Music Industry Looking Up A Bit

Go to any music industry conference or trade show and about all you'll hear is doom and gloom about the current state of the business. Of course, the pundits are correct in their assessment that things aren't like they once were - sales have declined about 54% since 2000. But in some areas, things are actually looking up according to the latest report by the IFPI (International Federation of Phonogram Producers), which represents the the music industry world-wide.

So what's on the rise?

1) Performance royalties on recordings were up 7.6 percent to $785 million in 2009.

2) Digital music sales have risen by 9.2 percent to $4.307 billion, which now account for 25.3 percent of all worldwide music sales.

3) The rate of decline on physical product (like the CD) has declined, slipping only 12.7 percent in 2009, which was down from the 15% drop in 2008.

4) 13 countries actually had gains in 2009, including Australia (up by 4.3%), Sweden (11.9%!!), the UK (1.9%), and South Korea (10.4%).

On a side note, the British Phonograph Industry's (BPI - the UK version of the RIAA) released their 2009 numbers as well, and while they're in the ballpark with the IFPI's figures, they are a bit different.

In the UK, digital sales are growing by a rate of 48%, the decline of the CD sales is 14%, and digital music revenues are 21% of the total sales.

The RIAA has not yet released the music sales figures for the United States, although that should be any time now.

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

The Online Habits Of Teens

The last thing you want to do if you're a songwriter or band is to try to write something specifically for a particular demographic. Unless you're true to yourself, your art will always suffer. As I've said in many of my books:

Art is something you do for yourself. A craft is something you do for everyone else.

Still, knowing more about a particular demo can at least explain why something is selling or not. That's why the new study of 1000 boys and girls age 13 to 19 by Buzz Marketing is so fascinating. The data tells you a lot about how teens think in 2010. Some interesting points:

• When a new song debuts, most kids download the song on iTunes or listen to it on MySpace or Pandora.

• 74% of teens say they don't download music illegally.

• When asked 'Would you buy an iPad?" 64% of teens said no.

• Boys prefer blogs (63%), while girls prefer magazines (55%).

• 13 year olds still hear new music first on the radio, not on the Internet or from TV videos.

• Since 2008, popularity in hip-hop and R&B music has declined, while rock is getting a boost.

• 85% of teens said they cut down spending during the recession, but clothing and dining out were among the top cuts. Buying music is 6th on the list of spending cuts.

• 55% prefer albums to singles

• Facebook is the most visited site, followed by Google, YouTube, MySpace, Twitter and Flckr. In fact, 83% prefer Facebook to MySpace.

Kinda destroys some long-held beliefs about how teens consume media, doesn't it? Go to the Business Insider site to read the entire report.

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

Natty's Fan Funding - Brilliant Or A Scam?

As if we didn't need more evidence that the era of the major record label is over, now comes this. Atlantic Records is asking the fans of trip-hop artist Natty to fund a release. The company as teamed up with the fan-funding platform Pledge Music to try to make this happen.

My first reaction to this news was, "Is Atlantic (really it's parent Warner Music Group) in that bad a shape that it can't afford to fund a record?"

My second thought was, "The audacity of the company to even think of such a thing. If they can't even provide the budget for a record, why be on the label at all? What good are they?"

But then I examined the story a bit to find that this outside funding is actually not for Natty's second Atlantic album at all. It's for a separate stripped down collection of songs. Could this be a brilliant PR move?

Here's why it just might be a lot smarter move than the music pundits think:

1) I'm posting about it now, and it's been all over the music press this week. What better way to get some publicity before the album is released?

2) The press and the buzz will be on-going as everyone keeps track of just how much is raised. It's a no-lose proposition. If he doesn't raise enough, he's in the news. If he meets his goal, he's in the news.

3) Natty will have another set of songs to release as soon as the momentum dies down of the real album. He could release the songs as a collection, or he can release them one at a time online. Either way, it doesn't impact the real album at all except call attention to it.

4) It allows Natty to make a lot of other PR moves that he couldn't other wise. All of the extras that most artists do for a fan-funded record can be employed here, all keeping his name in the news. For instance, Natty will give a private acoustic concert in your own home for £600 - £5,000, all the way up to Natty remixing your track for for £1,200.

The downside - It's been reported that Atlantic won't be sharing any profit from the record with the fans that paid for it. Now that's a scam.

The Long Tail - It Works If You Work It

When Chris Anderson's book "The Long Tail" came out in 2006, it was immediately acclaimed as a brilliant new theory of how the new digital economy worked. By 2007 economists everywhere where blasting the theory as a false bill of goods, one that really didn't approximate the new economy at all. I've posted on this previously on my Big Picture blog back in May of 2009 (before the Music 3.0 blog that you're now reading was instituted), but I think it's time to revisit the subject since I recently spotted a thread on the CD Baby forum after a podcast by Chris that was pretty dismissive of his premise.

For those of you not familiar with The Long Tail theory as it applies to music, it states that a consumer will buy a lot more songs in an artist's catalog than he will of his hits if only the catalog songs were available, the catalog being "the long tail." In other words, if you get someone to come to a site to buy your latest hit, they'll stick around and buy even more of your older releases too.

Then came a study by an unnamed music service (speculation is it was the iTunes store) in early 2009  that stated that of their 12 million songs, 9 million didn't sell a single copy in the previous year, which flies against the wind of The Long Tail theory. At this point, economists who never bought the theory in the first place danced on the Long Tail's grave.

But wait. There's more to the theory than just having the catalog available for purchase. After having studied the Long Tail theory in depth for my Music 3.0 book, I've come to the conclusion that this study and most every other doesn't take into account 2 of the theory's 3 main points. These are:

• in order for people to purchase items in the Long Tail, the items must be easy to find and easily available.

• the items in the Long Tail must be priced attractively, something that iTunes or any other digital service hasn't only recently begun to do.

So you have to have all three items for the Long Tail to work. Before the naysayers dismiss this theory, they must give all facets of it a chance work. With variable pricing now in use by most digital stores, we should soon see how price affects sales. But even with the right pricing, it's that "easy to find" part that's really at the heart of all the debate. Only time will tell how accurate the Long Tail theory really is.

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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.

3 Free Online Measurement Tools

One of the questions I received at the recent ASCAP Expo event was about the kind of online measurement tools that I used, so I thought that might make a good topic for today's post. Believe it or not, I think that some of the free ones are the best, at least for me. These are the ones that I use all the time:

1) StatCounter - This is by far my favorite measurement tool. StatCounter provides a suite of measurements far more detailed than what you get from your ISP, like not only the number of unique visitors, but the entry and exit page, where they recently came from, the keywords used used to find the site, the time on site, the number of return visits, and location information detailed enough that you can almost see into the visitors house. You just place a piece of invisible code on your website or blog and away you go. StatCounter only remembers the info for your last 500 visitors, and anything beyond that requires a monthly fee, but the free version is still great.


2) Tynt Tracer - Another tool that requires that you insert some invisible code, Tynt Tracer differs from just about anything else in that it measures how many copies of text or graphics were made from your site or blog. In other words, if someone copies a piece of text from your site and inserts it on another site or blog, Tynt Tracer knows about it, and then can track how many visits came to your site from that copied piece. What's more, you can also program it to insert a Creative Commons license warning when someone copies and pastes your content. The analytics are difficult to decipher sometimes, but it's certainly a cool and useful tool.

3) Google Analytics - There's no code involved with Google Analytics. You just register your site or blog, then leave the rest to Google. You get somewhat the same information as with StatCounter, but you also get some trending information that's very useful.

There are a ton of paid measurement tools out there, but why spend any money until you really need to? These 3 will get you started and take care of most of your measurement needs for quite a while.

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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.

My ASCAP Expo Music 3.0 Talk

I was honored to be asked to do an interview and book signing for my Music 3.0 Internet Music Guidebook on Saturday at the ASCAP Expo in Hollywood. Click on the link for a short video excerpt of my ASCAP interview. I believe the full interview will be online shortly and I'll post the link, since the questions were great and I'm sure were representative of many of the questions my readers have.

I also presented a short workshop on Friday on IK Multimedia's T-RackS 3 mastering software in the West LA Music room. There were a lot of requests for my ASCAP T-RackS Keynote presentation, so I've put it online. As with most Keynote presentations, it's a lot better if you hear the talk that goes with it, but hopefully you'll get the idea.

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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.

Will Apple Reinvent Concert Ticketing?

As if being a leader in the computer, mobil and music businesses weren't enough, Apple is working on a new technology in hopes of revolutionizing the concert ticket business.

Apple's new iTunes Concert + utilizes the iPhone for buy tickets to concerts, amusement parks, museums, baseball games, and even assist with wedding invitations.

Once at the event, the Concert + ticket will also make additional purchases for parking, swag, and refreshments with the same account possible.

The concert business is in need of an overhaul, with 3rd party ticket brokers and even the bands and promoters holding back the most prized seats that will then command several times their face value in the aftermarket. Concert goers have long been fed up with additional service charges that can add as much as 50% extra to the ticket price as well, and are eager for any system that limits these charges. With Apple's system, the ticket will be personalized to the buyer, making it difficult to transfer to another individual, which keeps secondary ticket brokers out of the market. No word yet what would happen with service charges like those charged by Ticketmaster, but it's thought that they would be limited.

Right now there's no timetable for iTunes Concert + introduction, but it can't get here soon enough. The system we have now favors everyone but the one who matters most - the fan.

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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.

Music 3.0 - The Rupert Perry Interview Excerpt

One of the most respected and beloved executives in the music industry, Rupert Perry held a variety of executive positions with EMI for 32 years, from VP of A&R at Capitol Records and president of EMI America all the way up to the worldwide position of VP, EMI Recorded Music. During his time at EMI, Rupert worked with variety of superstar artists such as The Beatles, Blur, Duran Duran, Iron Maiden, Pink Floyd, Queen, and Radiohead and is the co-author of the fine book Northern Songs: The True Story of The Beatles’ Song Publishing Empire.

Here's an excerpt from an interview I did with Rupert for my Music 3.0 Internet Music Guidebook.

What’s the future of the major labels? Do you think they’ll survive?
I think they’ll survive because they and a lot of smaller labels have catalogs of recorded music and someone always wants to consume it. But they also have to consider what kind of business they’re in now. They’re not really into artist development anymore or signing lots of new artists like they used to in the past. What they’re really involved in is the business of rights management. They’re managing the rights in the same way that publishers are managing rights. The music publishing industry and the recorded music industry, two industries that grew up side by side, are now coming together a lot faster now because it’s a business of rights.

If you’re an artist, you will decide if you can manage your rights yourself or, if you’ve become successful, need someone to manage them for you on a global basis. Then maybe you go to one of these entities. Either way, you’re going to have a much greater degree of flexibility in how you deal with those rights going forward.

What would be the best way to break an act these days?
It’s back to immediately being able to build your website first, then communicating and interacting with your fans. Even if you only have 50 email addresses when you start, if you’re any good that will increase. Create your MySpace and Facebook pages because someone will see you and want to go to your website. When they get there you want them to be one click to anywhere they need to go. If they want to buy something, it’s one click. If they want a ticket, it’s one click. If they want to read the bio or see the photos, it’s one click. But in the end, it’s your songs and your performance that’s going to drive the traffic.

What you still never get away from is that it’s still about a song and it’s still about a performance of that song. Can you play that song in front of your audience however large or small and create the "WOW Factor?“

Is a CD necessary these days?
It still may be. People tell me that they sell 50 or 100 CDs at a show. If you control your content, sell X number of CDs, X number of T-shirts and merch, and stay on the road, you can make a pretty good living. You may not be a household name but you’ll have a really strong fan base, you’ll know who they are, and you’ll be able to communicate with them. The fan/consumer is the piece of the puzzle that you really need.

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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.

The Cost Of Buying A Song

You have a lot of choices as to which online distributor to use to distribute your music, but you're going to make more money on iTunes than anywhere else simply because they charge more.

As the chart on the left shows, of the 6 most prominent music download distribution sites, it costs the consumer more to buy 10 albums from iTunes than any other site as reported by Ed Bott on ZDNet.

But despite the better deals from other distributors, iTunes still holds a commanding lead in market share, with 69%. That used to be because iTunes had the largest selection, but that's no longer true. According to eMarketer in a January report of this year, iTunes had  roughly 11 million tracks in its catalog, Amazon 10 million and Lala offered 8 million (Lala is now owned by Apple). Rhapsody, eMusic, and the Zune Marketplace each have 6 million tracks to choose from.

Even though iTunes holds the lead in market share, that doesn't mean you should discount the other distributors. It's likely that iTunes will continue to lead in the near future, but you may see the others begin to catch up as consumers become aware of their benefits. Cdbaby and Tunecore are still your best bets when planning your distribution campaigns, since it's the easiest way to reach every distributor, both online and with physical goods.

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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.

6 Tips On How To Grow Your Online Audience

Here are some great tips from Bill Flitter from a recent Mashable post about growing your online audience. Although his post wasn't entirely on that subject, I thought that the following part of the post was especially poignant.

6 tips on how to grow your online audience (my comments are in italics):

• 1) Use Hashtags: If you are posting to Twitter, add a hashtag to improve your SEO value. We've discussed this in a few recent posts. Check out this post about hashtags if you're not familiar with the concept.
• 2) Use Strong Headlines: Spend extra time writing great headlines. Pack them full of topical words that search engines will find (but don’t overdo it). But make sure that your keyword phrases are still relevant to your post, which is the hard part.
• 3) Recycle: With the amount of content flowing in the stream, something is bound to go unnoticed. Send out your most popular content again. Add a label to it, like “Most Popular Today…” It may attract someone new. It's best not to send too many posts or tweets, but this does work.
• 4) Use Paid Distribution: If your budget permits, take your most popular content and syndicate it outside your personal networks through paid promotion. We'll spend more time on this topic in an upcoming post.
• 5) Use Widgets: Widgets are an easy way to display popular content across different sites and remind your audience which social networks you participate in. We'll spend more time on this topic in an upcoming post.
• 6) Use E-mail: Don’t forget about e-mail. Some people still prefer to get messages that way. Once again, this is a topic we've discussed many times before. Email should be your #1 way of reaching out and touching your fans. Here are several posts about email to check out: 4 Reasons Why Your Email List Is Still Important, Email Service Providers And Why They're Necessary, and 5 Tips For Building Your Email List.

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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.

How Many Music Sales Equal Minimum Wage?

You probably can't read the chart on the left, but it truly is an eye opener. It was created by Stan Schroeder and posted on Mashable yesterday. The chart describes the number of sales of various music product required to make a monthly wage of $1,160, or the minimum wage that you'd likely make at Micky D's.

Let me outline what the chart says. For more detail, see it at Mashable.

To make the minimum wage for one month, or $1,160, you need to sell:

143 self pressed CD's (income $8 each)

155 CD's from cdbaby (income $7.50 each)

1,161 retail CDs with a high-end label royalty rate (income $1 each)

1,229 iTunes album downloads (income $.94 each)

1,562 MP3 downloads via cdbaby (income $.74 each)

2,044 MP3 downloads via cdbaby via iTunes (income $.57 each)

3,871 retail CDs, with a low-end label royalty rate (income $.30 each)

12,399 individual track downloads from iTunes or Amazon (income $.09 each)

849,817 plays per month on Rhapsoday (income $.0022 each)

1,546,667 plays per month on last.fm (income $.005 each)

4,549,020 plays per month on Spotify (income $.00043 each)

This makes working at McDonalds start to look like a wise career choice. Still want to try to make music for a living?

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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 Twitter Search Alternatives

Last week in a post I touched on the importance of hashtags (placing a # before a keyword) in your tweets as well as the using Twitter searches to find the proper keywords. One of the sites that I use and like, hashtags.org, has shut down (too bad), so let's look at some alternatives.

1) search.twitter.com is more of an all-purpose Twitter search site. If you're looking for any keywords related to hashtags, be sure to place one in front of your search term (like #keyword). If you select "advanced search" you can make your search even more granular.

2) Twellow is a Twitter yellow pages directory. It's interesting in that if you search for a keyword, you'll get the profiles of users with that keyword in their profile based on who has the most tweets.

3) Tweetstats and Tweetstats Trends are a good way to look at not only what your personal stats are, but also the latest trends on Twitter.

4) Trendistic is another Twitter tool that will show you the hottest trends of the day, week or month, as well as how any particular keywords are trending.

I hate to say it, but that's about it. Search.twitter.com is the closest thing to hashtags.org, but you have to remember to insert the hashtag before your keyword. Remember that a quick look at both the searches and trends before you select a keyword can make a difference in your Twitter traffic and ultimate attraction to new followers.

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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.