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Thursday, October 4, 2012

When A Label Just Doesn't Get It

Warner Music Group Logo image from Bobby Owsinski's Music 3.0 blog
When it comes to major labels, some are much hipper than others. Warner Music Group (WMG) has always been thought of as pretty progressive in terms of keeping up and buying into the latest technology, but that doesn't mean that all departments get it.

Here's a rather sad commentary on not only the old-school way of doing business, but bad marketing as well.

WMG recently wanted to alert radio program directors to a new single by the Crystal Fighters. Now most companies these days (not only those in the music business) would simply send an email with a link to a download. Not WMG. Instead they:
  • sent an standard letter via snail mail.
  • included a 104 character link that the music director would then have to type into a browser.
  • didn't indicate that a password was required.
OK, let's count the ways that this is particularly crazy in our Music 3.0 world.
1. Imagine what it cost the label to send this in the first place. There's the cost of the letter and envelope, the 45 cent stamp, and the labor cost of the person printing out the letters, attaching postage and putting these in the mail. Money that didn't have to be spent.
2. You're asking someone to type in a 100+ character URL complete with underscores, slashes and numbers? Ever hear of a QR Code?  
3. Then even if you happen to luck out and get all the characters in the URL correct, find out that you still need an password to download the music.
Of course, it's the poor artist that has to suffer with the end result of this boondoggle. They get charged for an expense that they never should have, plus some bad will has been generated with radio music directors on their behalf.

Boggles the mind, doesn't it?  Click here to view the letter.

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

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Wednesday, October 3, 2012

The Shattered Hit Record Model

CDs image from Bobby Owsinski's Music 3.0 blog
We've all heard the complaints about the current Music 3.0 music industry model: physical product doesn't sell anymore, download sales don't make up for the shortfall, and streaming music cannabalizes sales and pays a pittance in royalties. Then lets heap on the accusation that music today is so formula and soul-less and generally a shadow of what it once was.

A lot of industry vets actually believe this, and like everything, there is a hint of truth in it all.

But then how to do you account for Mumford and Sons new album Bable being the biggest release of 2012 so far with sales of over 600,000 in the first week of release? How do you account for the fact that there's been over 8 million listens of the album on Spotify so far, shattering the record for number of streams in a week? How do you account for the fact that new records by superstars Green Day, No Doubt, Justin Beiber, Nicki Minaj, Madonna and Pink have only sold a quarter (if that) of what Babel sold, despite wider ranging publicity campaigns? How do you account for the fact that the Mumfords did this all without a hit single?

When it comes right down to it, there are two principles at work here that are perennial. They've worked in the previous eras of the music business and they work now:

1) Your music is your marketing. I preach this in the Music 3.0 Internet music guidebook and it holds true on any level. An artist can only build a brand by repeated listens, either through radio airplay, torrents, piracy, streams, downloads and anything else you want to put in here. The more people hear your songs, the more likely you'll find an audience for them.

Music is a marketing tool for the artist. If no one hears it, they won't buy it, or buy merch, or go see an artist in concert. If you limit the way they listen, you limit your marketing ability.

It's important to remember that most major artists never made their fortunes from the sales of music itself. In fact, there are numerous studies that show that record sales were never more than 5% of a major artist's revenue stream. For an artist to cut off Spotify because of the peanuts for royalties pay scale totally defeats the purpose of the service to an artist's brand, as Mumford experience brilliantly illustrates here.

2) Best-selling, long lasting music goes against the grain. Record labels love to follow trends, but they rarely set them. Music history is made by artists who refuse to follow the "hit" formula and choose to follow their hearts and their art instead. Most major artists that have a long lasting career are initially outliers that the industry broadly rejects (the biggest case in point is The Beatles), only to be found by the audience directly.

The English folk music of Mumford and Sons is so far away from the mainstream that the fact that they've had a hit with their first album (Sigh No More) and look to have an even bigger one with Babel is a shock, but it proves the point. The audience found the music before the industry did, and the music doesn't following what's currently considered the norm.

And how about Adele? Her 21 now has sold over 24 million worldwide and is about as far away from what's considered the mainstream today as you can get. But people the world over love it because for exactly that reason. It comes from the right place - the heart.

The moral here is that so many of the industry "truisms" aren't actually true at all, but the two above do seem to stand the test of time.

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

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

4 Rules For Crowdfunding

Crowdfunding image from Bobby Owsinski's Music 3.0 blog Here's a post from a couple of years ago that I thought I'd repost, given the every increasing interesting in crowdfunding.

Crowdfunding is becoming a popular way to finance a recording project, thanks to sites like KickstarterMyBandStockindiegogo, Rockethub and Sellaband, among others. Regardless of which site you use, the idea is the same - it allows your fans to pool their money in order to fund your project.

If crowdfunding is something that you'd like to pursue, here are 4 rules to help your campaign be successful.

1) Choose an attainable goal amount. Everybody would like a $100,000 budget to work with, but unless you have a large fan base to begin with, you're probably dreaming if you think you can raise that amount. Even a once-huge selling band like Public Enemy had to cut their goal from $250k to $75k, so be realistic in both what you need and what you can raise.

2) Concentrate on low price points. Kickstarter's data indicates that $50 is the optimum investment point, closely followed by $25. While most artists also include amount in the thousands as well, don't count on these being filled.

3) Make sure the investment reward is sufficient. Remember that you're not getting a donation, it's an investment and your investors will expect something in return. Check out this list of incentives from Hind as an example. Of course, one of the most brilliant list of incentives comes from Josh Freese (Perfect Circle,  Nine Inch Nails, Devo, Weezer). A lot of it was meant to be funny for promotion's sake, but people took him up on it anyway.

4) Keep the campaign short. Kickstarter has found that the optimum campaign is 30 days, with longer campaigns performing significantly worse. The biggest periods of investment come right in the beginning and right before it closes, with everything in the middle a somewhat "dead period." If that's the case, you might as well make the campaign short since there's no advantage to dragging it out.

Kickstarter has some great additional info and data on a recent blog post that's also worth checking out.

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

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Monday, October 1, 2012

What Sony/ATV's Direct Negotiation With iTunes Means

The Beatles image from Bobby Owsinski's Music 3.0 Blog
In a move that may signal a change in the way business is done in the music industry, music publisher Sony/ATV Music will soon negotiate directly with iTunes, Amazon and every other online music distributor directly. In effect, they're cutting out the traditional performing rights organization middlemen of ASCAP, BMI and SESAC.

Sony/ATV with begin this new policy with The Beatles catalog, which obviously carries considerable leverage; so much so that The Beatles now have their distribution deal directly with iTunes that bypasses their record label EMI (let's see how long that lasts now that EMI is owned by Universal Music).

It should be noted that the direct negotiation is only for online distribution and doesn't apply to broadcast performance or physical product mechanical royalties.

By bypassing the PROs, Sony/ATV sets a precedent that the PROs should be very wary of. One of the things about online music distribution online is that the detail of information is high. You know exactly where every sale is coming from and can easily have that info at your fingertips. The PROs have a stranglehold on the analog world in that they do blanket deals directly with the broadcasters then pay out to publishers and songwriters by their own complex formulas, since the royalty data is a lot more nebulous.

While it seems a bit far-fetched that any publisher would even dream of cutting a PRO out of the picture, you have to believe that at some point the airplay info will become granular enough that they may begin to wonder why they need a PRO in the middle of everything.

Then again, The Beatles are such a unique case that they still warrant special handling. Regardless, keep an eye on this since it may be a harbinger of things to come down the road.

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

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Sunday, September 30, 2012

The Label Implications Of Neil Young's New Pono Music Service

As you may or may not know, Neil Young gave a brief peak at his new Pono high-resolution music service last week on the Letterman Show (see below). Young, who has railed against the quality of MP3s for years, wants to bring audiophile quality to consumers in what Neil is calling SQS, or Studio Quality Sound.

Pono is basically a cloud music service is combined with a new music player that seems to have the simplicity of an iPod, but with higher audio circuit quality. The recordings reportedly have all been transferred to 192kHz/24 bit, which while not as good as analog, does sound really good (CD resolution is 44.1kHz/16 bit).

Supposedly the Universal Music, Sony Music and Warner Brothers are totally on board for launch next year, and why wouldn't they be? There are so many up sides and not many downsides for them.

First, Neil has a lot of credibility within the industry and press as being a maverick who does things his own way. He's not beholden to anyone, could care less about being commercial, and has a high profile when he chooses to use it. That's a win.

Second, this is finally a way for labels to do something they've been wanting to do for a long time - sell you the music you already own yet one more time. If it really does sound that much better (it should, but there are caveats), there is a group of people that will buy yet another version of the records that they may have purchased several times already. That's a win for them.

And finally, there's been word that Warners even invested in the project with Young (and licensed 8,000 albums to Pono as well), which might not be such a great thing. The tech world is littered with projects that a major label has invested in to protect its interests, only to have it eventually fold because the project was better for the label than for its customers. That said, Young is ferocious in his independence, so maybe Pono might turn out to be something truly groundbreaking.

High-quality audio. Imagine that. For more on the tech side of Pono, see my post at The Big Picture Music Production Blog.


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

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

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