Ga Ga Numbers

With all the talk about DIY (do it yourself) for bands and artists, the only way that you can get really, really big numbers is with the infrastructure of a record label at your back. The LA Times printed the following numbers in an overview of Lady Ga Ga's impact on current music.

• 667,070,854: Combined hits from her videography on her official YouTube/Vevo channel for "Alejandro," "Telephone," "Bad Romance," "Beautiful, Dirty, Rich," "Poker Face," "Eh, Eh (Nothing Else I Can Say)," "Paparazzi," "Love Game" and "Just Dance."

• 3.64 million: The number of copies Lady Gaga's "The Fame" has sold in the U.S. since its release in August 2008, according to Nielsen SoundScan. (As of Aug. 1, 2010.)

• 1.3 million: The number of copies "The Fame" has sold in 2010 alone, making the 2-year-old album this year's fourth-bestselling album thus far. All sales numbers are courtesy of Nielsen SoundScan. (As of Aug. 1, 2010.)

• $24 million: Billboard's estimate of the gross for Lady Gaga’s 47 European and Pacific Rim tour dates.

• $440: The most expensive ticket package when Lady Gaga returns to Staples Center on March 28, 2011.

• $40: Cost of a Lady Gaga 2010 tour shirt.

• 179: Total number of shows Gaga will have played when the tour wraps next year (it began in 2009).

• 13: Number of Moonmen she could potentially walk away with at this year's Video Music Awards; she received the most nominations ever in a single year.

Now the only way any of this happens is with a major record label, at least at this point in time. And that's the one thing that they're very good at, capitalizing on a trend. The problem is, an artist like Ga Ga only comes around once a decade at most.

Will the major labels be capable of doing the same thing the next time around?

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A New Low For The Music Business?

Here's an idea that's either a new low for the music business, a brilliant marketing idea, or just more of the same. In fact, a new low is exactly the campaign that the UK duo Reclusive Barclay Brothers are running as they pay 100 randomly picked fans $35 each to listen to their song.

They say that their thinking is that payola has been a big piece of the music business promotion for most of the industry's history, so paying you to listen is just a modern extension of the practice.

Personally, I think it's great out-of-the-box thinking and a great promotion. They're basically getting you to sign up for their mailing list in the hopes of winning some money, you're hearing their song, they're getting some much needed publicity, and their clever video explains the whole thing. It's just a repulsive enough idea to actually work, providing that the song is good.

To me it's a good, not great song, but the production and engineering is great. Regardless, the campaign gets you there, and the song is well made enough to make you want to hear more. Check out the newlowformusic.com site and listen for yourself, and maybe win $35.

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How To Know When You Need A Label

It's time for another excerpt from Music 3.0: A Survival Guide For Making Music In The Internet Age. Although DIY (do it yourself) is very in vogue these days, there comes a time when the only way you can jump to the next level is to partner with a record label. This excerpt details when to know that time has come.

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This entire book so far has been about getting along in the new music world without a record label, but there does come a time when having a label is worth considering if you want to jump to the next level as an artist. Record labels are not intrinsically bad, it’s just that you have to weigh the advantages versus the disadvantages to determine whether the time is right for you to be associated with one or not. 

It’s easy to look at them as buffoons (like we do politicians), but most of them are surprisingly smart. This last 10 years has been humbling for them. It’s shaken out the people that were only in it for the money, so most of the people at labels today are in it for the right reasons and are more entrepreneurial.

Derek Sivers

You might want to consider a label if:

They’re offering you a staggering amount of money. If this happens, you either must be hot enough for a bidding war to have broken out or they really, really believe in your future. Just remember that this might be the last money you’ll ever see and it may have a significant negative impact on any credibility that you have with your fan base. Best to test the notion of signing with a label with your tribe just to see the reaction first since they won’t buy anything from you if they feel you sold them out.

You need money for recording, touring, or any other needs. One of the things that labels do really well is act like a bank using your music as collateral. Major labels still do this as well as ever before, but is it worth the price you’re going to pay in terms of the freedom that M30 offers?

You’re spending too much time on certain aspects of a career. A label can take some of the burden of marketing and distribution off your shoulders. You still have to be involved on some level though, or you run the risk of things getting way off course before it’s brought to your attention. If you don’t have a manager already, this might be a better association than a label when you reach this point.

You need expanded distribution. If you need distribution into brick and mortar stores beyond what a small indie label can provide, a major label can be your friend. They have the relationships, the sales force and the means to collect the money. If you’re distributing by yourself, you’ll get paid if and when the stores feel like it since you have no clout. In some cases, you can’t even get into the remaining chains and retail stores because you don’t sell enough to get on their radar. A major label or large indie sells the stores a lot of product and they’re trusted, so it’s a lot easier for them to get the retailer to take a chance. Plus, the label has some leverage in that they can always threaten to withhold in-demand product if they don’t get paid.

You want to expand into foreign territories. Let’s say that you have a huge following in Germany via your online efforts, but you can’t service them properly because you live in Kansas City. A major label can use their overseas resources to promote you and get product in the stores there. It saves you the hassle of reinventing the distribution and marketing wheels.

You need economies of scale. Sometimes the power of a big label can be used to your advantage as they can cut a better deal with a service (YouTube and MTV come to mind) than you ever could as an indie.

In the video business there was a conscious decision made that video was no longer going to be free anymore. How can it be promotional if MTV doesn’t play it? It has become a product, so we’re going to make money out of it. It turns out there’s a tremendous demand for music videos and they can be monetized. Now we’re the biggest channel on YouTube. But it’s better for us to deal with YouTube on a centralized basis, than as individual labels.
Howard Soroka - Vice-President of Media Technologies - Universal Music Group

You need major marketing. The one thing a major label does well is to market you traditionally. If you want airplay on radio and appearances on television, a label may be your only hope. If you want reviews and articles in mainstream media, they still have the clout to get it done. 

If you feel that you’ve gone as far as you can go as an indie artist. If you need help to push your career over the edge to stardom, then a major label or major label imprint may be the way to go. This is what they do, sometimes well, sometimes not. 

Unless you have a specific need for any of the above that you’re sure you can’t fill any other way, it’s best to stay independent for as long as you can as long as M30 is around. Who knows how long it will last? Maybe a year or two if we’re lucky, but maybe a lot less than that, which might be lucky too since it will spell the latest music business evolution.

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8 Tips To Avoid Bad Band Photos

Band or artist photos are an essential part of the business of music. You need them for promotion, you need them to help get you gigs, and you need them so your fans know what you look like. They're extremely important, so why are they taken so lightly by so many bands?

Check out this site for a collection of the worst band photos. It's totally hilarious thanks to the captions (I can't remember when I laughed that hard for so long), but as you'll see, it's also sad that they have so little regard for themselves and their photos.

Here are some of the things I noticed that you can put to good use the next time you need a band photo.

1) Get the best photographer you can afford. An iPhone shot won't do and neither will one by your local wedding photographer. Get someone who has experience taking band or fashion photos.

2) Stay away from brick walls and train tracks. That's been done to death. Your sound is original, right? Why make yourself look like everyone else with pictures that use the same background?

3) Posing in your underwear isn't cool. You might think you're a revolutionary, but most people just think it's unprofessional. That doesn't shock anyone anymore.

4) The bathroom is not the place for a band picture. No matter what anyone tells you, it's just bad taste unless you have a genius photographer. Once again, it doesn't shock anyone anymore.

5) Giving the finger doesn't shock anyone anymore either. It makes a promoter, booking agent or club owner say, "Next!"

6) Try not to feature the lead singer too much (unless his name is in the band's title). Lead singers love to take their shirts off or wear a see-through shirt. Nothing screams "I need attention" more than that. Unless it's the lead singer and his or her backup band, make it seem like you're all in it together.

7) Eye-liner went out with the 80's. Give it a rest, unless you're an 80's band.

8) Make an effort. Wearing the same clothes that you wore all day doesn't make for an interesting picture. It screams "I don't care." At least give your wardrobe a little thought and wear something clean.

I can think of a lot more items, but hopefully you get the idea. You'll see all of these things for yourself when you check out the bad picture site at rockandrollconfidential.com. Just make sure you're not at work when you look at it. You'll laugh for a long time.

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The Music Copyright Enforcers

Here's an excellent article from the New York Times about copyright enforcement. It's long but filled with interesting information on how the publishing rights organizations (BMI in this case) collects the money that it doles out to songwriters and publishers.

To summarize, the way a publishing rights organization (PRO) collects money is by making licensing deals with the various broadcast entities like television networks and radio, but also with any business that plays music. If you own a restaurant, gym, or just a retail store playing background music, you need a license and must pay accordingly. Even clubs where live music is played must have a license. As you might expect, collecting from a small mom & pop store, bar or club that doesn't have a lot to begin with isn't that easy.

I've been on both sides of this equation. As a songwriter, I loved the fact that someone was actually out there scouring the country to collect money for me (although I'd only see a very very very small piece of it). As a former restaurant owner, I hated the fact that we had to pay what we thought was an excessively high fee for the privilege of playing background music in our establishment, although we did pay it.

The article also has some great info on how the PRO's started, and some of the their high-teck tracking technology.

It's a great article and worth a read - The Music-Copyright Enforcers.

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Social Networking Now More Popular Than Email

The latest data from research company Nielsen indicates that Americans now devote a full 6 hours a month to social networking, up 16% from a year ago.

And what network do they spend their time on? You guessed it! Facebook claims an 85% share while MySpace comes in a way distant second with only 5%, and Twitter only 1%.

So if most time was spent on social networks, what else captures our attention? Online games account for 10% of time spent, while email came in at 8%. Watching video is now a full 4% of all time spent online, which amounts to an average of 3 hours and 15 minutes a month.

As an artist, you may look at those numbers and be tempted to concentrate entirely on social networking for building and communicating with your audience, but that would be short-sighted.

If you read this blog a lot you know that I've always advocated that you capture as many of your friends and fans from your social networks to your mailing list. The mailing list is still your most powerful means of engagement with your fanbase and tribe. Not only is there a personal aspect to receiving an email that fans love, but you also have the advantage of deep metrics not available from many social networks that can be useful in any marketing or promotional campaign.

Remember that a well-formed online strategy features many different and equally important parts.

• Your website is your hub of information and engagement via new content and point of sale.
• Your social networks are your means of frequent but rather impersonal fan engagement.
• Your email list is your means for infrequent but personal engagement. It's your direct marketing tool that can be used for sales (a soft sell hopefully), general information and marketing.

Yes, we're spending more and more time these days social networking, but you still need the other pieces too for a successful online strategy. Don't overlook them.

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Apple's Cloud Music Service A Mirage?

Yesterday I wrote about the likelihood of Apple debuting a cloud-based service in the near future. Today comes word from Cnet that's might not be the kind of service that Apple has planned after all.

If your not familiar with the term "cloud," it means online storage. An iTunes cloud service would allow you to put all of your music online instead of keeping a copy on each device. That means that you can access it from your computer, your phone, or iPad, or anything else connected to the Internet.

But the problem is that a new service would require a new license for the songs from the major and indie labels, and Apple still hasn't even begun negotiations, which means that we won't see the envisioned cloud service anytime soon. Negotiations with one label takes months and months, let alone with all four majors. We'd be lucky to see it in a year.

So why is Apple building a huge new server farm (they call it the "Orchard") in North Carolina?

The speculation is that Apple isn't looking to launch a cloud music service at all. It's for video.

If this is the case, here's how I see it.

• 1) Apple is going after YouTube. Why else build a server farm for video?

• 2) Apple will launch a music subscription service earlier than anyone expected. If the cloud music service isn't an interim step to subscription, that means they're going right to subscription, right?

All this means it should make for a very interesting year of Apple watching.

P.S. It's been reported this morning that Apple has added cloud streaming to its MobileMe iDisk app. It has some limitations though, since it appears to be limited to Apple products, and doesn't support automatic uploads as you add songs to iTunes, playlists or album cover artwork. This shouldn't be considered a cloud music service, just an iDisk improvement, but it can be construed as Apple testing the waters before a full product introduction.

The plot twists and thickens yet again.

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Interesting July Music Stats

Digital music information and strategy company Music Alley puts together an interesting monthly report called NumberCrunch that includes some interesting statistics culled from information sources like NPD, Forrester and Neilsen/Soundscan. Here are a few points that I found interesting (my comments in italics).

• In the first half of 2010, digital album sales grew by 12.7% to 42.2 million units. If the album was supposed to be a dying format, why does it have a healthy growth of almost 13%?

• Digital albums now account for 27.4% of all US album sales. That means that the market for albums is still about 160 million, of which about 120 million are still CDs. The CD may be dying, but there's still plenty of sales life left in it according to these numbers.

• According to media analyst NPD, 7 to 8 million iTunes users in the US would be interested in paying at least $10 a month for cloud-based iTunes services to access their music libraries across multiple platforms. You can bet that Apple will be rolling this out by the end of the year or beginning of next, since they already have the infrastructure in place.

• 13 to 15 million iTunes users would be interested if the service was free. Doubtful that will happen though, unless the service can be monetized in some other way. 

• Analyst Russ Crupnick claims that the potential market for a paid subscription-based iTunes would be $1 billion in it's first year alone, which is about 2/3rds of what its present pay-per-download model. This is the 800 pound gorilla in the room. Almost everyone believes that if Apple pulls the subscription trigger, subscription will become accepted by the consumer almost overnight. But when will it happen? Probably not until well after their cloud service comes into being.

• Home computers accounted for 41.6% of digital music consumption in Q3 of 2009, followed by MP3 players at 32/5%, mobile phones by 12.1% and home streaming devices by 11.1%. That must mean that most people consume most of their music at work.

• Only 23% of people said they listened to music on both their computer and MP3 player, 9% on computer and mobile phone, and 5% on all four platforms. This could be a bad sign for a cloud-based service, as most people won't have any use for it.

• 63% of the people listening to music on their phones are 18 to 24 years old. Is this figure really any surprise to anyone?

I think the most interesting thing about these figures is that the conclusions have been holding steady for quite some time now. Let's see what next month brings.

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Cassettes Making A Comeback?

According to an article in the Sunday LA Times, the lowly audio-cassette tape is making a comeback of sorts. The article states that there are a few record labels like Kill/Hurt, Not Not Fun, Bridgetown Records and Burger Records that use cassettes as a promotional tool of sorts, and actually sell out of short runs!

We all thought that cassettes were history and according to Soundscan, only 34,000 were soldin 2009, but it seems like there's enough of an appetite for new product, and there are enough tape machines still out there that work to constitute a market. In fact, M2 Communications (where Burger Records get their tapes duplicated at) state that they're currently duplicating being 6,000 and 10,000 a month.

The key to making this work is pricing - $6 per unit. Of course, short runs of only 250 (usually at a buck a copy cost) makes the outlay and the risk small, and also make it an exclusive piece of merch for the true fan.

Cassettes are actually not that bad a distribution medium in terms of reproduction quality. Sure, when they first came out in the late 60's the quality was pretty poor, but by the end of their reign the playback quality was surprisingly good. I remember taking a tour of a record pressing and tape duplicator and hearing some tapes off the line played back in the QC department and being shocked how good they sounded. The key, of course, was that their playback deck was aligned weekly, something that never happened in consumer decks.

While the return of the cassette tape is a short-lived fad that will be nothing but a sales blip (if that), it is a good example of thinking outside the box in terms of marketing. It also goes to show that in Music 3.0 almost anything works, even if it's low tech.

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Not Enough Professionals - Not Enough Gigs

It's always been tough making a living playing music, but statistically it's more difficult than ever. This is no surprise to anyone active in the industry these days but now we have some verifiable facts thanks to the US Bureau of Labor Statistics. The chart on the left indicates the number of people who now identify themselves as professional musicians, and how that correlates with decreased sales of music.

Is anyone surprised that fewer people than ever think of themselves as pro musicians? You shouldn't be. The club infrastructure in the US (where musicians perfect their chops and traditionally are able to make a living in the "farm team" before becoming a recording artist) has been completely gutted. Once upon a time you could find a place to play almost every night of the week, regardless of where how good you were. Now that doesn't even happen for many hit artists with multiple hits under their belt.

And that's a big reason why the state of music is what it is today. Yes, we've had huge technological changes in music that have made a big impact on the state of music, but one key element of music that can never be replaced for a musician is a gig. You can't develop your craft unless you perform in front of people - a lot. You've got to get in your 10,000 hours, as Malcolm Gladwell states in his best-selling book Outliers: The Story of Success. Why do you think The Beatles were so great? Play 6 sets a night for a couple of months and just see where your chops are.

Unfortunately, there seems to be no immediate answer to the lack of gigs. Just don't expect anything new in music until things turn around.

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The 90/10 Rule

There's a common rule-of-thumb in business that states that 80 percent of your business comes from 20 percent of your customers (actually called the Pareto Principle). This usually rings true in that in most businesses you have you major customers who bring in most of your revenue, and all your other customers that supplies the rest. If you're in a subscription or mass marketing business where your collecting funds from thousands or even millions of customers (like online), you can still break it down to 80/20 where 80 percent of your business comes from a certain category of users.

The music business was always thought to work on the 80/20 rule as well, but lately there's been a general change of outlook about those numbers. In fact, many music marketers now feel that 90 percent of an artist's income (especially an indie artist) comes from only 10 percent of their fans.

The thinking in the 90/10 rule is that superfans (sometimes called uber-fans or your "tribe") are so passionate that they're purchase just about anything the artist offers for sale, and as a result the income is skewed more heavily in their direction than in other businesses.

There's at least some empirical evidence that 90/10 is indeed true, which means that for an artist to really break big, he has to move those numbers closer to the traditional 80/20 split. A superstar artist has to move those numbers even more. This is how it breaks out:

INDIE NICHE ARTIST
90% - income from tribe/superfan/uberfan (and anything else you want to call them)
10% - income from casual fans

MASS MARKET ARTIST
80% - income from tribe/superfan/uberfan
20% - income from casual fans

SUPERSTAR ARTIST
less than 80% - income from tribe/superfan/uberfan

more than 20% - income from casual fans

Once an artist establishes himself with a fanbase, regardless how small, the marketing goal from that point is always trying to move the 90/10 split closer to 50/50.

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Music Publishers And The 360 Deal

As everyone connected to the music business knows these days, record labels are demanding 360 deals with all of their new signings. Just in case you're not sure, a 360 deal is one where the record label owns a piece of all your income streams, including revenue from touring and merchandise.

Now you might think, "Why should I give them part of anything other than the part that they're supposedly good at - selling recorded music?", and you'd be right. It's pretty outrageous to pay anyone who can't make a real contribution to the success of a revenue stream. A 360 deal in essence gives a label the same control as a manager has, or at least the same fees, but since they're not even that good at their core business of selling music anymore, why should you give them part of something that have no experience in?

But now it turns out that major publishers want to get in on the act too, and are demanding their own 360 deals.

At one of the recent monthly Association of Independent Music Publishers (AIMP) luncheon at LA's House Of Blues, a panel of publishing business affairs execs told the audience that music publishers are now demanding additional rights that amount to major label 360 deals when signing new artists.


The reason why the major labels want (even need) 360 deals is because CD sales are in the toilet, and downloads don't make enough (and even those sales are flat) to compensate. They have to make up for the loss of income somehow, and taking additional rights from the artist is the only way (so they seem to think).

So it is with publishing. Until recently publishing escaped much of the turmoil of the music industry. Mechanical royalties (the royalty when a CD or download is purchased) have dropped, but performance royalties (when a song is played on the radio, television or in a film) have gone up as more and more television channels came on line. But now that income has dropped as well as just about every broadcast entity is paying less for music, so publishers are also trying to make up the lost income.

What's an artist to do? If the label, the publisher, the manager, and maybe an attorney have a piece of all of your income streams, there's not much left.

All the more reason for the DIY approach that's now possible in Music 3.0. That's the only way that you can put yourself in a position not to have to take a 360 deal of any kind. Any kind of success that you generate increases your bargaining power. It's no longer just another way to do it, it's now a necessity.

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