Digital Noise: Music and Tech

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.

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.

Follow Matt on Twitter.

Covering Microsoft for the last eight years, I've seen this pattern time and time again. Internet trend comes along. Microsoft watches. Trend picks up steam. Microsoft watches. Some other company--usually a start-up--creates a site that perfectly crystallizes the trend and achieves a surprising spike in traffic. Microsoft creates a product team somewhere in the bowels of its online organization to come up with an answer. Six to eighteen months later, the imitation launches to general yawns in the press and perhaps some temporary spikes in traffic thanks to Microsoft's massive online reach. (400 million-plus registered users--that's the number of Windows Live IDs out there, and it's sure to get you some cross-traffic.) Endgame: obscurity. Think of MSN Soapbox versus YouTube. Or Windows Live Expo versus Craigslist. Or MSN Music.

Give that boy a recording contract!

(Credit: MSN Unsigned)

This takes the cake for me, though. This week, MSN U.K. launched a new site, MSN Unsigned, that proposes to give unsigned musicians a new chance to reach a bigger audience. Sort of like OurStage has been doing since 2007, and MySpace has been doing since 2004, and Sonicbids since 2000, and CDBaby since 1997, and IUMA way back in 1993. Except that MSN Unsigned doesn't let you upload audio clips, create a home page, find gigs, or communicate with your fans. Instead, it's simply a vehicle for bands who own the rights to their music (look ma, no copyright infringement lawsuits) to upload videos via Soapbox, after which MSN will review them and promote a few on the front. Never mind that most unsigned bands don't have the budget to film a video, but every garage band worth its salt has a folder on their computer filled with music clips. Oh, there's also going to be articles and advice, like this priceless set of tips for aspiring guitarists. (Someone tell Keith Richards--watch the sauce!)

In all seriousness, if you're going to do something halfway, why bother doing it at all? It just makes you look silly.

I spoke with Mercora founder Srivats Simpath about three years ago as the company was looking for possible partnership opportunities with Microsoft. At the time, the company's vision and proposed business model seemed a little muddy. Music was involved. There would be some sort of peer-to-peer sharing system, but somehow this would be legal. To differentiate itself from the popular but illegal file-sharing systems used by most of the world at that time, Mercora would have a strong social-networking aspect, with users recommending or voting on songs. I don't remember exactly how the company expected to make money, but I recall telling them that charging subscription fees to end-users is a hard way to go.

If you can't explain your online music service in a sentence, it's too complicated.

Yesterday, the company--which changed its name to Social.fm last year--announced it's out of business. Without knowing exactly what went down, I'll just say that Mercora's was one of many confusing pitches that I've heard over the years. (I sympathize with Rafe Needleman's frustration.)

So, in hopes of turning a negative into a learning experience, here are some very general rules for digital music start-ups:

1. Focus. If you can't describe your service in a single sentence, you're doing too much. Think of the few successes in the digital music space we've seen so far. iTunes Music Store: buy songs and they'll automatically transfer to your iPod the next time you connect it. MySpace (from a music standpoint): people can learn about and sample musicians that their friends and peers like. CDBaby: online CD store for unsigned bands. Pandora: builds a custom radio station for you based on your musical taste.

2. Uniqueness. We've already got plenty of choices for downloading and streaming music--what can you offer that's different? Social networking won't cut it because it's so subject to network effects--the more people are on one, the more useful it becomes. MySpace has been doing social networking-plus-music since 2005 and consistently draws more than 100 million users per month. How will you convince anyone to migrate to your brand new service when all their friends are still on MySpace? I'm not saying it's impossible, but you better have something unique.

3. Music listeners are cheap. This is a hard one to swallow, but any time I'm listening to a pitch or reading about a new online music service and the idea of fees--particularly monthly subscription fees--comes up, I immediately think "fail." It may not be moral or fair, but any fee-based music service has to compete against a huge amount of free music that's easily available to anybody with an Internet connection. So what's the answer? Music listeners are also lazy! You can charge money if--and only if--you offer a significantly easier experience than we could get by frequenting file-sharing sites and other free sources (not to mention ripping CDs from our friends). Again, iTunes is instructive: you pay to download the songs directly into the same app you use to transfer them to your iPod. Saving a few steps is worth $0.99.

A quick aside: musicians are even cheaper, and well-attuned to suspect anything that smells like pay-to-play. Good luck with that.

4. Launch strong. On the day your site goes public, you better have enough capacity and bandwidth to accept all the curiosity seekers. Your site better be so easy to use that I don't have to read the FAQ. And most important, you better launch with all the content (that means licensing deals ahead of time) and features you promised--I feel so burned by Qtrax (just to pluck an example out of thin air) that I'll probably never write about the company again.