Update, 3/24: An SXSW organizer contacted me to let me know that the show included 14 panelists from major labels, as well as 20 panelists from independent labels. The truth remains that I didn't see, hear, or meet any--but of course I couldn't attend every panel. I've corrected the post accordingly.
Almost a year ago, I posted about how two executives from major Web companies had taken new positions related to digital music: Douglas Merrill left Google to become EMI's president of digital operations, and Ian Rogers left Yahoo Music to become the CEO of Topspin, a then-new company specializing in direct-to-fan marketing.
A year later, Merrill's gone, following Guy Hands out the door. (Hands was the CEO of private-equity firm Terra Firma, which bought EMI in 2007.) I'm not sure what he did there, but imagine he was behind the portal site that EMI launched last year...to no effect whatsoever.
Contrast that with Topspin, which oversaw successful launches of several albums and was just at SXSW to announce a major update to its automated marketing platform.
Sure, EMI's taking in far more revenue than Topspin--it's still got The Beatles' catalog, after all, and Topspin's just a start-up--but look at the momentum, the level of excitement, the bottom line. There's no comparison.
At SXSW, the conventional wisdom from every panel I attended, every business meeting I had, and every artist and fan I spoke with, was that the major labels are technological dinosaurs with no chance of survival. I didn't meet a single major label employee in the entire four days I was there, though at the Guitar Hero-Metallica event, the PR coordinator spent a long time explaining to a TV crew that all interview requests had to be approved by the band's label. Ah, the good old major labels we know and love--barriers, not enablers.
(Aside: as much as Metallica may represent the old record industry, its SXSW set absolutely slayed, consisting almost exclusively of pre-Black Album material, and so fast and tight and loud and awesome in the original sense of the word that it seemed like it--and we--were all 17 again. Pitchfork's take is absolutely right; it's not fair to compare them with any of the other bands at SXSW. Long may they rock, with or without the recording industry as we know it.)
I'm rambling, but keep looking. U2's second-week sales dropped 75 percent--nobody cares. Sony hired Rick Rubin to come up with a digital strategy, but nothing's happening (although Rubin remains a successful producer).
The RIAA seems to serve no purpose except to sue customers and try to get damages that are many thousands of times the value of the product infringed. Warner CEO Edgar Bronfman Jr. took home a $3 million bonus after his company lost $35 million and earned his spot on the CEO wall of shame.
Established artists are going independent as soon as their contracts expire--the latest is Counting Crows--and reporting, again and again, how much better they can do without a label.
A year ago, there were still some arguments for the necessity of major labels to handle marketing, promotion, and other tasks. Not anymore. The conventional wisdom now: if you're interested in the music business, and you want to change the world and make lots of money, go anywhere else.
If you're a musician, and you want your music to be heard, go anywhere else. If you're an investor looking for a business with a lot of upside, go anywhere else.
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Guitar Hero: Metallica, which lets gamers play along with the band and its influences, comes out in the U.S. on March 29. Metallica lead guitarist Kirk Hammett spoke to me this afternoon at the South by Southwest music festival about the game and other issues related to music and technology.
Q: With the Guitar Hero game, do you think you'll be reaching longtime fans, or is this mainly a way to reach younger fans who might know a song or two but don't really know Metallica?
Hammett: We'll be reaching fans across the board, longtime fans, fans who've just gotten into us, Guitar Hero fans who might have reached Metallica through Guitar Hero. It works in a lot of different directions. Our demographic gets wider and wider through the years; at our shows we see a lot of kids who are 10, 12 years old, and a lot of that has to do with the fact that their parents have been fans for a long time. And a certain percentage of it is because they're Guitar Hero fans and they got turned on to Metallica through Guitar Hero, and they want to actually see Metallica as a live performing band.
Were you a Guitar Hero player before this?
Hammett: I have to say, I've only really played Guitar Hero once. I'm the kind of person who, if I start playing video games, I don't stop. So a few years back, I said to myself that I have to stop playing because I don't play guitar, I don't eat, I don't sleep. I had found out about Guitar Hero from seeing it in the media, seeing the poster on the wall in the studio where we were recording our album, hearing about it from friends. So I did actually play it once, I played against Lars and I beat him. He plays it all the time. But I had to tell him I had a fair advantage being a guitar player myself.
Do you find there's a split between musicians and non-musicians? I think a lot of musicians look at Guitar Hero and say "I'd rather be playing."
Hammett: I never feel like I'm playing my instrument enough. It leads back to what I was saying earlier about being totally obsessive. I've talked to other guitar players who've played this game, it's apples and oranges, it's a different thought process between this and actually playing an instrument.
Do you think kids growing up today are going to be drawn to games like Guitar Hero instead of learning how to play the guitar? Or do you think musicians will always be musicians?
Hammett: I think it's going to be responsible for creating a lot of musicians, for kids making the leap to playing a real instrument. I have a friend who works at a music instrument store, and he told me that because of Guitar Hero, guitar sales are up. For me, that's a great thing because these kids are being brought up on the music that's in Guitar Hero, it's great music, great classic rock, great classic metal that they wouldn't hear otherwise. It's all just about pop drivel on the radio. They're getting an education through Guitar Hero, and if some of these kids are truly inspired, they'll make the leap and grab a guitar and learn how to play the songs for real.
What about the songs from other bands that are in the game? Did you guys pick all of those bands, and were there any specifics that you picked?
Hammett: Well, I wanted UFO to be in there, but for legal reasons we couldn't do it so we had to settle for Michael Schenker Group. Same thing with The Misfits. We would have loved for The Misfits to be on here, but for legal reasons, we have Samhain instead.
Do you have a recording rig that you use to get ideas down outside the studio?
Hammett: Traditionally, I'll use a small recording processor, which I'll eventually load into ProTools. A lot of the stuff written in the last four or five years, I used (Apple's) GarageBand. Then from GarageBand I put it on a CD and then dumped that into ProTools. GarageBand is really handy in that I can just have my laptop, have my guitar, have a guitar cord, and plug my guitar into the laptop. Once I've tweaked it and modified things, and built upon the ideas, I'll put the music into ProTools, which has become the industry standard. So for me, it's really about GarageBand and ProTools.
So you just go direct, you don't even need a microphone?
Hammett: Sometimes I'll use an Mbox, yeah.
I know they captured a lot of moves for the game, how did that work?
Hammett: They filmed us with sensors on us. It was pretty cool. We lip-synced to the songs, and they got full-motion captures of us playing the music. They did full body scans of us as well.We tried to aim it to be as accurate as possible.
AUSTIN, Texas--I've blogged about Topspin Media in the past--it's the company that handled the staggered direct-to-fan release for the recent David Byrne-Brian Eno album, "Everything That Happens Will Happen Today." At the South by Southwest festival here this week, Topspin announced that it has taken a lot of the lessons it learned from the Byrne-Eno release and applied it to their platform.
Under the Byrne-Eno program, the artists first asked listeners to enter their e-mail address in exchange for a free song download. A few weeks later, they released a streaming version of the entire record, while simultaneously offering various packages for sale at various price points. This was the only way you could get the CD for eight weeks, when it finally went on sale for retail.
Subsequently, the artists used the e-mail addresses they'd collected to send messages about the David Byrne tour for the album, as well as a vinyl release that just came out. It was a very clever and canny way to market a record, and it benefited not only fans but also the artists--they say they earned the equivalent to a record company advance during the eight-week exclusive period.
I got a demonstration of the new platform from Topspin on Thursday morning, and there's a lot of impressive behind-the-scenes work going on there. The process starts with embeddable widgets that the artist (or, really, their management) can offer through their Web page or MySpace page; any fan can then take these widgets and redistribute them on their own pages, allowing artists to leverage their fan base as marketers.
There are a couple standard widgets, including one that lets users enter an e-mail address in exchange for a free download, and another that can be used to share an audio and video clip of some sort (Byrne and Eno sat down and talked about the album).
As these widgets are redistributed, artists can collect detailed information about who's putting them where, paving the way, for example, for a scenario in which an artist could offer free backstage passes to its 10 biggest promoters. Further down the line, when the artist is selling an album, Topspin enables the collection and storage of more information about fans (such as their ZIP codes). Such data is later used for promotions such as targeted e-mails advertising a local gig. Giving personal data is opt-in; these are fans getting information about an act they like, not random spam or cross-marketing.
Topspin's not intending to go broad--musicians have to have some history or traction before it'll take you as a client (management's basically required; a label is nice). The company is not looking to get into the distribution game, either. But I think that this type of direct-to-fan marketing is soon going to become standard-practice, at which point it'll be interesting to see how Topspin differentiates itself from the labels...or, perhaps the labels will just outsource this kind of work to them.
A couple weeks ago, I wrote about how Seattle company Melodeo had created an iPhone application for the band Presidents of the United States of America, which delivers the band's music in a direct stream, rather than forcing users to download (and pay for) each song individually.
On Thursday at South by Southwest (SXSW), digital-marketing and distribution specialist The Orchard announced that it's adding iPhone applications to its arsenal of tools.
The Orchard handles songs from more than 14,000 acts, focusing on musicians on independent labels such as Amphetamine Reptile, Ipecac, and Lookout (just to name three with which I'm familiar). Now artists--or, more likely, their labels or management teams--will be able to create a customized iPhone app through The Orchard's standard set of management tools.
The iPhone applications themselves will be developed by design and branding firm Fluidesign.
Artists will be able to offer as many songs as they like as free streams (a link will let users click to download the songs from the iTunes Store), as well as post photos and aggregated news from various sources (such as RSS feeds or Twitter streams, if the band is into such things). Musicians will be able to set their own prices, but The Orchard envisions this as a promotional tool rather than as a revenue generator, so it is encouraging its clients to offer them for free.
The first app available is for The Black Lips, but when you run a search for that band's name in iTunes, the app shows up listed only as Mobile Roadie, the name of the platform for iPhone apps developed by Fluidesign. This link will take you directly to the application in iTunes.
AUSTIN, Texas--Thanks to everybody who came out to hear the Artist as Entrepreneur panel on Wednesday at South by Southwest. I had a great time doing it, and I enjoyed my (too short) interactions with the other panelists and with the audience after the show.
We were pressed for time at the end, so I wanted to share some random thoughts and reactions to some questions that I didn't have time to address.
Touring.
Here, I tend to agree with Adam Lewis from Planetary: if you're still opening up on a Tuesday night in your home town, you should probably stick it out there for a bit longer.
Overall, you tour when there's no more reason to stay home, either because you're ready to expand your audience, or because the city's too jaded and isn't giving you the love you think you deserve. (I know bands from Los Angeles and New York who love to tour because they get a much more enthusiastic reaction in small college towns than they've ever gotten at home.) In this latter case, though, think of touring as an investment--you're not going to make money on it the first time out.
Is it necessary for band mates to get along?
Someone asked if you have to all get along to do business together. Some of the greatest music ever created was made by bands whose individual members hated each other--look at The White Album, recorded almost as three separate solo albums by John, Paul, and George, or some of Jane's Addiction's final shows.
But if a band doesn't get along with its agent, manager, or label, it should sever that relationship as soon as it can get away with it. That kind of suffering may be worthwhile in the name of art; it's not worthwhile in the name of business.
Recording yourself.
One person asked for specific tools and services that we'd recommend, and at the end, I mentioned that one of the best investments a live performing act can make is to record every rehearsal.
Not long ago, a cheap but surprisingly effective way of doing this was to plug a PZM mike into a four-track recorder; nowadays, I'd use a laptop with simple audio-recording software like Audacity (great, free, open-source).
The slightly more expensive way of doing this used to be a digital audio tape or MiniDisc recorder; now I'd recommend high-end digital recorders with built-in stereo mics like the Olympus LS-10 or Sony PCM D-50.
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AUSTIN, Texas--At South by Southwest here, I had a short but interesting conversation Wednesday afternoon with Tim Quirk, the vice president of music programming for Rhapsody, wedged in around a set from Jersey punks Titus Andronicus (who had very tight and well-constructed songs with incredible energy and some interesting triple-guitar work, but I don't know if the singer's going to make it another three days).
Quirk, who's been with Rhapsody since before it was acquired by RealNetworks, suggested that streaming music on demand will change the mechanics of the music business because artists (and other stakeholders) won't be compensated based on how many people buy a song or a record, but rather on how many times people actually listen to it.
For labels, it won't make sense to sign cute, disposable artists, and prop them up with hired-gun songwriters and producers in hopes of selling a couple million units over a single summer. Rather, the real moneymakers will be bands whose fans absolutely can't live without their music, and who listen to songs over and over again, for years.
That requires finding artists who already have sizable fan bases and then cultivating them over the years. Terrestrial radio might become even less important--there's no reason to saturate the airwaves with a single song in hopes of selling as many copies as possible before the buzz moves to the next thing; instead, you'll want word to grow more organically, creating lifelong fans along the way.
Of course, this is all predicated on a big "if": somebody has to find a business model for streaming music that works for all parties involved. First, money has to change hands--whether it's through users paying a subscription (the Rhapsody model) or advertisers paying to reach those users (the model espoused by Spotify and others). Then the operators of these services will have to convince copyright holders to accept a level of payment that doesn't drive the operators out of business.
That level of payment may be lower than the percentage derived from CD sales today, which is a big stumbling block for labels to accept. But in the long run, streaming music will lead to greater music consumption overall. When you have no limits on the amount of music you can sample, you're more likely to become a music geek.
Quirk had some statistics to bolster this point: in traditional CD sales, nearly 50 percent of the revenue comes from the top 100 selling records. With Apple's iTunes, it's about 33 percent; lower prices translate to people willing to sample more music. With free peer-to-peer networks, it's less than 30 percent--again, it makes sense that users would sample more music when it's free.
With Rhapsody, it's even lower--less than 25 percent. I suggested that that's because Rhapsody self-selects for music geeks--who else would pay a subscription for unlimited music? But Quirk countered that his usage statistics suggest that Rhapsody turns people into music geeks. That is, once people realize that they can consume unlimited music for the same price, they begin exploring related songs and bands, checking out recommendations from friends that they never would have bothered with otherwise, and so on.
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What should bands pay for? Can art and marketing coexist? Has the digital world made do-it-yourself recording, marketing, and distribution easier, or do musicians still need the old-fashioned triumvirate of booking agent, record label, and radio airplay to thrive?
If you're interested in such questions, and you're heading to the South by Southwest music festival in Austin, Texas, this year, check out a panel discussion in which I'll be participating called The Artist as Entrepreneur at 1:30 p.m Wednesday. Most of the people on the panel are in the business of helping musicians use the Web and other digital tools to turn their music from hobby into career--or at least sell a few CDs and get some decent gigs.
Not me! I'm a mere blogger, trying to report as objectively as possible on all these different businesses. I've got a well-developed sense of skepticism, honed by my somewhat-schizoid existence over the last 15 years as a writer and analyst covering the world of high tech (all day, every day), and playing bass in half a dozen gigging and recording bands (from which I've been on hiatus for the last year or so). I hope to provide some balance, or at least the occasional arched eyebrow, if anybody gets too self-promotional.
You can read about the other panelists on the SXSW site, but I've met Panos Panay, the moderator, and talked to him at length about the music business and his company, Sonicbids.
From the artist's perspective, Sonicbids charges subscription fees for creating and maintaining an electronic press kit, then provides an automated system for submitting that presskit to get gigs--including some pretty big ones, including SXSW, Seattle's Bumbershoot, and the Vans Warped Tour. (Full disclosure: Panos invited me to be on the panel, for which I get a free badge to the show. I'm covering travel and all other expenses out of pocket.)
Also on the panel are Derek Sivers, who founded online music marketplace CD Baby (which I write about all the time) and left last year to form a new business, MuckWork. I've also blogged about TuneCore, an online marketplace for digital downloads from independent artists, whose CEO, Jeff Price, is on the panel. I'm looking forward to meeting the other folks on the panel and hearing their stories.
Apart from that, I'll be meeting with a bunch of other companies that straddle the edge of music and technology, catching as much music as I possibly can, and if all goes according to current plan, I'll be talking to Metallica for about five minutes on Friday about its upcoming Guitar Hero game.
I'll blog as much as I can, and you can always follow me on Twitter.
Actually, King Cobra is no longer with us, but judging from the band's name, I probably wouldn't have gone anyway.
Bandloop is a relatively new service that helps you find live shows in your area.
I had mixed feelings about the Web version of the service--I'm not so fond of the way it forces you to pick favorite bands to follow--but today, I had a chance to try out their new free iPhone application, and I'm very impressed. It's a cut above the iPhone version of JamBase, a long-established gig-listing service.
The Bandloop app is simple, as all good iPhone apps should be. If you've got a 3G iPhone, you allow Bandloop to find your location. Bandloop consults its database of shows (which are mostly entered by members) and geocoded venues. Then it displays a map centered at your location with all of that day's local shows displayed on the map.
You can view a list of shows for more information, and toggle between today and tomorrow. That's it. There's no connection with the personalized Bandloop service, which makes perfect sense--if you're out with your iPhone, you don't care that Widespread Panic's coming to town later this month. You want to know what's going on right here, right now.
The only flaw I could find was a listing at a club that went belly-up last month, but that's not Bandloop's fault--listings are contributed by users, so it's garbage in, garbage out. (Most likely, the person who listed the gig didn't go back to delist it when the club went under.)
This is going to be incredibly useful at South by Southwest next week. The music calendar is daunting to say the least, and I've never been to Austin, so I don't know where any particular club is located. With Bandloop, I can just scan and go.
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I've been invited by Sonicbids CEO Panos Panay to speak on a panel at SXSW later this month entitled "Artist as Entrepreneur," and as I've been thinking about the subject, my attention was drawn to this recent post on CD Baby's bulletin boards (it was first posted elsewhere). Katie Taylor, the artistic director of Opera Theater Oregon, is worried about the rising perception that art--particularly music--should be available for a very low price or free.
(Credit:
CD Baby)
To change this perception, she argues, artists need to convince the general public that there's a fundamental difference between a casual hobby, like a basement-band jam session, and actual art. As she explains, putting on a high quality show for the public is more like planning a wedding. It takes tons of time, talent, and preparation. This kind of art can't continue unless the people putting it on can earn a living wage. And the only way for them to earn a living wage is for consumers to be willing to pay, either through taxes and public funding or directly out of their pocket. If the general public continues to view art as a low-value option that should be available for free, then all art will descend to the level of basement-band jams, and society will be the worse for it.
I've been in both basement bands and "real" bands that are trying to sell recordings and charge for gigs, and there is a hundredfold difference in the amount of effort musicians put into each kind of band. Unfortunately, most listeners are completely unaware of the difference. (It's probably the same for all kinds of art.)
In the case of music, there's a core audience--I'll be generous and say it's around 1%--who understand and care deeply about music, who use their ears more than their other senses, and who couldn't live without it. The other 99% attend shows and buy CDs for other reasons--to fit into a peer group, to stave off the boredom of another evening at home watching TV, to attract a mate, and so on. This isn't conjecture--a Columbia University study I've cited several times strongly suggests that a particular song's popularity is influenced primarily by the opinions of others, and has no relationship to its objective quality (as measured by a control group where listeners voted without being able to see how their peers were voting).
Art's not food. It's a luxury, not a necessity. Which means that the only way for an artist to make money is to draw some of that 99% who feel they don't need it. Somehow, you have to convince them that your art is different, and is worth paying for. And the only way to reach that tipping point is--here's an evil word--marketing.
There are many ways to market your music, including some that seem more organic or "honest" to some artists because they rely primarily on word of mouth. The Internet and the rise of digital music has made it easier than ever to get the word out--MySpace and CD Baby are the bare-bones minimum for starting bands, and there are dozens of other online services that help accomplish specific tasks, from licensing your music for commercial use in film and TV to helping you get gigs.
Or, if you're still too lazy or pure to market yourself, there are plenty of organizations that will help you. Just the other day, I talked to a new company called The Republic Project that will create a digital marketing and distribution plan for semi-established bands in exchange for a cut of pre-release sales. The highlight: they're giving artists handheld digital video cameras so they can create videos of their recording sessions. Then Republic will post these videos online in hopes of building fan anticipation for a new album. It may not work, but making this kind of marketing effort is vital.
My point: the inherent value of art to the creator is very high--I value the experiences I've had playing music more than many other things in my life. But the inherent value of art to the consumer is almost zero. This is jarring to a lot of artists, but must be acknowledged if you expect to make money with your art in this cold commercial world.
If you build it, they won't come. If you build and market it, you have a chance.
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This year's South-by-Southwest Interactive seems to have reached a kind of critical mass, with lots of smart and opinionated people converging around a rapidly changing industry, creating the kind of excitement that used to be found at CES or (way back) Comdex.
This year's South by Southwest Interactive conference seems to have reached the kind of critical mass that used to characterize CES and Comdex.
Forget about Business Week reporter Sarah Lacy's awkward on-stage interview of Facebook founder Mark Zuckerberg, which has been amply detailed elsewhere (although watching them might have been akin to the uncomfortable pleasure of watching a fight at a hockey game). I really wish I'd seen the panel discussion on ad-supported music. According to a posting on PaidContent.org, it degenerated into a shouting match, with a Capitol records exec saying he needed more Internet promotion like he needed a root canal without anesthetic, RCRD LBL founder Peter Rojas dissing iTunes as irrelevant, and audience members yelling that Rojas doesn't respect intellectual property. (RCRD LBL is essentially a music blog with free music provided by bands as a promotional tool.)
There was also a presentation by Apple engineering manager Michael Lopp (aka Rands in Repose, he of the greatest guide to Vegas ever blogged), in which he discussed the company's unique approach to design--think painstaking mockups and brainstorming, both of which are taken seriously rather than treated as afterthoughts or mere team-building exercises.
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