indiegoradio-blog

[indiegoradio-blog]

This breakdown of the recording industry's problems and future is from 2009, but still pertinent and thought-provoking.

It is neither the changing needs nor the piracy of music that are the real problems. To the contrary, more people want music, and more music has been produced than ever. The real problem resides in the business value chain between the artists and the music fans. The four large Majors have been for years capturing the majority of the profit without distributing any benefit to members of the value chain (see Steve Albini example). Majors have managed over the past decades to centralize both the supply side (artists) and the distribution channel to their financial advantages, turning a creative experience into a sellable, marketable and merchandisable product. In forcing consumers to pay a high price on music, and in forcing artists to sign multi-release contracts that barely help them to make a living out of their creative passion, Majors have succeeded in alienating the key actors of their industry.Majors are in the business of selling units with maximum profit for themselves, not connecting music fans with artists.

[indiegoradio-blog]

The Future of Music Coalition breaks down how artists, labels, and songwriters are paid via a number of distribution channels and methods. Bandcamp is the notable newcomer that's not on the list, have any other distinct players come onto the scene since 2009?

[indiegoradio-blog]

Canadian musicians Sarah Slean, Royal Wood, and Darcy Yates discuss the past decade in Canadian music.

Sarah: We can’t forget to mention the digital age dawned in the early 2000s. The whole music industry transformed and a label wasn’t the brass ring anymore. The label empire changed.

Darcy: I don’t think musicians sell records anymore and we’ve all had to find alternative routes for making money. In the ’90s, I had a whole different view of corporate sponsorship than I do now.

Royal: In the ’90s, licensing music to a commercial or a television show was seen as selling out, but now that’s one of the only ways to get your music heard if it doesn’t have a dance beat.

[indiegoradio-blog]

Kevin Kelly predicts that soon no one will own anything--instead the digital revolution means subscriptions and rental services are the way of the future. He concludes "Access is better than ownership."

Kelly wrote this in 2009. Is this trend still growing as he predicted?

[indiegoradio-blog]

But what happens when music becomes ubiquitous and everyone is making it and the price for music drops to zero? That's the future. For all the arts. Sad but true. Well, not really that sad for as Man Ray once said: "A bad cook, a bad doctor, a bad judge; these people can kill you. But a bad artist?" I should clarify, the copies will drop to zero. The experience of an audience's relationship with artistic human expression, well, that is priceless.

Anonymous, responding to "The Future of Music Business Models"

[indiegoradio-blog]

There is one thing missing in [Mike Masnick's] CwF equation, which is "get fans". You cannot connect with nothing. It's the reason why for almost every example you give, I can easily say "they already had a fan base". There are only a couple of examples who are actually working by starting with NOTHING, and moving up. When you take a band with an existing an existing fanbase to work from, they can much more easily connect with them (they have been doing for a long time). In the end, what is missing is the two steps: How to get from zero to "some" and to get from "some" to "enough". This is what the labels "use to do", so how does it happen now?

The Anti-Mike, responding to "The Future of Music Business Models"

[indiegoradio-blog]

I would add a few things that help when getting fans: 1) Really love what you are doing. 2) Be an "ordinary person" when talking with your fans. 3) Make your fans feel that they're a part of something. On another issue I would also add: 4) Don't underprice your scarce goods offerings that eat into your time. People will quite happily pay more than you think for your time. 5) Be generous with the little extras that you throw in.

Richard, responding to "The Future of Music Business Models"

[indiegoradio-blog]

I've heard about the 1000 True Fans idea for years, but never got around to reading the source. I should probably read all of Kevin Kelly's work now.

[indiegoradio-blog]

The Future of Music Coalition has started a project to gather actual data on how the music industry is changing, by interviewing actual musicians.

[indiegoradio-blog]

Mike Masnick lists many examples of artists who are succeeding using the internet and non-standard distribution models, arguing that there's truly only one business model:

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model

The comments are long-running and contain a number of good points and counter-points.

[indiegoradio-blog]

the first thing that struck me as just completely wrong was the assertion that you “hit the internet lottery” and that your still living off those winnings. I don’t think that’s true at all. Every week, heck every day someone “hits the internet lottery” someone’s video goes viral thanks to facebook / twitter or youtube and they become quasi famous. that actually is NOT all that unusual in this day and age. Sometimes people are able to monetize that momentary success (antoine dodson, the david after the dentist family, etc) but that success and income is not only temporary but it’s extremely fleeting. What are the chances that william hung, antoine dodson, or the owners of “clark griswold” (the dog from the viral talking dog video – “what was in there?”) are going to be able to parlay their 15 minutes of internet fame into a long term successful career and revenue stream? Going viral over the internet is not unusual, making something out of it long term though kinda is.

Lance, responding to "On Snuggies and Business Models"

[indiegoradio-blog]

I’m gonna ignore the internet and financial angles of this for awhile and focus on the genre snobbery. I think “novelty” music gets used as a pejorative. It’s like saying, “You had to use a gimmick”. Nay, “People only like this for its gimmick.” There are certainly artists that go for novelty music with their hearts and souls. I don’t think Parry Gripp would describe what his recent solo efforts any other way. But I’d classify you more as powerpop – music à la Cheap Trick, early Cars, They Might Be Giants, Fountains of Wayne – rock music engineered to be enjoyable by many through just anything that would be pleasing to the ear. The way someone would try to make a pop record back when records could be hits by being catchy and fun. Certainly some of your more jesting Thing-a-Week entries (pants and the fanciness thereof come to mind) certainly conjure up the “novelty” label, but in the sense they use it, I think they’re trying to diminish the artistic integrity you brought to the table. Almost as if they’re going “don’t try this at home, kids, he’s just writing joke songs”. As if When You Go and A Walk With George don’t round out your discography wonderfully. Just like BNL will probably always be known for One Week instead of Call and Answer, but those who were on board know the whole story there. They call you a fluke as if you’re the first of your kind, but you’re part of a trend. Artists doing more and more without the major labels. Nine Inch Nails and Radiohead getting their music out there was inspiring to me as a musician, but I was well aware they already had their fans. The fact you got discovered without major label promotion is very impressive, but once again, I like to think of it as a start of something, not a fluke. I’m sure they tried to diminish it as “an internet thing”, but who’s gonna use the internet to discover an artist and make him a superstar? Us geeks will do it FIRST, that’s no surprise, but they’re ignorant if they think other niches won’t follow suit. So to these panelists I say, “You’re wrong. Kids, DO try this at home. (http://www.youtube.com/watch?v=66knvY3vxsA

Dack, responding to "On Snuggies and Business Models"

[indiegoradio-blog]

As an economist I do think they missed the point – that is, which business model best provide goods (i.e., music) to people at the price, quantity and to a quality they desire. From an economic POV, this is the only real question. What happened (and tends to happen with these discussions in general) is that discussion of the best way to meet market demands get confused by discussions of individual property holders right to an economic rent (i.e., the value that can be obtained beyond the cost of bring a good to market). Thus, musicians and the music industry are rent seekers (in an economic sense). That is, they attempt to manipulate the political, legal and economic conditions to increase the price the customer pays for music beyond the cost of production. This is perfectly normal – it is much easier to be a rent seeker than to come with new products that meet consumer demand. For example, it is much easier to bring out new sets of old songs by famous bands you know are popular and to which you own than to find new bands and market their material. Over time people naturally come to believe their rents are “rights” – they develop complex moral and practical arguments that explain why their rents are natural and necessary. This is human nature – very few people like to be thought of as unnecessary. In reality their “rights” are simply the result of a set of legal, technological, political and economic factors that coincided to allow them to monopolize production and marketing at some time in the past. Thus, musicians (sorry) and labels have no more “right” to a certain income that do harriers, buggy whip, milliners, glove makers or four-loom weavers. It hard but true – market demand and technology throws up opportunities and takes them away. Businesses continue to exist because they produce goods people want. People are prepared to pay a certain price for a good (in this case music of a particular type) and entrepreneurs enter the market to sell it to them. If the good meets peoples requirements, then it sells and the entrepreneur win – if not they exit the market. Smart entrepreneurs figure out a way to deliver the good at the price people will pay and make a buck – dumb ones (aka record labels) don’t and go bust. From an economic POV, Jonathan’s business model works in the 21st Century. He delivers a good people want and he makes a living that is sufficient for him to stay in the market. The labels do not. They have a business model that needs to pay for very high salaries for a lot of people (most of them not involved in the actual production of music) and support huge production and marketing costs. This system worked well in an industrial setting but does not work in the current economy. This becomes apparent when you think about music from a historical POV. Historically most musicians never made much money — music was “free”. Anyone with talent that knew a song could sing it and try to get paid. People probably didn’t have all the music they wanted – most of it was probably pretty bad and unless you happened to have a talented musician in your community you could call on whenever you wanted, you didn’t get enough of it. Only when a rich patron or large music hall appeared could musicians make big money and only the very rich got all the music they wanted (e.g., Louis XVII could listen to a string quartet in perfect fidelity at any time). Then technology changed and music (along with a lot of things) became industrialized and was pumped out to mass audiences. People could afford a lot more music and musicians that were popular could earn a lot of money (they did loose variety as they did with other industrialized products but the quality/quantity issues made the trade worth it). Furthermore, the industrialized producers of music (i.e., the labels) made a ton of money too. Ultimately the drive to meet the demand for music meant that the cost fell effectively to zero – when a little extra bit of technology came in and supplies could no longer enforce their property rights, the industrial model collapsed. At this point, musicians and labels found their monopolistic, rent-seeking model didn’t work. What was actually happening was that music was becoming pre-industrial again. The only way to make big bucks is a big concert hall or a rich patron. What Jonathan and others found were a series of little patrons – for the privilege of being given tremendous access and enjoying his music, we are prepared to pay him to do whatever he likes in the hope that it turns out to be something we like (just like Mozart in Vienna). Seen from this perspective, industrialized music was a roughly 100 year phenomena that started with the phonograph and entered with digital revolution. The label had their day and are on their way out. It was this kind of discussion that was lacking – Planet Money (which I love) – really missed the opportunity to have a good economic discussion and got stuck in an argument about “rights” and the necessity of one business model.

Tori Adams, responding to "On Snuggies and Business Models"

[indiegoradio-blog]

Success in most artistic endeavors depends almost entirely on one thing: circumstance. Success as an indie artist doubly so. This sounds remarkably cynical, I know, but think about it; how many excellent songwriters and artists have you heard or seen over the years that have entirely failed to “succeed” (for some undefined value of “success”, but that’s a different rant of mine)? Rarely can anyone tell me that [really awesome band] wasn’t trying hard enough or wasn’t talented and wasn’t writing songs that people want to hear. It could be anything – they weren’t playing the right bar on the right night, or the guy who would kick off some viral revolution on the internet showed up two songs too late, or something. No matter how awesomely talented you are and how hard you work, you can still never get the lucky break you need. You can go to bandcamp.com and go through page after page of great bands following the same sort of “business model” of Mr. JoCo – indie distro, performer-owned rights, open-source creative commons, etc – who will never sell more than a few thousand albums in their lives. Hell, I’m one of them. The business model will work, to an extent, for anyone, but nobody will ever quite replicate it again, because what got many of the successful artists the press coverage needed to really break was the fact that they were the first ones doing it. Those that have suceeded? Sure, talented folks. Your Coultons, your Reznors, your Keatings, your Radioheads. But every single one of them could’ve basically missed it by a day – Trent Reznor could be another weekend warrior instead of an oscar winner if he’d released Pretty Hate Machine a year later. Yeah, JoCo and Zoe tour incessantly, which helps spread the word, but then, a lot of great indie bands tour incessantly, so it’s no guarantee. Code Monkey went viral on the internet – but so did cats asking for cheeseburgers, the trololo guy, and Wil Wheaton, so it’s not exactly something easily predicted and replicated. Maybe someday social science might have a grasp on that, but until then, it’s pretty much luck. Basically, lots of this could be applied to pretty much any endeavor, especially when money is involved. At least something like “opening a McDonald’s” has the benefit of market research and demographics. You can’t really do that for a song, not with any degree of meaning. Pretty much ANY advice you’re going to get about the music industry will boil down to “work hard, be talented, hone your craft, and promote.” That’s not exactly a really specific recipe for anything. Beyond that, it’s probably best to be skeptical of anyone who tells you they have some great tips for succeeding in music. What the talent and hard work really get you more than anything is the ability to notice the opportunity when it arrives. That’s all. Does that kind of suck? Well, sure. But then again if the only reason you’re putting your talents out there as an artist is to just acheive some ill-defined rock-star paragon of success, ur doin it rong.

Eric, responding to "On Snuggies and Business Models"

[indiegoradio-blog]

I was a music journalist for 5 years at a popular publication, and when listening to the Planet Money podcast I was reminded of a certain attitude/demeanor in that mileu that always drove me crazy. Those people are journalists, and in a lot of ways, their lot is determined in a very similar manner as musicians’. They create content for money, and the revenue model is comparable to the music industry if you switch words like “label” with “publication” and “song” with “article”, etc. And they have a distinct fear of people like you for that reason. They see you as a sign of their own (self-perceived) irrelevance (not that I actually think they are irrelevant). I can recall many conversations with other journalists and industry people wherein they pejoratively derided me for paying so much attention to nichey internety music (this was enough years ago that paying attention to trends online rather than on radios and TV was still rare in the mainstream media). All that to say, it’s their own fears and self-imposed unawareness of the new realities of the industry that make them miss the proverbial forest for the trees, and assume you’re a freak because you happen to have an audience that they wrongly assume isn’t worthy of the title “music fan.”

T Smith, responding to "On Snuggies and Business Models"