2010 Music Sales Down

This isn't any great revelation, but music sales were down again in 2010. According to Nielsen SoundScan, album sales were down 13%, although that still amounts to 376 million units (which is still a whole lot). Of those, a full 33% were sold by big box stores like Wal Mart and Target. Only 8% were sold by indie record stores.

The most ominous sign however, is that total music sales fell by 2.5% from 2009. Even digital sales were somewhat stagnant as they inched up by only 1% over the previous year (which amounted to 1.17 billion downloads). As a comparison, 2009 was up 8% over 2008, and 2008 was up a whopping 27% over 2007.

So why has digital music's growth slowed? It's entirely possible that it's because the increasing use of free streaming sources like YouTube and Pandora to listen to music. If that's the case, it sets the stage for the age of subscription music, as consumers become more comfortable with streaming instead of owning. The music industry has hungered for subscription music, and this may be the year that it finally becomes more widely adopted.

That being said, a big part of subscription appears to depend upon whether the European Spotify service launches in the States. Spotify is still having a problem obtaining licensing agreements from the major labels, and some doubt if that will ever happen, and that prevents it appearing in the US. Of course, the moment iTunes offers subscription (and there's no indication this is imminent), so goes the music world.

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The YouTube Trends Dashboard

YouTube has come up with a new analysis tool call the Trends Dashboard that lets you see exactly what people are viewing and sharing in multiple ways. The Dashboard also gives you a picture of some of the gender and age demographics of the views. Here's what it shows:

  * Select by gender
  * Views or Sharing
  * Select by age group
  * Select by city, country, or globally
  * Comparison of any of the above

The trend information only portrays viewer habits over the last 24 hours, and videos uploaded over the last 28 days.

The Trends Dashboard can be a great informational tool if approached from the right perspective. If you want to learn what's working in a particular area, you can dial it up to take a look. Even better is that you can then analyze the top 10 videos to gain an overview of the production techniques that worked in those particular cases.

Because the timeline is only over the last 24 hours, it's best if you watch the trends for a while (I'd say at least a week) just to be sure that you're not getting a false impression. And keep in mind that many videos are viral because of their cuteness (cats and babies), weirdness, or just plain outrageousness, which is difficult to duplicate. That being said, it's a pretty cool tool.

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The Latest Giveaway - The Music Producer's Handbook

I'm giving away copies of The Music Producer's Handbook to two lucky winners.

The winners will be chosen by a random number generator on January 12th and will announced on this blog and via Twitter.

Here's the entry info for the giveaway.

You Can Be Sued For Your Tweets

Tweeting is great for a lot of things, but you still have to be conscious of what you're writing. Tweet the wrong thing that someone feels damaging to them, and you can now expect to be sued. According to the Hollywood Reporter, in what looks to be a precedent setting case, Courtney Love is being sued for libel for some of her tweets. It took a while to catch up to her (the case starts on January 18th), but here's what happened.

On March 17, 2009, Ms. Love reportedly unleashed a stream of libelous insults via Twitter at fashion designer Dawn Simorangkir, who was demanding that Courtney pay her for some cloths she designed for her. Over a 4 day period, Love tweeted that Ms. Simorangkir was, among other things, a drug-pushing prostitute, and accused her of stealing. Here's an example:

"She has received a VAST amount of money from me over 40,000 dollars and I do not make people famous and get raped TOO!"

To make matters worse, the Hole frontwomen took the fight to other social media platforms as well, continuing the tirade on MySpace and Etsy.com. As a result, Simorangkir eventually sued for defamation.

There's never been a case like this before, but we all knew it was only a matter of time. No matter what kind of media, as soon as someone feels that you've unleashed an untrue statement about them, the attorney's fee meter starts to ring.

This may have been the first time court action has been taken because of a tweet, but you can be sure that it won't be the last. Be careful what you tweet out there. It can come back to haunt you.

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5 Viral Video Rules

I read an interesting article today called "How To Break All The Rules Of Viral Video - And Still Go Viral." The premise of the article is that what really makes something go viral is to break the rules. But you can't break the rules until you know what they are, so here's what the article spelled out.

• Rule #1 - Keep It Short. It seems pretty obvious, but videos have a much better chance of going viral if they're short, mostly because that's what our attention span demands these days.

• Rule #2 - Speak Clearly. Once again, it's pretty obvious. If you have any narration, you increase your chances of virility if your viewers can understand it.

• Rule #3 - Avoid Copyrighted Material. Copyrighted material can make a video stop in its tracks just as it gets some viral momentum due to a take-down notice from the content owners attorneys. You might get away with it; then again, you might not.

• Rule #4 - Reinvent Yourself. According to the article, try a different approach for each video. I'm not so sure I agree with this. If you have a style that works, you might be better off to brand yourself with that style.

• Rule #5 - Be Timely. You have a greater chance to go viral if your content is about something currently popular, although there are perennials like cats and babies that never seem to go out of style.

Ok, these are the rules. Now shoot a video that's nothing like them (except for #3, keep doing that) and you'll have a good chance to go viral.

Check out this link for the entire post.

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5 New Anti-Piracy Strategies

Depending upon who you ask, pirate sites like Bit Torrent can either help or hurt your career and your music sales. There are those that feel that being pirated makes you legitimate, and even increases your sales by the fact that new fans will want to support the artist after discovery.

That idea isn't shared by any copyright manager (at least not publicly), as they only look at the bottom line of sales, royalties and commissions being hurt as a result of every pirated file.

But actually stopping the pirates is a lot tougher than it sounds. Usually a copyright holder/manager will send a take-down notice, which sometimes gets results. The RIAA (the music industry trade association) actively sued the very people that did the downloading, which wasn't very productive in the end. And some copyright managers simply made a deal with the pirates when possible, figuring that at least a little money was better than none at all.

But 2011 might be different as 5 new strategies will be tried to combat file sharing sites, according to an article in Torrent Freak.

1) Cease the Domain. This hasn't happened until now but everyone, copyright holders and pirates, feel that it's inevitable and 2011 is the year it begins.

2) Added Pressure On Webhosts. Companies that host file sharing websites have already been leaned on heavily by the Dutch government with some success. Expect other countries to follow their lead.

3) Force ISPs To Block Sites. This has been tried with limited success in Denmark, Italy, the Netherlands and Ireland, but usually ends up being a temporary impediment as the blocks eventually are circumvented. The idea is that someone trying to access a pirate site will give up after a few tries if it's blocked and then will never come back.

4) Cutting Off The Money. By cutting off any donations or payment processing, you hit the pirates where it hurts the most. Expect the use of blocked financial resources to increase.

5) Pressure On Advertisers. This can be used in conjunction with #4. It's easy for an advertiser to get spooked and pull out when threatened by anything except more views.

The US government in conjunction with the various trade associations and large copyright managers appear to be finally getting the tools needed to really put a hurt on pirate sites. Now we'll find out for sure if pirating actually helps or hinders sales and career visibility. 

See the entire article on Torrent Freak.

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65% Pay For Digital Content Online

Happy New Year everyone. Let's hope that your 2011 will be better that 2010.

While it seems to be the popular perception that people are unwilling to pay for digital content, a recent study by the Pew Internet organization seems to contradict the notion. In fact, they found that 65% of people online have paid for some form of digital content or subscription.

The study discovered the following:

• 33% of internet users have paid for digital music online
• 33% have paid for software
• 21% have paid for apps for their cell phones or tablet computers
• 19% have paid for digital games
• 18% have paid for digital newspaper, magazine, or journal articles or reports
• 16% have paid for videos, movies, or TV shows
• 15% have paid for ringtones
• 12% have paid for digital photos
• 11% have paid for members-only premium content from a website that has other free material on it
• 10% have paid for e-books
• 7% have paid for podcasts
• 5% have paid for tools or materials to use in video or computer games
• 5% have paid for “cheats or codes” to help them in video games
• 5% have paid to access particular websites such as online dating sites or services
• 2% have paid for adult content

What's more, they found that those who purchased digital media paid between $1 and $10 per month, with some purchasing as high as $30 per month. The digital content that most people were willing to purchase online were (in order):

• Music
• Software
• Mobile apps
• Games

So while we may have a generation of internet users who expect content like music for free, there are still a lot more out there willing to pay for it. As with everything though, the content has to be really good and at the right price to be attractive.

Read an overview of the Pew research article here.

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Concert Revenue Isn't What It Used To Be

It used to be that a star or superstar act going out on tour was really going to cash in, but it looks like the good times are over, according to Pollstar magazine, considered by many to be almost the bible when it comes to ticket sales.

How about these for numbers?

  *  The revenue of the 50 biggest grossing tours in the world declined 12% last year from 2009.

  *  It was even worse in North America, as sales were down 15%.

  *  The number of tickets sold declined 7% world-wide and 12% in North America.

  *  Yet ticket prices increased by 4% despite last minute discounting by giant concert promoter Live Nation.

  *  The top 50 acts played 8% fewer shows than the year before.

  * Promoters slashed prices to as low as $10 for the Jonas Brothers, Maroon 5, Stevie Winwood and Santana, Creed, and the American Idol tours, among many others.

So who were the biggest grossing tours?

1) Bon Jovi - $201 million (U2 made $311 mil the year before)

2) AC/DC - $177 mil

3) U2

4) Lady Gaga

5) Metallica

What does this all mean? This was probably a healthy course-correction in the business. As a result, what we'll see next year is more reasonable pricing, fewer tours by acts who were out last year (you can't tour the same places with the same songs every year and expect big sales), and maybe some sanity returning to a business that never had to worry about a recession before.

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

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The CD As Lunchmeat

I was turned onto this Gizmodo post by reader Scott Culley. It's entitled "I'm Not Buying Any More CDs That Don't Look Like Lunchmeat" and illustrates the interesting graphic design of a CD by Lithuanian musician Shidlas that not only looks like Saliami, but packaged like it as well.

The album is appropriately entitled "Saliami Post Modern" and features the kind of out-of-the-box marketing that can make the difference between being recognized and making money, or being lost in the crowd.

Standing out from the crowd is essential in Music 3.0. Now that almost anyone can record, there's more product than ever available. Unfortunately, most of it is crap, but there's not many ways to separate the really great music from the rest, which makes it pretty difficult to rise above the mediocre.

I don't know if "Saliami Post Modern" is any good or not, but the packaging makes me want to check it out. Sort of reminds you of the days of the album, doesn't it (read my "6 Reasons Why The Album Died" post for more info on this)?

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Ask For The Sale

There was an article on Hypebot a few weeks ago by Peter Tanham of Amp Music Marketing regarding "call to action" buy buttons. Amp Music Marketing decided to test a number of buttons to see which was most effective when it came to selling music. The choices were:

"Get The Music"
"Download The Music"
"Buy The Music"

It turns out that the most effective was the most direct "Buy The Music (album, CD, etc)" while "Get The Music" was the least. It seems that consumers relate "Get The Music" to a bait and switch in which they're lured into clicking only to find that there's something additionally asked of them.

When it comes to sales, sometimes the very best technique is the most direct. Ask plainly for the sale. If your fan or customer really wants to buy from you, you're doing them a favor by making the process streamlined and easy. If your fan or customer is unsure, you're not helping the cause by being ambiguous.

And another thing. Keep the choices to a maximum of 3 (two works best). If given too large a variety of choices, the customer is likely to throw his hands up in the air in frustration and not buy anything!

Read the entire article here.

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

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The Concept Of "Fuelers"

I read an interesting article by Jed Cohen on the Rockethub blog a while back about Fuelers, a concept that I wasn't familiar with but is worth knowing about, especially if you're interesting in crowdfunding. In case you weren't aware, Rockethub is a leading crowdfunding site, and just like CD Baby, they have a separate site that teaches you how to take advantage of their site.

In Rockethub parlance, Fuelers are contributors to your crowdfunding project. That being said, Jed has broken down Fuelers into three categories.
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The vast majority of your Fuelers will be people you already know. They are your friends, family and fans. These are people who already know and trust you. For most projects, the number of strangers who become Fuelers is fairly low. That being said, all Fuelers will fall into one of the following three categories:
1. The Committed - already committed to supporting you when they arrive
2. The Inspired - become inspired to support you after they arrive
3. The Shoppers - will shop (and tangentially support you)

Category #1, the Committed, will be populated with your First Degree Network of friends and family. These are folks who will support you every time, regardless of the project, or it’s quality. Your parents are likely a good example.

Category #2, the Inspired, will be populated with other friends and family members, your Second Degree Network. These are people whom you invite to the project page. They are not committed to contributing when they arrive, but after watching your video or reading your project description, they decide that you are up to something great! They become inspired to support you. Some strangers may fall into this category, but a friend you see occasionally is likely a better example.

Category #3, the Shoppers, will be populated with everyone else (ie. your Third Degree Network. In order for your project to grab friends-of-friends and strangers, you’ll need to grab the shoppers as well. The best way to do this is by creating rewards that are interesting and/or a good value.
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If you think about it, the Fueler concept also applies an artist or band's audience.

The Committed are your "tribe" (as best selling marketer Seth Godin calls them). These are your most passionate fans that will go to any lengths to attend a show or buy a product.

The Inspired are your "casual" audience; the ones that like you, but don't love you. It may only take a single great song to push the casual fan into the committed category.

The Shoppers are the part of the audience that really likes your genre or even sub-genre of music, but either hasn't been properly exposed to you or just hasn't caught the fever yet.

Your first job as an artist is to take care of your most passionate members (the Committed or your tribe) first, since they frequently bring the Inspired or casual fan into the tribe just with their enthusiasm.

Spending too much time on the Shoppers of the audience can take too much attentional away from the fans that really matter, and you may never win them over anyway. In short, take care of the fans that are already in your corner first. If treated well, they may be your fans forever.

Read Jed's entire post here.

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It Pays To Know Your Bandmates

It's tough to be in a band. Forget about the music part (which should be mostly fun), the personalities and politics are enough to make anyone crazy, as it always is when art and egos are involved. But just get close to a record deal and everything magnifies. When people begin to think they can be a star except for someone in the band (or even the entire band) that's holding them back, you get some real trouble that can't be overcome easily without serious disruption in the band itself. Then, when the prospect of big money is involved, and you have management that's looking more at the bottom line than at the music, you get a recipe for what's seeming is happening currently with the Atlantic Records band Paramore.

Brothers Josh and Zac Farro recently left the band and posted an interesting blow-by-blow on their blog that's worth a read.

In a nutshell (according to the blog post), the band started as friends in school, found a lead singer who eventually takes over the band direction, the lead singer signed the record deal without the rest of the band, the label and management wanted to fire the band, and it goes on. You've all probably heard this before.

Now there are two sides to every story, and in the case of a band, there's usually a different story for every bandmate. The sad part is that there are a thousand stories just like this, and it will keep on happening unless everyone in a band does at least some of the following (in no particular order):

1) Don't sign anything unless you have a qualified music attorney look it over first.

2) Make sure that any manager that's hired is the manager for the entire band, not for one person. If that happens, you're just a hired gun. If that's the case, at least get paid like a hired gun should be paid!

3) Don't let one person sign a record deal. If that happens, once again, you're a hired gun.

4) Make sure that you have an agreement between band members regarding at least the following:
  *  Who pays the bills
  *  What kind of vote is needed to incur expenses?
  *  How will the profits be divided?
  *  What happens if a member leaves?
  *  How are the band assets divided if a member gets fired or leaves?
  *  What kind of a vote is needed to fire a member?
  *  What happens if a member becomes incapacitated or dies?
  *  Who owns the name?
  *  Do you need a majority or does it need to be unanimous to make a decision?
  *  Who owns the bands assets?
  *  Are side projects allowed?
  *  What's the term of the agreement?
  *  Who owns the name?

And this is just the tip of the agreement iceberg (consult an attorney about this too). Without a doubt, it's one of the most difficult things you'll ever have to do as a band, but if you can get through it, you'll be a lot stronger for it, and a lot clearer about what to expect when the unexpected happens.

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

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