Future Of Music

Here is some excerpts from an interview I did with Rick Goetz from musiciancoaching.com

“I think it’s critical that you have your own website and drive traffic to your own website in any way imaginable, and that you set up ways to do business transactions on your websites. That can be collecting names, cell phone numbers, Twitter follows, selling product, building dialogue, communication, selling tickets and merch. That’s essential.

At Music Power Network and Berkleemusic we teach a lot of people DIY basics. Get your act together, get a website together, have a business partner that is going to help you create a strategy and deal with promotion and distribution and touring and publishing and your finances and the business aspects of your career so you can focus as much time as possible on creating art and getting better and practicing and becoming a better artist. I think that’s essential. Lots and lots of people I’ve seen – musicians, artists – have thought, “I’ll get online and Facebook and YouTube and get a bunch of friends and spend all my time blogging and tweeting.” But if they’re not working on your music, most of the time that other stuff doesn’t matter at all. If you’re not really great, nobody is really going to care.

It’s such a fine balance to strike between perfecting your art and being unique and different and having something to say and getting the word out. That’s the conundrum. We often counsel people that you have to have a business partner. At Berkleemusic we teach entrepreneurship, artist management, how to start your own business, how to run a business, how to market direct and use social media to market, what copyright law is all about, what contracts are all about, how to tour, how to make money, the realities of the different levels of touring and how you can get paid and use that to be a driver of your career.

It’s a huge ambition that we have here at Berklee to try and help create a healthy music industry going forward. If there isn’t a healthy music industry, none of us have jobs, none of our students have jobs and the whole thing goes down the toilet. We have to help people be free thinkers, entrepreneurs, to break the rules.

When we started the berkleemusic online school ten years ago there was no iPod, YouTube, Myspace, Facebook or Apple iTunes store. That all happened in the last ten years. So if you think about what’s going to happen in the next ten years, it’s going to be completely different and almost impossible to predict what’s going to happen. People that want to be in the industry have to be willing to accept that it’s going to constantly change for the foreseeable future. There is nothing you can be sure of, and the things that work today probably are not going to work tomorrow.

God willing, some kid is going to create the next big thing in music like Sean Fanning did with Napster or a new format or a new kind of virtual experience that is as good as a concert. Something like that is going to happen, and who knows what it is going to be?  It’s hard to predict.”

Read the whole interview here. Thanks Rick!

Over the past year I interviewed many successful people from all walks of the music business.  They talk about what is working for them, their artists and writers and how to get ahead in the music business today.

These are music producers, label A&R executives, music publishers, video gamers, music supervisors, entrepreneurs, entertainment attorneys, artist managers, music distributors, marketing executives, and music educators from Electronic Arts, Topspin, CD Baby, Nettwerk, Primary Wave, Newbury Comics, Berklee College of Music and NBC/Universal and many more. Learn from Ian Rogers, Ariel Hyatt, Terry McBride, Jill Sobule, Phil Ramone, Kelly Cha, Mike Dreese, Derek Sivers and others.  Enjoy.

See more at Music Power Network

The tried and true methods of creating success in the music industry are over and are never coming back.  The economics just don’t work for most acts anymore.  The greatest risk in the next 5-10 years for music is that no one will want to fund the development and promotion of new musical acts the way the major labels did in the past, until we see a new financial model.

To survive, musicians and their managers need to innovate and break out of the old ways of thinking about the business.  The oft quoted conventional wisdom that artists can survive on touring and merchandise income is simply not going to work for most bands.  Instead, real blockbuster success in the future belongs to those ready to break the rules and create new engaging musical experiences, and unique products and services that cannot be duplicated.

Music is an inherently social phenomenon and we are already seeing the impact of social media on the way that music is marketed and consumed.  We are connecting fans and artists enabling a broad spectrum of musical search (pandora), concert (songkick) and ticketing innovations and direct to fan engagement (topspin and nimbit).  But most of what has been developed thus far is in support of the way it used to be, instead of the way it needs to be.

Perhaps the next musical breakthrough will come from some sort of interaction between creators and consumers fueling a unique experience that you just have to be there to enjoy.  Nothing to download, just an experience with a limited audience.  A creation of value that appeals to the thumb twiddling electronic generation in ways their parents never even dreamed of.  A way of engaging with artists that true fans will fight to get access to.

How do we get there?  Where is the strategic thinking that will propel the music business forward?  I believe innovation will come from outside the mainstream music companies, the way it has over and over again across so many different industries.  The automobile did not come from the Horse and Buggy makers and refrigeration did not come from the Ice Kings, so why would the next musical innovation come from Warner or Universal Music, or any other indie label for that matter? Just as theatre evolved into motion pictures, then broadcast television, then video tape and dvds to IMAX 3D emersive experiences, so will music continue it’s transformation, propelled by technology and new nimble entrepreneurs.

Musicians of the future need to face the fact that living a life in music is a privilege that they will have to earn through hard work, preparation, innovation and collaboration.   Young artists need to be willing to take risks and push the edges of creative expression by embracing the reality that nothing about music is normal anymore.

The team that may be most compelling for creative artists to form is a strategic business manager, a social marketing manager and a technologist.

We need fresh thinking and risk capital to fund the next wave of musical innovators.   The Challenge for the Music Business is to create value in the place of falling revenue and to energize the new generation of music fans to really support music.  Do you have what it takes to reinvent the business?  What ideas do you have that could light the way into the future?

We will be announcing a competition to award a prize for the best ideas shortly.

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.

Learn more at Music Power Network.

Learn from Grammy award winning producers like David Kershenbaum and Phil Ramone and leading publishers, A&R reps and music supervisors on the secrets of being a successful musician, producer or songwriter.

MPN is my latest project and an online service for songwriters, music producers and independent music publishers. 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 develop yourself as a successful industry professional. 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.

Learn more at Music Power Network.

Another Wordle rendering.

This is how Wordle sees my blog

Here are some ideas that you can use as a musician, band or artist from Music Power Network from artists Kelly Cha, Jill Sobule and J the S. There are a lot more videos like this on the site.

MPN is my latest project and an online service for independent musicians and bands. 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 as a self-sustaining artist in an 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.

Learn more at Music Power Network.

Patronage of the arts is a time honored practice that is still alive and well in the music business.  Many examples of fan financing from Ellis Paul, to Jill Sobule and many others have been reported and detailed recently in this blog and others.  Now a group of musicians from California have put together a very interesting program to raise money for commissioning projects that I hope catches on.  We need more thinking like this in the music industry today.  Effective and creative methods of connecting music fans to artists, writers, composers and producers will help propel the next generation of music making.

Symphony of a Million

“Symphony of a Million” is a 6-month campaign, a commissioning project that brings together composers, performers, and the general public.

The goal is to sell 1 million notes. Purchased notes will be used in not just one single million note work, but rather many new works. Composers will work with performers and compose pieces of varying lengths. The first work to be written will be a 1000 note work for solo marimba composed by Music Academy Online founder, Dave Schwartz, and written for percussionist Nobue Matsuoka. The second work will be a 4000 note composition for saxophone and harp and it will be composed by Anthony Lanman who will be working with saxophonist Dr. Noah Getz and harpist Jacqueline Pollauf who perform together as the duo Pictures on Silence.

* Buy a note for $1

* Each note becomes part of a piece of music composed by award winning composers. Throughout the process we will be commissioning composers to write new works of varying lengths using the notes that you purchase.

* A special “Symphony of a Million” concert, sponsored by Music Academy Online and featuring world-class ensembles, will premier all of the works created using the notes you buy. The concert will be held May 18, 2011, the 100th anniversary of the death of Gustav Mahler, the man who composed the “Symphony of a Thousand.”

* Buy as many notes as you wish. Dedicate the notes to someone special. Help to shape entire sections of new music with the notes you select! Your name (and theirs) will forever be part of the final scores.

* Encourage your friends and family to buy notes.

Find out more here.

A friend just sent over this post on how the newly elected Chairman of the Entertainment Retailers Association,  said that illegal P2P filesharing is the greatest challenge facing entertainment retailers and urged members to lobby Government for a crackdown on a problem he said “is bleeding our industry dry”.

Speaking at the association’s annual general meeting, Quirk said, “Too often the debate over illegal filesharing is portrayed as an ideological battle, but for us this is a commercial matter. Illegal filesharing is damaging our businesses, both physical and digital, on a daily basis, and the Government needs to tackle it swiftly and decisively in order to protect jobs, businesses and investment.

“First the filesharers targeted the music business and the Government did nothing. Now the filesharers have come again for TV and movies. Unless action is taken the filesharers will come for computer games, books, in fact anything which can be digitised and what will be at stake will be not just the entertainment industry but huge swathes of the UK economy. We need action now.”

Read more of this insanity here at Mi2N

Well now…

I was visiting with my Dad last weekend and thought of an interesting parallel between digital music and encyclopedias.

When I was a kid, my father had a summer job going door to door selling Comptons Encyclopedias.  He would carry a couple of these huge books under his arms and try and get the husband or wife to buy the complete Comptons collection for the kids.  This was big business and my dad made a healthy living during the summer.

Well, over the years the encyclopedia book business began to dry up.  To start it all off, Comptons put their entire encyclopedia library on a CD-ROM and sold it via a new company they formed, called Comptons New Media.  They put the CD-ROM in a chipboard box and sold it at Comp-USA,  Software Etc and other retailers for $200-$300.  It became big business for a while in the early 1990’s, and Comptons New Media flourished and was eventually purchased by the Tribune Co for a lot of dough.

It didn’t take long before some hackers cracked the CD-ROM and then pirated versions of the whole enchilada began making their way into stores and online outlets.  By now, of course, the multi-volume Comptons Encyclopedia Book business had gone the way of the dinosaur, and countless pavement pounding salespeople were no longer going door to door selling encyclopedias – and the entire book business basically went away.  Gone in a matter of a few years.  I think they still sell some to schools somewhere.

The same thing soon happened to Comptons New Media as digital competitors emerged, from Microsoft “Encarta” and others, and soon price competition and the internet gave way to this information moving online for free.

Now we have something called “Wikipedia”.

–

The information contained in the encyclopedias is still being researched and published and edited by now, tens of thousands of people who put it online in a living, dynamic format.  By and large, no one is getting directly paid to do this work, yet no-one can dispute the fact that society in general is benefiting from Wikipedia and other community-based information resources.  You might even notice that there is a lot more information being produced and updated and cross referenced than ever before.  This is all without the infrastructure of the past (ie Comptons) being in-place anymore, and almost no money changing hands.

Just like Comptons, the record industry digitized all of its assets and put the entire thing out there for the public to enjoy.  And just like Comptons the record industry in now suffering from price erosion, shifting formats and piracy.  They can try and hang in there and bash the problem away with legislation, or they could seriously consider other methods of delivery and renumeration, or they could sell off their remaining assets and shut down.  No matter what, the game they have played is over, caput.  Time to face the music and change.

There are no guarantees in business that things will remain the same.  Indeed, the only real constant is change and businesses that try and hold onto the past will be crushed by their own weight and failure to adapt, or in some cases, to just shut down.  Nothing is forever except change.  People should stop complaining about it and start working on creating a future that benefits us all.

Do I know exactly what that future is going to be?  Of course not.  I wish I could say with certainty but I can’t – for now.  But I think it will look a lot more like wikipedia than comptons encyclopedia sets.

I ran into Jim Griffin this weekend and as usual, he got me thinking about music and it’s future. We talked a little bit about Chorus, the new controversial Warner Music backed company trying to create a music utility service for colleges. I’ll tell you the guy is like a bolt of lightning and his fever can leave you doubting what you know yet somehow I always come away with something new to think about and ponder. I listened to him speak briefly and then found a transcription of a similar speech he gave at Midem last year which I wanted to share with you. The complete speech is here: Jim Griffin Speech and a brief excerpt is below. Enjoy!

“It sort of struck me once, I was reading Marshall McLuhan, and I recommend Marshall McLuhan to everyone here who has not already read some of McLuhan’s work. McLuhan is a terribly influential person in media in the 1960’s, so much so that if you’ve seen the movie Annie Hall you may recall that he appears in that movie with Woody Allen in a line outside of a movie theater, and he’s very well known for having said that the medium is the message. I always wondered what that meant. And now that we live in a time of MP3, I think all of us can acknowledge that McLuhan had it right, that in some ways it’s more about what format something comes in these days than it is even the music itself.

But McLuhan said something else that escaped my notice until say five years ago. He indeed said that you will never understand the media of your time. He said that the media of your time is like the air that you breath. You’re unconscious of it. It’s like the water in which a fish swims. He said that you would only understand your media through the rearview mirror of history. And so it is that it led me back to the library to look through microfiches and so forth from the 1920’s and around that time period, because it was around that time period that electricity started to spread around the world. Before electricity spread around the world, for the most part, it could be said that an artist was in complete control of their art. Especially in the sense that, you know, they controlled it with their feet because if they weren’t in the room you couldn’t see them or hear them. Then in rapid succession over several decades we have the spread of electricity around the world, and loudspeaker systems evolve that make the crowd bigger than you can count. And then very very quickly radio broadcast, and now sounds are traveling many thousands of miles beyond their source. Then television is proven out in 1928. And so now your sound and your image can travel thousands of miles. Now, look, I get how we feel special living in this time that we do of the net. We think, wow, we are beset with change unlike we have ever seen. But I would say that that is absolutely untrue. The 1920’s, the spread of electricity, this was a far more savage time to be an artist. This was a far more difficult time.

Our changes, that we are seeing, are merely a gradation of change by comparison to what happened when electricity spread around the world. And so we have something to rely upon that they did not. We have something to look to, which is: what was their experience; how did they handle this dramatic change. I think that without question the way we handled this dramatic change was with collective licensing. In other words, loudspeaker systems, hotels, restaurants, wherever there are performances of music that are so powerful, we have a collecting society that would like to monetize this, and can and does, monetize the anarchy of music moving through say loudspeakers. And equally true of radio, and television broadcast, and cable, and satellite, and as recently as this past decade, we now monetize webcasting over the net in America in just this same way. And so I don’t think it is a great stretch, or that you have to think too far into the future to realize that it would truly be an anomaly if collective licensing did not extend itself further. It does not require a crystal ball to figure this out.

I think it is just about looking back into history and realizing that the way we have dealt with the loss of control, the loss of actual control, has been with the introduction of actuarial economics. And I know actuarial is a big word, you know, but it’s really simple. It’s just a pool of money and a fair way of splitting it up: a pool of money, a fair way of splitting it up. And that is how we have dealt with the loss of control in the past and I suggest to you it is likely that that will be the way we deal with loss of control now and into the future.”

Our book is available in various forms.

You can listen to the book on iTunes as a podcast for free. Go to the iTunes store and search “Future of Music” podcasts and subscribe.

You can buy the book on Amazon for $11.53 or less.

You can purchase the audiobook from Audible for $7.49.

Here are a few of the reviews.

Publishers Weekly
Two innovators in music technology take a fascinating look at the impact of the digital revolution on the music business and predict “a future in which music will be like water: ubiquitous and free-flowing.” Kusek and Leonhard foresee the disappearance of CDs and record stores as we know them in the next decade; consumers will have access to more products than ever, though, through a vast range of digital radio channels, person-to-person Internet file sharing and a host of subscription services. The authors are especially good at describing how the way current record companies operate – as both owners and distributors of music, with artists making less than executives – will also drastically change: individual CD sales, for example, will be replaced by “a very potent ‘liquid’ pricing system that incorporates subscriptions, bundles of various media types, multi-access deals, and added-value services.” While the authors often shift from analysts into cheerleaders for the über-wired future they predict – “Let’s replace inefficient content-protection schemes with effective means of sharing-control and superdistribution!” – their clearly written and groundbreaking book is the first major statement of what may be “the new digital reality” of the music business in the future.

5.0 out of 5 stars THE FUTURE OF MUSIC IS NOW
Gian Fiero (Hollywood, California)
This book is so brilliant that it makes the vast majority of music industry books that are being published seem irrelevant. It discusses in detail, the reasons why the future of the music industry is headed into the digital/mobile entertainment era. It also provides statistical information that professionals, marketers, entrepreneurs, and educators can use constructively. Both Dave and Gerd (the books co-author), have their fingers firmly planted on current music industry activities and trends. They also possess and display a clairvoyant eye toward the future that offers beneficial insight and foresight to those who may not be aware of what this whole digital (i.e. independent) revolution is about, and most importantly, what it will entail to prosper in it. The book is easy to read, easy to understand and simply brilliant. If you buy just one industry book this year, this should be THE one. Buy it now!

5.0 out of 5 stars Indispensible
Stephen Hill “Producer, Hearts of Space” (San Rafael, CA USA)
A stunningly candid source of concentrated, up to date insight about the music business and its turbulent transition into the digital era. This book tells it straight and will make the dinosaurs of the music industry very unhappy.

Like Martin Luther’s ‘95 Theses’ nailed to the door of Wittenberg Cathedral, Kusek and Leonard drive nail after nail into the sclerotic heart of the old-fashioned music business. Their rational vision of the future of music rests on the idea of unshackling music from the hardcopy product business in a yet-to-be-realized era of open content licensing, facilitating sharing and communication among users, and growing the business to its full potential.

It provides as clear a vision of the future of the music industry as you will find, from two writers with a rare combination: a solid grounding in the traditional practices of the music business, an up-to-the-minute knowledge of the new technologies that are changing it, and the ability to think through the consequences.

I’ve dreamed about a book like this, but thought it would be impossible in today’s hyperdynamic environment where every week seems to bring a breakthrough technology, device, or service. But by digging out the underlying trends and principles Kusek and Leonard get under the news and illuminate it. Along the way they provide a brilliantly concise history of the evolution of digital media.

I can’t think of any book more important for artists to get the full re-orientation they need to survive and prosper in the digital era. It’s no less critical for members of the music and broadcasting industries who need to consolidate their thinking into a coherent roadmap for the future. In a word: indispensible.

An article in Portfolio by Kevin Maney describes the current music industry as “This flurry of experiments is painful but probably necessary, like a teenager’s goth phase. The endgame is clear, however. Sometime in the next decade, ‘free music’ will win. Artists will give away recorded music and consider it promotional, just like music videos. All of the revenue in music will be generated in other ways.”

Read the whole thing here.

An article in Portfolio by Kevin Maney describes the current music industry as “This flurry of experiments is painful but probably necessary, like a teenager’s goth phase. The endgame is clear, however. Sometime in the next decade, ‘free music’ will win. Artists will give away recorded music and consider it promotional, just like music videos. All of the revenue in music will be generated in other ways.”

Read the whole thing here.

Great coverage from Rolling Stone.

While up-and-coming bands may find most of their licensing offers in the $2,500 range, established bands can make much more: from $30,000 at the high end for TV shows to $100,000 for movies and $250,000 for commercials. To introduce last year’s Sky Blue Sky, Wilco licensed six of the album’s songs to Volkswagen for ads. And the veteran duo They Might Be Giants, who have been releasing recordings on their own for the last six years, made a deal with Dunkin’ Donuts for around $1 million to create original music for over two dozen spots, according to industry sources.

Perhaps no band has been more aggressive — or creative — with its licensing than OK Go. When the group treadmilled its way to YouTube stardom in 2006 with the no-budget video for “Here It Goes Again,” it was having the kind of careermaking hit that bands dream about, just as the commercial record industry was tanking. So OK Go manager Jamie Kitman sought licensing opportunities for the group — making deals for its music to be used in everything from TV commercials and video games to corporate seminars and cable TV “bumpers” (the music that’s used to come in or out of a program). Kitman estimates that when all the uses are tallied, OK Go will have granted more than 200 licenses and made old-fashioned hit-record money. “The accepted wisdom now is that no one is selling records,” Kitman says. “So how do you keep the wheels on the bus? There’s a person in my office who spends half her time fielding licensing queries.”

Ian Montone, whose Monotone Management handles the White Stripes, Vampire Weekend, the Shins, M.I.A. and the Raconteurs, says his bands no longer make most of their money on CD sales. “A lot of artists are looking toward touring and merchandising sales at shows, because that market is still vibrant if you grow it methodically,” he says. The Shins have licensed songs for use in commercials for McDonald’s and Zune. Still, Montone says the Shins turn down 90 percent of the licensing deals they’re offered. So why McDonald’s? “Why not?” says Montone. “They have kids and want to own houses.”

By comparison, the White Stripes have focused on touring and coming up with creative merch: The band sells limited-edition CD singles on the road, as well as unique posters created for each show. “We do that because it’s something special for the fans, but it’s also a way to make money,” Montone says. “I think you’re going to see artists doing more direct-to-consumer sales.” The Stripes have already been able to reapportion the record-company pie to their advantage: The band owns its masters and strikes distribution deals with the major record companies on an album-by-album basis.

Those kinds of partnering relationships are also being sought by the major record companies, who are offering artists better money if they sign deals that include more than just recording rights. Generally referred to as “360 deals” because they seek to cover every facet of an artist’s career, including publishing, touring, merchandising and licensing, the new deals are a way for record companies to hedge their bets in a declining record market and to recast themselves as music — rather than just recording — companies.

Advertisement

One of the savviest labels is Fueled by Ramen, which boasts Fall Out Boy, Panic at the Disco, Paramore and Cute Is What We Aim For. “A lot of people hear about 360 deals and think it’s a land grab, but when you own the content, there are so many interesting things you can do,” says John Janick, who started the label in 1996 while going to college in Gainesville, Florida.

Unlike conventional labels, Fueled by Ramen, which has a partnership with Atlantic Records, does everything in-house: from building Websites that sell merchandise and recordings to producing the T-shirts it sells at chains like Hot Topic. In fact, Fueled by Ramen uses T-shirts to introduce fans to new music — both Panic at the Disco and Paramore placed tags on shirts with PIN codes that enabled buyers to download advance singles at home. “We’re creating a culture for each artist,” Janick says. “Obviously everyone is still looking for new ways to monetize recordings, but our company is growing into many other areas, and that’s great.”

Read more here.

Great coverage from Rolling Stone.

While up-and-coming bands may find most of their licensing offers in the $2,500 range, established bands can make much more: from $30,000 at the high end for TV shows to $100,000 for movies and $250,000 for commercials. To introduce last year’s Sky Blue Sky, Wilco licensed six of the album’s songs to Volkswagen for ads. And the veteran duo They Might Be Giants, who have been releasing recordings on their own for the last six years, made a deal with Dunkin’ Donuts for around $1 million to create original music for over two dozen spots, according to industry sources.

Perhaps no band has been more aggressive — or creative — with its licensing than OK Go. When the group treadmilled its way to YouTube stardom in 2006 with the no-budget video for “Here It Goes Again,” it was having the kind of careermaking hit that bands dream about, just as the commercial record industry was tanking. So OK Go manager Jamie Kitman sought licensing opportunities for the group — making deals for its music to be used in everything from TV commercials and video games to corporate seminars and cable TV “bumpers” (the music that’s used to come in or out of a program). Kitman estimates that when all the uses are tallied, OK Go will have granted more than 200 licenses and made old-fashioned hit-record money. “The accepted wisdom now is that no one is selling records,” Kitman says. “So how do you keep the wheels on the bus? There’s a person in my office who spends half her time fielding licensing queries.”

Ian Montone, whose Monotone Management handles the White Stripes, Vampire Weekend, the Shins, M.I.A. and the Raconteurs, says his bands no longer make most of their money on CD sales. “A lot of artists are looking toward touring and merchandising sales at shows, because that market is still vibrant if you grow it methodically,” he says. The Shins have licensed songs for use in commercials for McDonald’s and Zune. Still, Montone says the Shins turn down 90 percent of the licensing deals they’re offered. So why McDonald’s? “Why not?” says Montone. “They have kids and want to own houses.”

By comparison, the White Stripes have focused on touring and coming up with creative merch: The band sells limited-edition CD singles on the road, as well as unique posters created for each show. “We do that because it’s something special for the fans, but it’s also a way to make money,” Montone says. “I think you’re going to see artists doing more direct-to-consumer sales.” The Stripes have already been able to reapportion the record-company pie to their advantage: The band owns its masters and strikes distribution deals with the major record companies on an album-by-album basis.

Those kinds of partnering relationships are also being sought by the major record companies, who are offering artists better money if they sign deals that include more than just recording rights. Generally referred to as “360 deals” because they seek to cover every facet of an artist’s career, including publishing, touring, merchandising and licensing, the new deals are a way for record companies to hedge their bets in a declining record market and to recast themselves as music — rather than just recording — companies.

Advertisement

One of the savviest labels is Fueled by Ramen, which boasts Fall Out Boy, Panic at the Disco, Paramore and Cute Is What We Aim For. “A lot of people hear about 360 deals and think it’s a land grab, but when you own the content, there are so many interesting things you can do,” says John Janick, who started the label in 1996 while going to college in Gainesville, Florida.

Unlike conventional labels, Fueled by Ramen, which has a partnership with Atlantic Records, does everything in-house: from building Websites that sell merchandise and recordings to producing the T-shirts it sells at chains like Hot Topic. In fact, Fueled by Ramen uses T-shirts to introduce fans to new music — both Panic at the Disco and Paramore placed tags on shirts with PIN codes that enabled buyers to download advance singles at home. “We’re creating a culture for each artist,” Janick says. “Obviously everyone is still looking for new ways to monetize recordings, but our company is growing into many other areas, and that’s great.”

Read more here.