Future Of Music

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

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.

The entire music industry has been driven by new formats, new music and innovation over the past 70 years. This has been fueled with the passion to be a star and receive the adoration of millions.

Well, I think we might be seeing the beginning of a new music format. A format that engages audiences in experiencing and participating in the creative process in a way that is fun and unobtrusive. Insightful and funny. Playful and inspiring.  The VideoSong.

Jack Conte and Nataly Dawn are the band Pomplamoose and they are generating huge YouTube interest and views with their VideoSong format. They got tens of millions of views in a very short time with this number increasing while you read this. The VideoSong format these two produce is very inviting and addictive, providing a glimpse into the process of recording and creating music.

In the words of Jack Conte, “There’s no hidden sounds, there’s no lip-synching, there’s no overdubbing. What you see is what you hear.  Sometimes, there might be two or three Natalys harmonizing with herself, and then you’ll see those three videos juxtaposed together on the screen.

I love what they are doing here.  A glimpse into what it is to record a song and make things happen like this is so appealing.  Will Pamplamoose really be able to capitalize on their momentum?  We will see.  They are spokespeople for the YouTube’s Musicians Wanted program.  I bet their phone is ringing big time.

Is this the format for the future?  I don’t know.  What I really like is the accessibility and transparency in the creative and recording process that they bring foward.  If they can draw people in even further, that would be great.  They seem very open to audience interaction.

I hope they find a great manager because what they have is really compelling, really great raw talent.

If you’ve ever felt grateful for the list of titles and track lengths that appear when you pop a CD into your player, David Hyman’s Gracenote is the company to thank. It enters all that data so you don’t have to. After Hyman helped expand Gracenote from a tiny metadata venture into the world’s largest database of CD titles and track lists, Sony bought the company for $250 million in 2008. That delivered nice returns for early investors, including Jones and Simon. “I showed them a good time. Then I brought them to Mog,” says Hyman.

Now Hyman has a new vision: fusing portability, social networking and unlimited music streaming at a single site. Mog will deliver this in a new music medium–the smartphone–expected to soon overtake PCs as the prime gateway to the Web. In March Hyman unveiled Mog’s mobile app at the South by Southwest music conference in Austin. With a couple of commands a phone user can segue to a screen offering access to 7 million songs spanning a century. All this to chase an elusive dream: technologically uniting a fractured music market.

His backers are betting Hyman, can succeed in a business that has ruined many a provider of capital. A decade ago a dozen labels dominated an industry drawing $40 billion in annual revenue. It is now half that. Streaming services with cryptic names like Spotify and Pandora now vie for users who listen to music not on CDs but PCs. And what happened to that $20 billion? Some of it was lost to music pirates; some of it to newcomers like iTunes, which takes in $2 billion a year.

Digital disruption of the music industry seemed to offer plenty of entree for new music distributors. Offering its own player and music store, iTunes thrived. But MTV, Yahoo and AOL all tried, then abandoned, selling music online (they now mostly stream it for free). Squeezing profits from online listeners turned out to be dicier than imagined. Smaller operators like Pandora carved out a niche following among “passive listeners.” Type the name of a song into Pandora’s search engine and it instantly produces an entire station around the track. It does this by mapping songs using 400 characteristics, from melodies to orchestration. This musical fingerprint associates one composition with another.

Hyman’s brainchild is a clever hybrid inspired by scrappy competitors. Like Pandora, Mog’s slider bar can be moved to add artists similar to ones you like, building your own playlist. Like Microsoft’s Zune player, it delivers ultrahigh fidelity. Hyman has taken a page from Twitter, too, running feeds from like-minded music fans, allowing users to find new music through “social discovery.”

Can Hyman triumph where bigger brands have failed? He has one edge: Mog’s blog network. Hyman built it by hiring the former top ad salesman at mtv.com, Alex Brough, who integrated content from other blogs with RSS feeds onto the Mog site. Hyman sold ads against this content and split the revenue with bloggers. The site now hosts 1,000 of the largest online music blogs in the U.S. Hyman will tap into this network, mostly using ad inventory, to build Mog’s brand.

To win, Mog will have to score a steep trajectory of subscriptions at $10 per month ($5 more than his PC-based subscription). Mog will also have to deliver “interoperability.” That’s the means by which music in disparate locations, say your laptop and home office, can be married and live together in Mog’s “cloud” (servers back at headquarters). “We’ll be able to add what’s on your hard drive to your Web-based library, grab your playlists and combine all of this legacy data in one place, along with new music from your Mog subscription,” he promises. The streaming service that delivers the best such interoperability should be a big selling point to music junkies.

Of course, if you stop paying, your cloud vanishes. How will that go down with music lovers? “The hard part for people to swallow will be that they won’t own the music they pay to hear,” says Kevin Burden, mobile device practice director at ABI Research. “It’s like leasing a car. You don’t have upfront costs, and you get a new model every two to three years. There’s value to that, but you don’t own it.”

Mog’s competitors think it’s worth the risk. Rhapsody, Catch Media and Spotify all have licensing agreements from music publishers for cloud-based streaming. So does digital music service Lala, bought by Apple last year. Apple recently announced plans to move every iTunes user’s music collection to Apple’s cloud this year. Death of the music download may be at hand.

One burden Hyman shares with his peers is the cost of content. The labels charge up to half a penny per stream per subscriber. European music giant Spotify, now with 320,000 paid subscribers, wants to bring its free service to the American market, but the labels want to be paid more than Spotify can likely afford. That won’t stop Mog’s coming showdown with its larger competitor. Watch for war clouds soon in Europe, as Hyman challenges Spotify on its own turf this summer.

Read more about the difficult work of creating the river of music at Forbes here.

Decades before indie labels and DIY were the norm, and years before women had any real access in the industry, Cris Williamson was busy changing the face of popular music. Cris’s stellar vocals and compelling persona are regarded as legendary for good reason. Despite being like a well-kept secret, and dwelling almost completely in the independent music world, she nonetheless had an impact worldwide. Her now-legendary classic album, The Changer and the Changed, is one of the best-selling independent records of all time. For nearly 30 years, Cris has toured incessantly, selling out Carnegie Hall numerous times and headlining folk festivals around the country.

Here is an excerpt of her interview on MPN where she talks about the importance of gaining a foothold and going direct.

MPN is an online service for music business people and music and artist managers creating the future of the industry. MPN provides online musi…c 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.

To see the full interview, click here.

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.

From a fascinating article just published in the Atlantic. “The Grateful Dead’s influence on the business world may turn out to be a significant part of its legacy. Without intending to—while intending, in fact, to do just the opposite—the band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get tickets—and you could get really good tickets, without even camping out. “The Dead were masters of creating and delivering superior customer value,” Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me. Treating customers well may sound like common sense. But it represented a break from the top-down ethos of many organizations in the 1960s and ’70s. Only in the 1980s, faced with competition from Japan, did American CEOs and management theorists widely adopt a customer-first orientation.

As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren’t greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.

It’s precisely this flexibility that Barnes believes holds the greatest lessons for business—he calls it “strategic improvisation.” It isn’t hard to spot a few of its recent applications. Giving something away and earning money on the periphery is the same idea proffered by Wired editor Chris Anderson in his recent best-selling book, Free: The Future of a Radical Price. Voluntarily or otherwise, it is becoming the blueprint for more and more companies doing business on the Internet. Today, everybody is intensely interested in understanding how communities form across distances, because that’s what happens online. Far from being a subject of controversy, Rebecca Adams’s next book on Deadhead sociology has publishers lining up.

Much of the talk about “Internet business models” presupposes that they are blindingly new and different. But the connection between the Internet and the Dead’s business model was made 15 years ago by the band’s lyricist, John Perry Barlow, who became an Internet guru. Writing in Wired in 1994, Barlow posited that in the information economy, “the best way to raise demand for your product is to give it away.” As Barlow explained to me: “What people today are beginning to realize is what became obvious to us back then—the important correlation is the one between familiarity and value, not scarcity and value. Adam Smith taught that the scarcer you make something, the more valuable it becomes. In the physical world, that works beautifully. But we couldn’t regulate [taping at] our shows, and you can’t online. The Internet doesn’t behave that way. But here’s the thing: if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced. That was the value proposition with the Dead.” The Dead thrived for decades, in good times and bad. In a recession, Barnes says, strategic improvisation is more important then ever. “If you’re going to survive this economic downturn, you better be able to turn on a dime,” he says. “The Dead were exemplars.” It can be only a matter of time until Management Secrets of the Grateful Dead or some similar title is flying off the shelves of airport bookstores everywhere.”

Read more at the Atlantic.

On my way to the TED conference last week, I devoured Jay Frank’s book Futurehit.dna on the plane.  Jay has some great insights into the past, present and future of songwriting and hit making that we can all learn from.  This is a must read if you are composing for the digital age and trying to gain an edge and find exposure opportunities for listeners.

Jay breaks it down for us on the impact of technology on songwriting and how hits of the past have been carefully crafted to fit into radio airplay on to the iPod, Pandora and streaming era.  His insights into how song form, intros, chord changes, repeats, hooks and other techniques connect a good song with a listener are invaluable.

With today’s digital music is it crucial to catch your listeners attention in the first seven seconds of the song.  After that, repeats are key as well as how the complexity of the song changes over time.  Some of this is old news, but the way he relates it to the technology platforms is interesting and valuable.

How you release music and in what form will determine your chances that your songs will be listened to and remembered enough to make an impact.

Technical, detailed, clear and concise Futurehit.dna will get you thinking about how to create a competitive advantage for you and your music in the days ahead.  Highly recommended food for though.

Check it out here.

In the face of insurmountable odds I feel a competition is in order.

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

Here’s a great post by Mike Masnick.

“As you look through all of these, some patterns emerge. They’re not about getting a fee on every transaction or every listen or every stream. They’re not about licensing. They’re not about DRM or lawsuits or copyright. They’re about better connecting with the fans and then offering them a real, scarce, unique reason to buy — such that in the end, everyone is happy. Fans get what they want at a price they want, and the musicians and labels make money as well. It’s about recognizing that the music itself can enhance the value of everything else, whether it’s shows, access or merchandise, and that letting fans share music can help increase the market and create more fans willing to buy compelling offerings. It’s about recognizing that even when the music is shared freely, there are business models that work wonders, without copyright or licensing issues even coming into play.

Adding in new licensing schemes only serves to distort this kind of market. Fans and artists are connecting directly and doing so in a way that works and makes money. Putting in place middlemen only takes a cut away from the musicians and serves to make the markets less efficient. They need to deal with overhead and bureaucracy. They need to deal with collections and allocation. They make it less likely for fans to support bands directly, because the money is going elsewhere. Even when licensing fees are officially paid further up the line, those costs are passed on to the end users, and the money might not actually go to supporting the music they really like.

Instead, let’s let the magic of the market continue to work. New technologies are making it easier than ever for musicians to create, distribute and promote music — and also to make money doing so. In the past, the music business was a “lottery,” where only a very small number made any money at all. With these models, more musicians than ever before are making money today, and they’re not doing it by worrying about copyright or licensing. They’re embracing what the tools allow. A recent study from Harvard showed how much more music is being produced today than at any time in history, and the overall music ecosystem — the amount of money paid in support of music — is at an all time high, even if less and less of it is going to the purchase of plastic discs.

This is a business model that’s working now and it will work better and better in the future as more people understand the mechanisms and improve on them. Worrying about new copyright laws or new licensing schemes or new DRM or new lawsuits or new ways to shut down file sharing is counterproductive, unnecessary and dangerous. Focusing on what’s working and encouraging more of that is the way to go. It’s a model that works for musicians, works for enablers and works for fans. It is the future and we should be thrilled with what it’s producing.”

Read a lot more here.

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.

My friend and Berkleemusic student David Sherbow posted this list of income streams on his blog and it got picked up by Hypebot as well.  This is a pretty comprehensive list of the different ways that musicians can make money.

The artist music business model has been in flux for years. The record deal dream that most artists sought is no longer the viable alternative that it once was.  The leveling of the music distribution playing field by the Internet is virtually complete.  Terrestrial radio is on a path towards destruction that even the major labels can’t compete with.  People now access and download music from multiple sources, usually for free.  D.I. Y solutions are everywhere, but for many artists hard to integrate into their daily lives.

Where does this leave the average independent artist? At the beginning. Every artist wants to know how they can make music, make money and survive to write and play another day. Here, in no particular order, is a list of possible income streams.

• Publishing
• Mechanical royalties
• Performance Royalties from ASCAP and BMI
• Digital Performance Royalties from Sound Exchange
• Synch rights TV, Commercials, Movies, Video Games
• Digital sales – Individual or by combination
• Music (studio & live) Album – Physical & Digital, Single – Digital, • Ringtone, Ringback, Podcasts
• Instant Post Gig Live Recording via download, mobile streaming or flash drives
• Video – Live, concept, personal,  – Physical & Digital
• Video and Internet Games featuring or about the artist
• Photographs
• Graphics and art work, screen savers, wall paper
• Lyrics
• Sheet music
• Compilations
• Merchandise – Clothes, USB packs, Posters, other things
• Live Performances
• Live Show – Gig
• Live Show – After Party
• Meet and Greet
• Personal Appearance
• Studio Session Work
• Sponsorships, and endorsements
• Advertising
• Artist newsletter emails
• Artist marketing and promotion materials
• Blog/Website
• Videos
• Music Player
• Fan Clubs
• YouTube Subscription channel for more popular artists
• Artist programmed internet radio station or specialty playlist.
• Financial Contributions of Support – Tip Jar or direct donations, Sellaband or Kickstarter
• Patronage Model – Artist Fan Exclusives – e.g. paying to sing on a song in studio or have artist write a song for you
• Mobile Apps
• Artist Specific Revenue Stream -  unique streams customized to the specific artist, e.g Amanda Palmer
• Music Teaching – Lessons and Workshops
• Music Employment – orchestras, etc, choir directors, ministers of music, etc.
• Music Production – Studio and Live
• Any job available to survive and keep making music
• Getting Help From Other Artists and Helping Them -  Whatever goes around come around. – e.g. gig swapping, songwriting, marketing and promotion