Whales & Baby whales want to give you their money

Whales & Baby whales - terms from the gambling world to refer to big spenders - are, according to this article, responsible for as much as 50% percent of the income where a business model begins with a free option (such as online social gaming).

@Lefsetz pointed this out in an email yesterday:

When you employ a freemium model, a small percentage of your customers will generate a significant part of your revenue. This is why you must offer expensive tickets and merchandise for these diehard fans.

...which he got from this article on allthingsd - a must read for it's views on where the music industry is going in terms of how an artist will earn an income - not from selling recorded music in the long term is the conclusion!

And that's why the freemium model to build a mailing list of fans with whom you engage continually (rather than in an album cycle) will allow you to offer your 'whale' fans music experiences that will form a large chunk of your income.

That article link again.

The modern musician NEEDS time

I could've titled this post in a number of ways and actually deleted and changed he title a few times.

I don't normally do that, but I hoped to attract attention and make people take the time to read the article it links to, because it encapsulates the whole truth about what being a musician is all about today....and it's written in business management speak by a non-music industry writer!

But it's EXCELLENT. Read it here.

Smart managers realize every artist is a standalone business that generates income from multiple revenue streams. A manager's job is to create those businesses and run them well. This requires thinking globally and being agnostic about which revenue stream or territory is the most important. As long as those channels can deliver the aesthetic the artist wants and make a profit, the business is a success.

But the business of relationship building is not a quick one. Artists have to earn the respect of fans, convert that respect into trust, and, eventually, convert that trust into faith. Building communities takes time, and it can only be achieved over the long-term. In this model, artists can no longer be treated as interchangeable hit makers.

This writer understands the turning point we are at.

Make your music, work hard to be as good as you can be, put it out there and grow and develop in sight of and with help from your fans. They will come along with you.

The second KEY lesson in this article is:

Value the artist-fan relationship as highly as traditional rights.

i.e. don't just make music and try to sell records. The value is in the long-term relationship with your fans - and that's not just a monetary value, it's artistic, cultural and emotional as well.

Those fans will sustain you for a far longer period (including fiancially) if you treat them properly and maintain that relationship.

Read the whole thing here....please.

Future of Music

Go and read the brilliant presentation by JWT on the future of music in our new post on the main site.

It's full of insight and great ideas that you can use.

Read it here.

How to market music online

Bas Grasmayer is one of the people you run into online when you get involved in any aspect of online music marketing - and he knows his stuff.

He works for a digital distributor that has a focus on the DIY musician and has just finished his heavyweight thesis for his degree course - The Answer is the Ecosystem: Marketing Music Through Non-Linear Communication

I've read a lot of it already, but more importantly, I've bookmarked it and will go back to it again and again.

The part that I have focused on so far is the section where Bas talks about creating an ecosystem for your music to live in:

1. First, a band, group, artist, label, has to differentiate themselves. This means, their music has to be very good, but it also needs an element which defines it and which makes it different from all the other music in the niche or sub-genre.
2. Second, as an artist or label, you need to give fans a message that spreads. Niels Aalbers mentioned that people love telling stories. With the phenomenon of word of mouse, stories spread faster and more easily than ever. This does not mean that you have to tell stories in your songs, but that you have to be a story, as an artist or a label, be remarkable and be worth mentioning. A good example of this is the immensely popular pop artist Lady Gaga, whose songs are (arguably) about nothing, but the identity of Lady Gaga is a great 'story' (one only needs to look at the pictureon this page to understand that).
3. Third, when this story starts spreading, that's when you start building your ecosystem. This has to be done with patience according to Niels Aalbers, specifically noting that business models should be kept out of the door for as long as possible.
4. Fourth, once the ecosystem is in place, one should start listening very closely to this ecosystem to see what it wants. This is a paradigm-shift in marketing communications, because it has traditionally been about finding a consumer for your product, but this is about finding a product (business opportunity) for your consumers

You might think this would be a bit heavy to wade through, but it's not!

You see Bas, as a  futurist, hasn't published his thesis in a mass of text, but as a very, very cool HTML5 site. You can skip about and read bits as they take your fancy.

Without wishing to be too rude about Tony Wadsworth's report Remake, Remodel: The Evolution of the Record Label which is broadly in the same ballpark (OK, I admit its directed to the record industry rather than the DIY fraternity...but they both need to learn the same realities!), Bas's effort makes Music Tank's approach look laughable. Their report, which isheavier on supposition rather than data, costs at least £45 (Bas's is free under Creative Commons) and doesn't address the core issue of what to do about the changes in the way people consume music in the ay that Bas does.

PLEASE take the time to read and bookmark Bas's report. Its ace both due to it's content but also just because of the way he has made it availbale to all.

Here's the link.

What happens for musicians when radio dies?

Image by C.P.Storm

I'm not sure that I have any idea!

Bob Lefsetz has been saying for ages that radio doesn't break acts - but he's wrong, or maybe just speaking too soon! It and TV still have that reach that creates the 'water cooler effect' even if the water cooler is now Facebook or somesuch.

But it will happen and this great article on Hypebot looks at some of the ways that it will unfold.

What does it mean for musicians? - well, hopefully, the lessening of the power of radio means that not everyone will want to listen to the same homogenous sound and so opportunity for niche artists will increase.

Whether it does or not, we shall have to wait and see, but being au fait with what's happening, as it happens, and seeing how listeners' behaviour is changing is going to be something all aspiring musicians are going to need to be right on top of!

In the next five to ten years, the "what" of radio is going to be flipped on its head and transformed into something that's fundamentally different. The young and the digital are going to live through the greatest transformation that traditional radio and in-car music have ever seen. In this post, we'll talk about the democratization of radio, the app revolution, the personalized music experience, e-commerce on wheels, real-time station analytics, and the creative destruction that will ensue.

Read the whole piece (and comments) here.

Lessons from your elders!

We posted an interview with Jac Holzman, founder of Elektra, a while ago - at the bottom you'll find the full length version that I have since uncovered.

The short version was great - this is even better!

I dug it up as there's a great post on Mic Control which is a round-up of ideas from Jac Holzman written by @wesleyverhoeve after hearing him speak at a conference.

For this week’s post I wanted to share some lessons from a panel discussion in which Mr. Holzman, celebrating 60 years in the business, dropped some knowledge. Mr. Holzman not only is one of the greatest music men and creatives of all time, he is also one of the very few senior executives in the music business that always thinks and moves forward as both a technologist and a futurist.

Read the nuggets of widom here.

And here's a link to the full length interview if the embed lets me down!

 

The internet is a level playing field for artists

This is a great post on the Future of Music blog about how the Internet might develop into a two tier system with not all its functionality available to all. Maybe - I'm not convinced that we'd settle for it now that we're used to it.

But, the reason for linking to it is that the article looks at a bunch of ideas that artists are using to promote their music from allowing artists to remix their catalogue to filming daily versions of track performances around their house.

Use them for inspiration.

Read them here.

What will it be like in ten years time?

I got asked to point you all to this survey about where we'll be in the music industry in 10 years time. I've already completed it.

Music Supported Here has launched Ten in Ten. The concept is simple. Ten questions that will be answered by experts from the music industry – musicians, fans, managers, labels etc – to give an overall picture of what we think is going to happen.

“Will illegal downloading become less of a problem? Will recording contracts be fairer? Will there be less new talent emerging? None of us can really be sure of what 2021 holds for the music industry, but we think that the opinions of thousands of people who live and breathe the music industry will produce some pretty accurate predictions’.

Take the survey here. 

We'll do our best to follow up on the discussions that the poll causes at the review event.

 

 

Making money from music is a struggle

I saw this post yesterday thanks to Jon @MicControl.

It's a sad truth, but one that artists need to get their head around before they embark on a life where making music is their only or main source of income.

Even a level of success which looks profitable to the outside world often leaves an artist in a strange netherworld of some fame, yet no cash! At the same time, most people around them will asume that they have made plenty of money. This is amplified in a band where there's not a lot of cash generated and it has to feed more mouths. Have look at this classic rant from Steve Albini which explains why an artist signed to a record company can end up selling a lot of records and yet make no money.

The DIY musician can do better than the signed artist if they can fund their record releases and touring to profit, but it's not easy for them either.

Forewarned is forearmed.

The idea that musicians—even well-known musicians who sell out large club shows—have money is a misconception for the most part. Financial concerns and viability obviously vary from artist to artist; no two musicians are exactly the same when it comes to money and how it’s made and spent. But what most fans fail to realize is how much it costs to be a musician and how much more it costs to be a musician on the road.

Read the whole post here.

Freeconomics - free white paper study on giving your music away for free

I urge you to download and read this paper, primarily for the case study of Canadian band Mister Valaire's rise over 4 years to solid profitable working indie band - all through the use of 'freemium'.

Bob Lefsetz has recently been banging on about how the album is now just a marketing tool for the act (and their live performances) but adding the twist that chasing the hit and the record deal to provide it is a short term strategy doomed to failure.

For most independent acts, I agree.

Mister Valaire is a flagship testimonial that the modern paradigm is primarily about taking years to develop the craft, and the fanbase to sustain you through a lengthy career. This is the future music business model for most.

Virginie Berger's second report for Midem is well thought out and provides proof not just theory. I loved it.

Read it - you have to sign up to get it - but it's worth it.

 

The Future of Music - Free Gerd Leonhard books

Do NOT miss this.

Every artist should read Gerd Leonhard's definitve take on the future of the music business.....and he is now giving it away for free.

It's a few years old, sure, but it is brilliant.

He's also offering two other books that I've not read yet, but I've downloaded them too!

Get the free eBooks here.

NME's 10 digital music predicitions for 2011

What it says on the tin.

Check them out here - 10 Digital Music Predictions For 2011.

I'm not convinced by half of them!

Streaming is the answer to music distribution. That we haven't yet found a way to make ad-supported services like Spotify pay isn't the end of it. Nor do I agree that MySpace is over. It's over as a hub for your musical online presence, but it is still a very highly trafficed (sorry - I know that's not a word!) place to hang out your musical schill - so you'd be daft not to.

Some of the points I do agree with - like the one on fan funding!

Well, I don't ever really expect the NME to know what it's on about, do you?

Amazon moves into content - is a record label next?

This is an amazing article - not for what it tells us about Amazon right now, but because it gives a glimpse into the future that traditional media companies just can't see.

The future of music as a business can unfold in a myriad of ways - some of which we just can't guess at. But, it does seem clear that some of the massive companies that have grown from the late 20th century technology boom and the massive growth of the internet in this century may well be the ones that change it forever.

Apple, obviously, have changed the landscape for distribution and retail. Facebook has a reach that no artist can ignore.But there are and will be many others.

What are the existing record companies and live promoters doing to counter it? Pretty much nothing, and what they are doing is too late and way behind the curve!

This article is about how Amazon has announced a scheme for budding directors and screenwriters to pitch movie ideas to them for funding and possible production in Hollywood. It's called 'Amazon Studios'.

But, they also bought a small book publisher yesterday - are they going to do the same as a book publisher?

And if they are, surely they'll end up doing it for music. And if the second biggest online digital retailer wants to sign your record and promote it heavily - will you go there or collapsing EMI?

Take a look at My Major Company for a model that would work for a company like Amazon - a very interesting fan-funded model.

This is the post about Amazon:

Amazon may be the internet's dominant ecommerce company, but its ambitions extend well beyond retail.

It has fast become a key player in a market that is expected to become very large -- cloud infrastructure -- and now it appears to be making some moves into content which could be harbingers of things to come.

Yesterday, it launched Amazon Studios, a website for aspiring filmmakers and screenwriters. The concept is simple: allow those aspiring filmmakers and screenwriters to upload their work, collaborate and obtain feedback from others, and take the cream of the crop forward for possible production.

Read it on econsultancy here.

 

 

 

 

10 truths about the future of music

The music industry is changing at an unprecedented rate and it's often difficult to work out what the future of music will be.

Those at the forefront of the change should get a hearing though - like Jason Feinberg.

I've been covering the digital music business for MediaShift for more than 18 months, and in that time I've chronicled new services and examined key trends and news. Below is a look at 10 things that I've come to believe are true about the modern music business.

Read his 10 truths here.

Imogen Heap does it - you can too

Imogen Heap epitomises the future of music. Self funded, web 2.0 everything, fan friendly etc.

This interview may not tell you anything new about her and the way that she engages with her fans but her holistic approach to her music and her fans is well worth your study.

When the singer-songwriter Imogen Heap heard last December that she had been nominated for two Grammy awards, her very first thought was, 'What am I going to wear?' Heap, 32, who had been nominated for the Best Engineered Album Grammy (as well as Best Pop Instru-mental) wanted an outfit that would capture the LED lights of the studio that she had built in her childhood home in rural Essex to record her third solo album, Ellipse.

Not only that, she wanted a creation that would involve her fan base, with whom she was in contact during the making of the record via fortnightly video blogs from her home and frequent tweets (Heap has nearly 1.5 million followers on Twitter).

So she asked Moritz Waldemeyer (a British-German designer and engineer who has worked with Zaha Hadid) to construct an elliptical collar for her dress, around which messages sent to the dress's Twitter account scrolled in LED lights throughout the evening. She accessorised with a see-through Fendi handbag containing an iPod Touch that was constantly uploaded with images sent by fans, plus a transparent biodegradable parasol (just because).

Read the whole article here.

More musicians making money

This article on Hypebot has postitive implications for the diy musician.

If it's true, as Tunecore's video claims, then more and more self reliant artists will be able to survive in the new music economy.

Read the article here

And watch the video.

 

Money vs Cool

Bob, again, on what it takes to make it and his vision of the future of music.

Lots of people think he rants and misses the point. I don't.

I think he rants and makes some genius, insightful points. This is one I'd urge you to read.

In order to make it and sustain in the music business, it can’t be about the money.

I know, I know, this is the last thing you want to hear.  But that’s why you’re never going to make it.  If you’re going to make it, it’s got to be about the obsession, the need to make it.  That’s what Mr. Nocera points out in his column.  Facebook may have been the Winklevoss twins’ idea, but they never would have made it successful.  They were obsessed with rowing, Mark Zuckerberg was obsessed with coding, with changing the world.

Are you obsessed with music?

And, if you are, do you own the musical equivalent of a Harvard degree? If I mention some obscure band from the seventies, do you know it? You’d be surprised how many successful young musicians do.  They know the history of the game.  You’ve got to know where you came from in order to make it today.

Read the whole thing at Bob's site.

 

A tale of two Simons

Sorry - we shouldn't have to read this, but take it as intended.

A treatise on the future of music, everything that is wrong with the music and media business, or just the death throes of an old system that has nothing to do with music at all.

You tell me - but it's worth reading to the bitter end!

Normally at this time of year Cowell would be shuttling between London and Los Angeles, wrapping up The X Factor in the UK and preparing for his role as a judge on the next series of American Idol, the show that made him a star in the US. But not this year. Following a split from his on-off friend Simon Fuller – the man who created Idol and the brains behind the Spice Girls – Cowell is going it alone. Next year, he launches X Factor in the US, where it will compete directly for advertisers and sponsors with Fuller’s Idol – the biggest programme on American television for the past eight years.

Read about the Simon twins here.

Show me the money - where's it at in the music business?

Whilst many cogitate (including me!) on the state of the record business and the future of music, we all know that there is still plenty of money to be made from music.

This weighty article in the Economist looks at the strange state of affairs that sees one part of the industry colapsing and others flourishing.

Yet the music business is surprisingly healthy, and becoming more so. Will Page of PRS for Music, which collects royalties on behalf of writers and publishers, has added up the entire British music business. He reckons it turned over £3.9 billion ($6.1 billion) in 2009, 5% more than in 2008. It was the second consecutive year of growth. Much of the money bypassed the record companies. But even they managed to pull in £1.1 billion last year, up 2% from 2008. A surprising number of things are making money for artists and music firms, and others show great promise. The music business is not dying. But it is changing profoundly.

Read it on the Economist site.

Promoters take the strain, but will it change?

Bob Lefsetz gets his weekly props from me today - I love all his stuff on the future of music.

This is his take on how the power shifted from promoters to acts who now have to overpay for the talent - How much longer can that go on, and do the promoters need to find a way to invest in the talent to grow the stars of the future?

Well worth your time to check out.

You see the last forty years have been about talent getting the lion’s share of the dough. And that’s what killed the major labels. As soon as there were alternatives, the superstars went elsewhere. And will continue to do so. Unless the labels make fair deals. But if they cut fair deals for stars, they’ll have to cut fair deals for wannabes, and unwilling to set a precedent, they’d rather stand on ceremony and fade away.

Read Bob's article here.