5 Reasons For A Revolutionary Year In The Music Biz

There was an interesting article at Billboard.biz yesterday entitled, "5 Reasons Why 2010 Will Be Revolutionary For The Music Biz." The article made a few good points, but I'm not so sure if I agree with every premise. Here are the 5 reasons outlined in the article, along with my thoughts on each.

1) The Ticket Master/Live Nation merger. The article states that the merger will enable the new company to sell entertainment packages in such novel ways that it will impact ticket sales for the better. I think that what's really going to change the concert business is the backlash from consumers on a variety of issues, including sky high prices, premium seats only available through ticket brokers, and too many unnecessary ancillary fees. The revolution is indeed coming, but it's the consumer who will be doing the impacting, not TM/LN.

2) The Performance Rights Act changes radio. The Performance Rights Act enables artists other than songwriters to get paid for airplay. The way it is now, only the writers of "You've Lost That Lovin' Feeling" get paid for every one of it's more than 7 million plays while the Righteous Brothers never made a penny. The Performance Rights Act makes sure they're finally given a tiny sliver of compensation for singing the song. The NAB has been painting the act with gloom and doom, stating that radio stations will be going bankrupt everywhere, or turning to talk radio. it might actually be a good thing if they go bankrupt and let someone else take over, but that will never happen. Instead of "big radio" making a big profit every year, they'll make a slightly less big profit and move on.

3) Internet Service Providers become partners. The article states that this is the year when ISPs start enforcing pirating laws and collecting fees for the record labels. Yeah, dream on. The ISP's will merely respond, "Hey, we're just the pipe. You guys are the water flowing through it. Regulation is up to you the way it's always been!" Having the ISPs do the labels dirty work and collecting money for them is just a label fantasy.

4) Spotify will raise the bar for mobil music. If you don't already know, Spotify is a subscription music service that's been pretty successful in parts of Europe, but has yet to debut here in the US because of licensing issues with a few of the major labels. The service is supposed to get going here in 2010, but reports are that it's severely hampered by cash flow and may never have the bucks to be able to put if over the top. My bet is that Apple begins it's iTunes subscription service in 2011, at which time music subscription will take off.

5) Almost any way you slice it, EMI will reshape the industry. EMI used to be a major label but it's recently become a non-entity in the major label world. Cash-strapped, short on management, no respect, and few hits, the only thing it has going for it is a huge catalog. The article thinks that EMI will get turned around and become a major again (of course it would say that, Billboard would love to get some EMI ad dollars). The bet here is that those days are over and if it's lucky, EMI will be relegated to being a catalog manager if it stays alive at all.

Read the entire article at Billboard.biz, then tell me who you agree with.

Guidelines For Direct Marketing To Your Audience

It's easy to think that since you have this great mailing list or gigantic list of friends that you have the perfect way to sell your products to them. That's true, but in Music 3.0, direct marketing to your audience must be approached with caution. Your fans want to hear from you, but they want to be informed, not hyped.

Chances are your fans want everything you have to offer, but they don’t want the feeling that they're being "sold". Make an announcement about a new release or a piece of swag, but don’t oversell it. Fans don’t need to know that you think your new music is the greatest thing you ever did and it’s better than the Foo Fighters last release. They’ll decide for themselves and then sell it for you in their own conversations if they like it.

The way to market to your tribe is by simply presenting your product to them. Just make them aware that it’s available, and they’ll do the rest. You can take it a bit further by offering them information about the product - the more exclusive, the better.

Instead of a sales pitch:

• Give them a behind the scenes story about the making of the product.

• Tell them where the idea for it came.

• Tell them about all the people involved, especially other tribe members.

• Provide interviews with others involved in the project.

• Give them all the trivia involved in the project, no matter how small. True fans will eat it up. If it’s a new song, tell them where it was recorded, who the engineer and producer were, how many tracks were needed, how long the mix took, how many mixes you did, how the final mix compared to the rough mix, and all of the hundred other fine details that go into producing a song. If you just produced a new T-shirt, describe where the design came from, why you chose the manufacturer, what the shirt is made of, why you chose the color, etc. Get the idea?

Giving them insight that no ones else has makes them feel special, will keep them loyal, and will show casual fans and lurkers the benefits of their participation with you.

Consumer Electronics And Social Media

Just came back from the Consumer Electronics Show in Las Vegas (for a full report, see my Big Picture blog) and saw a number of significant trends that were surprising for social media and how it relates to musicians.

First of all, more and more television models are now social media aware, with direct connections online to a variety of video hosting sites. This integration bodes well for social media in general as it's not a large jump to be connected to Facebook, MySpace, Twitter or any other networking site. Imagine being able to discuss a television show or video on a split screen of a 55 inch monitor with your online friends while you're watching it. That's the future and it's almost here.

Imagine speaking with friends via Skype over your television. Imagine watching the same show from different locations while seeing each other as if you're in the same room. That's here now, as a number of manufacturers showed models with built-in Skype capabilities.

And while 3D doesn't have anything to do with social media directly, it was the theme of the show. So what, you say? The do-it-yourself nature of Music 3.0 means that anything is possible from creation to distribution and marketing, but 3D was a technology beyond the do-it-yourselfer - until  now. Panasonic showed a prototype of a 3D camcorder that will be within reach of the masses at $21,000. Still expensive, I know, but within reach price-wise and bound to decrease in cost as the technology evolves. Sooner than you think, you may be able to have your own music video version of Avatar ready for distribution via YouTube. And social media will move from the computer to the living room.

My So-Called Digital Life

My personal laptop blew it's logic board on Friday, disrupting my digital life pretty well. While I didn't lose too much data, there are some emails that look like they've gone away.

If you've sent me an email in the last 3 days and have not heard back from me yet, please send it again.

2009 Music Sales At An All-Time High

Yes, you read the title correctly. 2009 US music sales hit an all time high according to Nielsen SoundScan, with total sales of over 1.5 billion, up 2.1% over 2008.

Despite reports of the album's demise, the format sold 373.9 million (which is still a very substantial figure), but individual digital track sales are even better with more than 1.1 billion in 2009, up 8.3% from 2008 .

Nielsen also reports that 89 digital songs exceeded the 1 million sales mark in 2009, compared with 71 songs in 2008. Not only that, 2009 marked the first time a song broke the 4 million sales mark in a single year, which happened by not one, but four singles -- "Boom Boom Pow" and "I Got a Feeling" from the Black Eyed Peas, Lady Gaga's "Poker Face" and Flo Rida's "Right Round."

Sounds pretty good doesn't it? But the devil is in the details. Of course the number of sales were up, but that doesn't mean revenue was as well, and industry growth is definitely slowing. Album sales dropped another 12.7% from the previous year, which is not a figure that the industry wants to hear, but digital music is still on the rise as it accounted for 40% of all music purchases in 2009, up from 32% in 2008. That being said, digital album sales made up 20% of total album sales in 2009.

Who was the biggest seller of 2009? Michael Jackson, who racked up a total of 8.2 million album sales, which was significantly more than Taylor Swift's 4.6 million. After Jackson and Swift, The Beatles moved more than 3.28 million total units, followed by newcomer Susan Boyle (3.1 million), Lady Gaga (2.8 million), Andrea Bocelli (2.6 million), Michael Buble (2.28 million), Eminem (2.1 million), Carrie Underwood (1.8 million) and the Black Eyed Peas (1.88 million).

Lady Gaga was the year's top-selling digital artist, selling more than 15 million tracks and her album "The Fame" being the top-selling digital album of the year with 461,000 downloads.

What can we take from these figures? Music is still extremely popular and although it's a business in decline, it's still enormous. Of course it's changing, but it's not going away any time soon.

5 Superb Social Media Tools For Musicians

Zach Pentel recently created an interesting post over at Mashable called "5 Superb Social Media Tools For Musicians."

You can read the post for more details, but here's what he suggested:

1) Improve your Facebook Page with ReverbNation’s MyBand. MyBand allows your page to be more unique than the standard Facebook fan page.

2) Share Songs on Twitter with Twiturm. Twiturm lets artists and band share their songs right on Twitter without sending someone off to another site like MySpace.

3) Reward Increased Engagement with FanBridge. FanBridge does one of the things that I've been advocating in my Music 3.0 book, allows you to engage your fans from a single place. Makes your online life easy.

4) Build and Share a Digital Album Package with BandCamp. BandCamp is a publishing platform that goes beyond streaming and allows you to create a self-contained package.

5) Measure It All with Band Metrics. You don't know how well your doing until you can measure and Band Metrics is a measurement tool designed especially for artists and bands.

Check out Zach's post and check out Mashable, which is a great aggregator of all things social.

Hugh MacLeod's "Ignore Everybody"

A few weeks ago I received an email from industry provocateur Derek Sivers with an unusual offer. He would send me a book from either Seth Godin or Hugh MacLeod (Derek loves books on marketing), and if I received any benefit I would write something about it. I'm a big fan of Seth Godin and if you've read my Music 3.0 book, you know that Seth's ideas play a big part of it. But I've never read Hugh MacLeod, until the book from Derek arrived in the mail the other day.

Hugh's book "Ignore Everybody - And 39 Other Keys To Creativity" is a very quick and enjoyable read, and as Derek predicted, really spoke to me.

I think the over-riding theme of the book is, "If you have an idea that you really believe in, don't ask anyone for advice or their thoughts, just go for it." It's too easy to get discouraged by even your friends and family, because they have a vested interest in keeping their relationship with you just as it is. You've got to understand that if you put your time in, you have a chance at success, but those relationships inevitably will change.

I've seen it happen myself several times over the years. When I first got a gig with a successful touring band, I had a friend tell me how much I'd changed. I didn't think my attitude towards him or anyone else was any different, but it was true, my life had changed but not in the way he thought. I was really tired from all the traveling, and under a lot of pressure from recording and not feeling very good about my parts. How can anyone else who hadn't been through the same thing appreciate that? I was a bit aloof because I was feeling depressed about how things were going, but that was interpreted as something else completely.

Then when I started to get a little success working with major and minor music celebrities, I had friends that no longer called me because they thought I was too busy and they didn't want to disturb me. Busy yes, but disturb me - of course not! This still goes on to this day.

This is not an uncommon occurrence unfortunately, and people with far more success than I've had have been going through these things for ages. I think that what surprises you when it happens is the fact that you're not ready for it. Hugh's book points out that you should expect a relationship to change the moment you have an idea that you intend to act on, because your friends like the status quo better than what might happen if you succeed.

Hugh's next point that got to me was "Don't quit your day job" If you're a musician, or anyone in the arts for that matter, you've heard this one forever, but Hugh has slightly different take on it.

Yes, keeping a "day job" doing something other than the thing you love may not be what you want, but that happens even when you have some success and the thing you love to do really does become your day job. Every artist is forced to choose between what's in their heart, and what they have to do to earn a living. Actors take a Hollywood blockbuster with a feeble story so they can still act in independent art films. Painters take commissions from wealthy patrons so that they can spend time on that inspiration that will never go anywhere. Musician's take a high paying gig they hate so they can spend a few weeks working on their own music. This illustrates a point that I'm fond of saying, "Art is something you do for yourself. A craft is something you do for someone else." Hugh just said it another way.

There are at least 5 additional points made in "Ignore Everybody" that I really liked, but I'll leave them for another post. If you're a creative person in just about any artistic or technological discipline, Hugh MacLeod's "Ignore Everybody" is a book that you should check out.

10 Creative Rules Of Thumb

Here are some great tips on how to stay creative from the Marketing Essentials International blog. It's a good positive way to start the new year, although it seems that everyone is already pretty positive (maybe hopeful is a better word). Even though I found this on the MEI blog, I seem to remember seeing them on Seth Godin's or Derek Sivers' as well. Regardless of who created the list, it's still pretty good advice.

Top 10 Creative Rules of Thumb:

1. The best way to get great ideas is to get lots of ideas and throw the bad ones away.

2. Create ideas that are 15 minutes ahead of their time…not light years ahead.

3. Always look for a second right answer.

4. If at first you don’t succeed, take a break.

5. Write down your ideas before you forget them.

6. If everyone says you are wrong, you’re one step ahead. If everyone laughs at you, you’re two steps ahead.

7. The answer to your problem “pre-exists.” You need to ask the right question to reveal the answer.

8. When you ask a dumb question, you get a smart answer.

9. Never solve a problem from its original perspective.

10. Visualize your problem as solved before solving it.

7 Music Business Predictions For 2010

Yesterday I posted a number of predictions for the musical instrument and pro audio industry on my Big Picture blog, so today I wanted to post a few pertaining to the music business. As with my other predictions, they're based on a bit of inside knowledge, a few rumors, and my ability to read the tea bags.

1) Subscription music gains a bit more traction. Subscription service Spotify debuts but they'll be crippled due to oppressive licensing deals with the major labels and a cash flow problem. However, music lovers get more and more used to subscription - and they like it. 2010 is not the year subscription reaches critical mass though, because........................

2) Apple waits it out. Apple now has the infrastructure to launch a subscription service since they bought LaLa, and they're just the 800 pound gorilla to push it over the top. Not in 2010 though, as they squeeze one more year of downloads out of the iTunes store. 2011 will be a different story altogether.

3) Social media management becomes an issue. No artist has enough time in the day to adequately manage his social media strategy. Hell, most of them don't even have a social media strategy at all! But the demands of social media finally outweigh the demands of making music, and the artists rebel. As a result......

4) A new class of social media company arises. In 2010, you'll see companies that are dedicated to managing all the social media of an artist so the artist can get back to making music. Sure, there are a few companies like that now, but most of them tend to specialize in PR, or site, MySpace and Facebook design. This new class of company will concern itself only with social media management, and will remove the burden from the artist for better or worse.

5) Record labels get smarter. Let's face it, we like to paint these guys as stupid and out of touch. Sure, many of them are, but there are a lot of bright, passionate people still in the music business and they're learning fast what it takes to give the public and the artist what they need. Look for some surprisingly hip initiatives from labels big and small in 2010 (and a bunch of incredibly stupid ones too.)

6) Concert ticket prices come back to earth. You can only soak the people so many times even in good times, but when times are tough the pocketbooks close quickly. Major artists begin to realize that fans just don't want to see them every year, especially when they could be paying the rent or the mortgage or putting food on the table with the money instead. In 2010, the whole concert industry begins to wise-up and understand that the only way it can survive is by offering tickets at Chevy prices instead of a Ferrari.

7) Twitter takes a fade. It's happening already - there's more and more spam on Twitter and it's been hacked too. And more goofy, inane posts by people that should know better. Why would you think in your wildest dreams I'd be interested in the fact that you just bought a muffin at Starbucks? In 2010, the pushback begins.

Let's see how these work out. Happy New Years and thanks for reading everyone!!

11 Interesting Moments For The Music Industry In 2009

2009 was filled with numerous interesting moments for the music industry as Music 3.0 kicked into high gear. Here are some significant events from last year, in no particular order:

1) Social Media - 2009 became the year that everyone in the music business - from label execs to artists - realized the true value of social media and began to work it hard.

2) Twitter - This was the year that Twitter became a real force in the artist's social networking toolbox as artists large and small in stature reached out to their audiences. While acts like Coldplay and Pearl Jam kept it business-like, artists like John Mayer stayed personal enough to the point where you felt like you knew him. And Justin Bieber even caused a riot by an errant Tweet from his label.

3) Concert Attendance Takes A Hit - Long thought to be immune from financial downturns, attendance dropped everywhere in the concert business as even major artists played to less than sold-out audiences. Concert promoter LiveNation even offered "No Service Charge Wednesdays" and tickets for as low as $5 to get meat in the seats.

4) Virgin Music Closes - Even though they were still profitable, music retailer Virgin Music closed it's last 6 stores, discovering that the real estate was more valuable than the merchandise inside.

5) iTunes Variable Pricing - Apple acquiesces to the major labels and institutes 3 tiered pricing. Industry pundits battle, profit increases but sales drop. Who wins?

6) Box Sets Get Innovative - Major artists take Trent Reznor's lead and release box sets, with one more elaborate than the next. AC/DC even packages their merch inside a working amplifier (see side graphic).

7) Subscription Nears The Turning Point - With the subscription service Spotify gearing up to launch in the US in 2010, the industry gets the feeling that the public is finally ready to embrace subscription music. Is the feeling unfounded? We'll know shortly.

8) Apple Buys LaLa - In what may be a precursor to an iTunes subscription service, Apple purchases the hybrid service LaLa.

9) Music Games Slump - After dominating the game scene and becoming an unexpected income source to labels and artists alike, the music game business took a sales hit as new versions of Rock Band (even by The Beatles) and Guitar Hero struggled.

10) Secondary Ticketing Exposed - The long time practice of reselling held-back concert tickets through scalpers finally came to light, with major artists like Bruce Springsteen and Bon Jovi (among others) taking big hits to their reputations. No wonder you can only get the best seats from scalpers.

11) CD Sales Come Back A Little - In December, CD sales come back like it's 2005 as multiple artists sell in the 100,000's per week. Susan Boyle comes out of nowhere to sell nearly 3 million in a month, closely followed by Andrea Bocelli.

It was an interesting year. Let's hope 2010 is just as interesting.

The Shift From Music 2.0 To Music 3.0 In The 2000's

The music industry changed in oh so many ways in the 2000's. What started as a decade of business more or less as usual has terminated in a business in upheaval. Somewhere in the middle is where the industry transitioned from Music 2.0 to Music 2.5, then finally to Music 3.0.

In case you've forgotten how I've broken down the era's of the music business, here they are:

Music 1.0 - the first generation of the music business where the product was vinyl records, the artist has no contact directly with the record buyer, radio was the primary source of promotion, the record labels were run by record people, and records were bought from retail stores.

Music 1.5 - the second generation of the music business where the product was primarily CDs, labels were owned and run by large conglomerates, MTV caused the labels to shift from artist development to image development, radio was still the major source of promotion, and CDs were purchased from retail stores.

Music 2.0 - the third generation of the music business that signaled the beginning of digital music, piracy ran rampant due to P2P networks but the industry took little notice as CD sales were still strong from radio promotion.

Music 2.5 - the fourth generation of the music business where digital music became monetized thanks to iTunes and later, others like Amazon MP3. CD sales dive, the music industry contracts and retail stores close.

Music 3.0 - the current generation of the music business where the artist can now communicate, interact, market and sell directly to the fan. Record labels, radio and television become mostly irrelevant and single songs are purchased instead of albums.

As we entered Y2K (don't hear that term much any more) the music biz was sure that it could handle the onslaught of digital music in the form of MP3's. It was convinced that it could combat the piracy, CD sales, while not at all time highs, still remained strong, and radio and television were as important as ever for promotion. We were in the heart of Music 2.0.

2001 saw the first of many daggers to the heart of the music business, this one from an unlikely source - the computer industry - as Apple introduced iTunes. Little did the major labels know what was in store for them as they all made deals with Apple, which then released the iTunes Store in 2003. That was the year the music biz transitioned to Music 2.5 as digital music became monetized for the first time.

Although MySpace and Facebook were created later in 2003, it wasn't until later in the decade that they would become the key to the transition to Music 3.0. By 2007, artists everywhere discovered that they could reach out directly to their fans and their fans could reach back, which was the beginning of Music 3.0 and where we stand now.

Today's artists have so many possibilities that they've never had before, from producing their own music, to finding and developing an audience, to marketing and selling directly to that audience, to listening and communicating with their fans - all with ease and little expense. That's what Music 3.0 has to offer. But it sounds easier than it is, since all these possibilities still require good old fashioned work.

Top 10 Pop Christmas Songs

This has nothing to do with Music 3.0, but it is a great way to celebrate the Holiday.

Merry Christmas everyone, and thanks for reading!