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Thursday, August 4, 2011

60% Of Warners Artists Have 360 Deals

On a recent earnings call Warner Music Group CEO Edgar Bronfman revealed an interesting statistic; 60% of all their artists now have 360 deals with the labels. For those of you who've not been paying attention, a 360 deal is when the record label shares in all of your revenue streams from touring, merchandise, publishing, films, etc., and not just from music sales.

This is sort of like having your uncle who owns a clothing store be your manager. He may be able to get you into some nice stage clothes and even supply you with some dough for recording or tour support, but what does he know enough about the rest of the music business to help you at all? Same goes for signing a 360 deal with a major. They're not even that good with selling music these days, why trust them with everything else?

Bronfman also went on to say that a full 50% of their revenue came from areas of the business that did not exist in 2004, with the previously mentioned 360 deals a part of that.

Despite all the bluster, WMG still lost $46 million dollars last quarter, which they're touting as some sort of victory since they lost $55 million last year at this time. About the only good thing that I could see was that their total digital revenue grew 13% to $203 million, but that doesn't matter much when your bottom line is in the red.

The interesting thing about all of this is that WMG is in the running to buy at least some of the assets of EMI, who's price seems to be actually increasing by the day (supposedly there are at least 10 bidders, which is a total surprise). Warner's still has over $2 billion in debt, and even though new owner Russian billionaire Len Blavatnik has some mighty deep pockets, this isn't the part of the industry that I'd be speculating on, especially with such a high debt ceiling.

Another thing that's interesting is that Bronfman mentioned how "early traction is encouraging" when speaking about streaming service Spotify. That's all well and good, but believe me, no one's going to get rich on streaming music, especially after the first big license fee that a label takes in. It sounds like a good story to the stock analysts though, as major labels keep on dangling that carrot, and people still appear to be trying to catch it.

Bottom line - WMG lost a ton of money last quarter despite a big rise in digital music revenue. That one fact says it all.
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Wednesday, August 3, 2011

5 Tips For Fan Motivation

The other day I spotted a nice post on Hypebot regarding turning your fans into marketers. It came from Sanjay Dholakia, CEO of Crowd Factory, who posted about motivating your fans in such a way that they become guerrilla marketers for your brand. "How To Turn Your Superfans Into Guerrilla Marketers," written by Dholakia, is a quick intro to the concept of the "superfan" or "your tribe" and how they will market for you if they're rewarded appropriately.

In brief, these are his 5 tips for superfan motivation (my take in italics):
1. Offer exclusive content. This can be behind-the-scenes videos, song remixes or outtakes, special invites to shows or after-show parties, or any number of other possibilities. The fact of the matter is, a true fan loves even the smallest detail, and that can be used to your advantage.

2. Raise the rewards as sharing increases. The more the fan markets for you, the more he/she is rewarded, which increases the motivation yet again.

3. Provide a platform for expression and reward that activity. This is necessary for growing your tribe. Your fans need a forum both to talk to you and to each other.

4. Recognize loyalty with prizes and public status. A shout out from stage, on a blog, tweet, Facebook post or just about anywhere else goes a long way to maintaining that loyalty.

5. Help them do good. Help your fans give and volunteer for a good cause.

The first four items are points that I have espoused both on this blog and in my book, Music 3.0: A Survival Guide For Making Music In The Internet Age. They're the basis for the tribal concept of fans as set out by Seth Godin, and are necessary to maintaining and growing any fan base. The 5th point is new in that it also adds a charity element to the others. People enjoy giving to and volunteering for good causes, which can add extra luster to your brand that can go beyond the benefits of the other 4 points.

Follow these simple tips and you'll find that not only will you keep your fans, but they'll help recruit even more for you. 
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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.

Tuesday, August 2, 2011

The Big Money Artists Won't See

If you're signed to a major label you already know how hard it is to get paid, and how much harder it is to get what you're owed. It's in the DNA of labels to find every reason not to pay you, but I bet you thought you'd get a nice payday when you heard that Apple paid the majors a $150 million license fee for iCloud or then Spotify also made a large deal as well.

Here's the sad truth. Record labels only pay royalties on sales. A blanket license deal like Apple and Spotify just paid is not seen as a sale, so all of that money goes to the bottom line of the label, and none towards the artists.

How about the extra money generated by the yearly subscription fee to iCloud? Not a sale, so no royalties. How about from the Amazon and Google cloud services? They never signed a license agreement and paid any money in the first place, so no royalties.

Still want to sign with (or be signed to) a major label?
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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.

Monday, August 1, 2011

Google+ Circles For Artists

I spotted this great article from Scott Horton on Music Think Tank recently about Google+. Of the many tips, the ones I like the best were about Circles, on the the most powerful features of the new service. Take a look. You can read the rest of the article here.

"Circles is where the magic of Google+ takes place. You can create as many Circles as you want, and add people by simply dragging their info into a Circle. Once your Circles are created, you can share content to select Circles as well as view content streams from specific circles. Artists should start by importing their mailing list addresses into Google+, posting their info on their existing marketing channels (facebook, twitter), and inviting those not yet using the service to join. 
Now that you have your contacts, it is time to organize your Circles. It should be noted that your Circles are private, so others cannot view or be offended by your organizational decisions. Some possible Circles include:
  1. Industry Representatives: You probably only want to share updates concerning your latest releases, videos, and press content with industry folk who may be following you as they are less concerned about the burrito you just consumed.
  2. Fans: This is where you can share the content your fan base enjoys reading. Let them know about your whereabouts, experiences, touring or recording progress, post photos and music etc…
  3. Breakdown the Fan Circle into smaller circles to have more defined targeting. For example, create Circles for different areas of the country and international fans to ensure you aren’t over promoting shows to fans thousands of miles away. If your fan base includes young teens, young adults, and older adults, consider categorizing these contacts as well. Each group prefers to be spoken to in different tone and filled in on different activities. Sometimes even male and female Circles make sense.
  4. Other artists: Much like yourself, other artists are learning from experiences, trying out new marketing ideas, using new services etc…Follow what others are doing and share what you know with others in your position. 
  5. Following: Much like Twitter, you can follow others without being Circled back. This is good for keeping up with informative figures who may not call for reciprocal sharing. 
Knowing which content your various Circles enjoy receiving will help ensure that only the most suitable posts make it to their stream."

You can read the entire article here.
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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.

Sunday, July 31, 2011

The Concert Industry Is Feeling The Heat

The concert industry has always felt recession proof. The theory was that in bad times, people still purchase entertainment to take their minds off their troubles. This may be so, but last year the concert industry found that there's a limit to how much they can spend, regardless of the entertainment.
"2010... was the single largest year-over-year decline in the history of the live event business, straight up, in the 35 year history of Ticketmaster and I think anywhere else," said Ticketmaster CEO Nathan Hubbard in a recent  interview with Topspin CEO Ian Rogers.  "You have to take a step back and say, 'Why? What is the fan telling us that isn't right about the business?'"   
I guess Nathan hasn't purchased a ticket to an event lately. Not only are events of all types overpriced, but the extra "convenience" charges are a serious impediment to people purchasing. I know I personally won't buy any ticket that if I have pay a convenience charge on.
"We've got a fan experience problem, first and foremost. There are things about buying the ticket that suck.  There are things about going to the show that suck. Price is still an issue for fans."
OK, let's start by not charging for printing out your own ticket (this is such a ridiculous charge it defies logic). How about instituting paperless ticketing to keep the scalpers out of the business (none of the lame excuses of why it doesn't work hold water)? How about an all-in-one ticket that includes parking and beverages? How about a discount if you choose one of these?

It's great that Ticketmaster is aware of these problems, but let's see them finally do something about it. Don't hold your breath though, they don't care about you, only their shareholders. This is another example that proves that any company in the entertainment sector that goes public ends up being bad for the public. You can't dictate creativity in any part of the entertainment business from the boardroom.
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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.

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