. It is going to become more about having access to music than actually owning it.

Sales of CDs are falling off a cliff as people find it easier and easier to get music digitally. The value of recorded music is plummeting and not even Apple can make money off of it. About iTunes, Steve Jobs says “Most of the money goes to the music companies, we would like to break even/make a little bit of money but it’s not a money maker.” It has just kept Apple out of court with the labels.

The packaging and sales of recorded music is being ripped apart with full albums and CDs being cannibalized by the new digital single track downloads. New bands are going to have to try new formats for recorded music to extract any real recording related profits in the future.

The broadband Internet, 3G mobile phones and MP3 players have fundamentally shifted the balance of power in the music industry forever, especially for the young. Owning CDs is so last century.

The big money for artists has always come from live performance, sales of merchandise, DVDs, personal appearances, publishing and alternative revenue streams – all promoted and supported by the free and nearly free distribution of recorded music. Live performances and t-shirts cannot be digitized at least at the moment, and the experience of being at a live event is going to have to get more appealing, for many bands to survive in the coming years.

New Artist Model

In reality, this is the way is has been for most artists for the past 50 years. Only now the tide has turned, and the shifting sands of the music business will form around an entirely new promotional model that puts we, the music fans, at the very center of the circle. It’s going to be entertaining to be sure.

Great to see a band of this stature make a bold move like this.  Radiohead has released their latest album "In Rainbows" online and for free, if you want it.  They will also accept whatever amount you wish to pay for the songs.  Brilliant!

Bertis Downs, manager of R.E.M., says "This is the sort of model that people have been talking about doing,
but this is the first time an act of this stature has stepped up and
done it. . . . They were a band that could go off the grid, and they
did it."

Just watch what happens when they launch their tour!  Tickets, t-shirts, hats, box sets, other goods - watch the cash register ring.  KA-CHING

LA Times reported the story on Sunday.

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.

About David Kusek

David Kusek is a musician who has been inventing the future of music for the past twenty-five years. He was one of the first to capitalize on the commercial potential of computers and music. As an early synthesizer and electronic music pioneer, Dave cut his teeth on innovation.

At the age of nineteen, he co-invented electronic drums at Synare, which helped ignite the disco era. In 1980, he founded the first music software company, Passport Designs, which made it possible for musicians to record and produce their music at home with its award-winning software.

Kusek is also a co-developer of the Musical Instrument Digital Interface (MIDI) standard that opened up electronic music to literally millions of people. His efforts, along with others, set the stage for the desktop music market that we have today. In 1993, Kusek, with A&M Records, designed and developed the first commercially available enhanced CD that connected audio CDs to a personal computer. He also produces interactive DVDs for BMG Music, Windham Hill Records, and Berklee Press.

Today, David Kusek innovates at Berklee College of Music in Boston, Mass., the premier school for aspiring professional musicians for over half a century. Dave is Vice President of Berklee Media, the continuing education division of the college. In that capacity, Dave oversees some of the college’s most visionary projects. These include: the college’s online extension school Berkleemusic berkleemusic.com, a major initiative to expand music education worldwide; Berklee Shares berkleeshares.com, a venture that taps the potential of digital networks and music content licensing by making a broad selection of Berklee’s curriculum free and universally available online; and, Berklee Press berkleepress.com the publishing arm of the college. Kusek also provides strategic consulting and advisory services to companies and individuals involved in the music and entertainment industries.

Kusek has written for or been quoted in Billboard, Boston Globe, New York Times, Wired, Christian Science Monitor, Associated Press, and San Francisco Chronicle, Forbes, NBC-TV, Nightly Business Report, NPR, Corante, The Deal, Inside Digital Media, the Financial Times.  Kusek has been interviewed by over 25 radio stations nationwide. He has been a speaker and lecturer at Berklee College of Music, MacWorld, Comdex, PC World, NAMM, AES, and California State University.

Dave lives near Boston and can be contacted at dkusek@digitalcowboys.com.

About Gerd Leonhard

Gerd Leonhard is a respected music futurist and oft-quoted visionary, a well-known music industry executive and music business entrepreneur, a sought-after strategic adviser and music industry super-node and still a performer (guitar), writer, and producer. A native of Germany, Gerd has spent more than twenty years in the U.S. music, e-commerce, and entertainment technology industries, and is equally at home in the U.S. as well as in Europe.

During the dot.com days, Gerd was the founder and President/CEO of LicenseMusic.com, a company that revolutionized music licensing, reducing the average transaction time for music licenses from six weeks to two hours. LicenseMusic, Inc. served thousands of clients from 1996-2002, including Disney, Paramount Pictures, and Fox TV.

He is the Founder and CEO of ThinkAndLink (TAL), a boutique advisory agency based in Basel, Switzerland and San Francisco. TAL connects people, ideas, companies, and resources in the converging sectors of entertainment and technology, and catalyzes their development. As CEO of ThinkAndLink, he serves as Senior Advisor to Media Rights Technologies, BlueBeat, and ShareTheMusic Networks. Gerd sits on the Advisory Board of Musicrypt, Inc., and works with dozens of startups and new ventures in the entertainment and technology industries in Europe and the U.S.

Gerd served as the Executive Producer of the pan-European talent event EuroPopDays, as Expert Advisor on the Cultural Industries to the European Commission in Brussels in 1993-1996, and as Senior Strategic Adviser to Rightscom Ltd. (London). Gerd graduated with a diploma in Jazz Performance (Guitar) from Boston’s Berklee College of Music (1987), and won the college’s highly acclaimed Quincy Jones Jazz Masters Award. His performance credits include touring internationally, including opening engagements for major acts such as Miles Davis.

Gerd has been quoted in Billboard, Variety, Hollywood Reporter, San Francisco Chronicle, Business2.0, Wall Street Journal, and Wired, and continues to speak, moderate, and/or present at the music industry’s biggest events. He publishes his music business visions at MusicFuturist and you can visit his Web site at gerdleonhard.com.

Gerd currently resides in Basel, Switzerland and can be contacted at gleonhard@gmail.com.

Contact

The authors can be contacted via snail mail at:

David Kusek
Berklee College of Music
1140 Boylston Street
Boston, MA USA 02215

Press contact:

Lori Ames
212-620-4080 x12
lori@wesmanpr.com