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http://www.techdirt.com/articles/20091119/1634117011.shtml

The Future Of Music Business Models
(And Those Who Are Already There)

...from the "a-thorough-look" dept



by Mike Masnick

I'm at the Midem conference this week, and in preparing for it, Steven Masur asked me to write up a chapter for a book he was putting together of thoughts from various thinkers for a gathering of the International Association of Entertainment Lawyers (IAEL) here at Midem. Below is what I submitted. If you're a regular reader of the blog, there's little that will surprise you, but even so, it may be a good read, as it's got a whole bunch of different things I've discussed about -- things like "CwF+RtB" all summarized in one single place. Later, I'll do another post on what I discussed this year at Midem, since it builds on what's written below, and digs in much deeper on how to create compelling reasons to buy.

It's no secret that there's a lot of concern these days about what the music industry will look like going forward -- especially from those who work on the label side of the business and have been around for a bit. A variety of things have caused rapid change in the market. Competition from other forms of entertainment, such as the internet, movies and video games, have put more pressure on the industry, as consumers have been presented with significantly more options for their entertainment attention and dollars. And, of course, there's the ever-present specter of unauthorized file sharing -- or, as the industry prefers to call it (accurately or not), "piracy."

While the industry spent many years fighting the rise of the internet as a distribution and promotion method for music, it was eventually forced to recognize it. The labels eventually licensed music to Apple and iTunes (as well as some other stores). It took them way too long to recognize that people wanted DRM-free music, but they've finally come around to recognize that as well.

But the big new questions are all about licensing. New services are starting to show up on the scene, such as the industry's new darling, Spotify. Then there are attempts, such as those by Choruss and Warner Music, to set up something that is somewhat akin to a blanket license. For the most part, the industry hasn't shown much willingness to do these sorts of deals in manners that allow the underlying companies to survive, let alone profit. Numerous innovative startups have suffocated under burdensome licensing terms -- and as each one fails, it just gives consumers fewer and fewer reasons to actually use these services, wondering how long each will last until it goes out of business.

However, there is another solution: stop worrying and learn to embrace the business models that are already helping musicians make plenty of money and use file sharing to their advantage, even in the absence of licensing or copyright enforcement.

In simplest terms, the model can be defined as:

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model

Sound simple? It is, if you understand the basics -- and it can be incredibly lucrative. The problem, of course, is that very few seem to fully understand how this model works. However, let's go through some examples.



Trent Reznor, the man behind the band Nine Inch Nails, has done so many experiments that show how this model works that it's difficult to describe them all. He's become a true leader in showing how this model works in a way that has earned him millions while making fans happy, rather than turning them into the enemy.

Reznor has always reached out to his fans, and has an amazingly comprehensive website, with forums, chat rooms and many other ways of interacting. He encourages fans to better connect with each other as well. While companies like Warner Music forced all the music videos of their artists off YouTube for many months, Reznor actually aggregates all the videos his fans take at concerts (he encourages them to bring cameras) on one page on his own website. He does the same for photos. He released a (free) iPhone app that allowed fans to locate each other, and communicate with each other, while sharing photos and videos as well. It's all about connecting with those fans, and helping them better connect with each other, so they feel like a part of a club.

From there, he gives fans real reasons to buy. Lately, he's taken to releasing everything he records for free online, knowing that the music will show up on file sharing sites anyway, so he sees no reason to fight it. Yet, he adds many other options that people might want to buy. With his release of the album Ghosts I-IV, he released all the tracks under a Creative Commons license that allowed anyone to share them online for free. Yet, he also set up some cool "reasons to buy." You could get the two disc CD, if you wanted, for just $10. Above that, though, was a Deluxe Edition Package, for $75. It was, effectively, a box set, but around a single album. Beyond the two CDs, it also included a DVD and a Blu-ray and a photobook of images.

Where the experiment got even more interesting was that he offered up the $300 Ultra-Deluxe Limited Edition Package -- of which there was a limit of just 2,500 available. This was an even more impressive "box" that also included the songs on high quality vinyl, and some beautiful giclée print images. But, most interesting of all was that that limited set of 2,500 were all signed by Reznor himself.

It took just 30 hours for all 2,500 to sell out, bringing in $750,000 in just over a day.

For music he was giving away for free.

But, by connecting with fans, and giving them a reason to buy, they did. In the first week alone, combining all the other offerings for Ghosts I-IV, Reznor brought in $1.6 million. Again, this is for music he was giving away for free.

The idea that you "can't compete with free" or that free means there's no business model is a myth. As Reznor and others have recognized, when the music goes free, it opens up new opportunities for better, stronger, more efficient business models.

Reznor's next album, The Slip, was released just a few months later, and again, was given away entirely free, but it was released the very same day as he announced his next Nine Inch Nails tour. All he asked, if you wanted to download the music, was that you provide an email address. He then gave fans the option of what quality to download the songs -- all the way up to lossless FLAC files. All for free. But, if you downloaded the files, you also learned about the tour, and the tickets were quickly snapped up.

The free music didn't hurt Reznor's ability to earn money. It enhanced it.

By connecting with fans and giving them a reason to buy, he's been able to thrive.

Some have complained that Reznor is not a representative example. After all, that huge fanbase came about in large part because of his success under the "old" model, where he was signed to a major record label who helped promote his album and turn him into an international rock star. While some may quibble with how much the label actually helped Reznor, it's worth exploring how this model has also worked for many other artists -- from the superstars to new up-and-coming acts.



Josh Freese is a session drummer based in Los Angeles, who appears on well over 100 albums and performs with many different bands. He's played with (among others), Nine Inch Nails, Guns 'N Roses, Sting, Devo, The Vandals, the Offspring. Yet, outside of certain musical circles, he doesn't have a huge individual reputation with fans. So, when he released his first solo album, called Since 1972, in March of 2009, he decided to set up a system similar to Reznor's Ghosts I-IV experiment, but made it more fitting to his own personality -- which meant making the options extreme and hilarious.

There were cheap options to get the music and CDs, but at $50, you would also get a personal 5 minute "thank you" phone call, where he said you could ask anything you wanted (his suggestion: "Which one of Sting's mansions has the comfiest beds.") There was a limited $250 option to get lunch with Freese at a PF Changs or a $500 chance to get dinner with him at Sizzler. The lunches sold out in about a week.

Then Freese took the model to a different level altogether. At $2,500 (limit of 5 available), he would provide a drum lesson, where you'd get to keep one of Freese's snare drums. You'd also visit the Hollywood Wax Museum with Josh and one of a rotating list of his rockstar friends (depending on who was available). Finally, you'd get to take and keep any three items from Josh's closet.

At $10,000, you'd get dinner with Josh and a rockstar friend, before hanging out at Disneyland (where Josh's father worked for many years, and where Josh got his start as a professional drummer) with Josh. And at the end of the day, you would get to keep Josh's Volvo station wagon -- after dropping him off at home. Obviously, there was only one of those available.

There were also $20,000 and $75,000 options available, including many more offers, like having Josh join your band or be your personal assistant for a few weeks. You'd also get to go on tour with Josh. He would also write and record a five-song EP about you. A teenager in Florida actually purchased the $20,000 option, and spent a week with Josh, including a night on the Queen Mary cruise ship, a pizza party at Mark Mothersbaugh (of Devo)'s house and a game of mini-golf with the singer from Tool.

Once again, by connecting with his fans, and giving them something of scarce value, Freese was able to create a business model that worked.

Connecting with Fans (CwF) plus a Reason to Buy (RtB) worked again.

However, some still complain that he's a product of the "old" industry, even if he was little known outside of it.



The next example is Jill Sobule, who had a hit song in 1995 with "I Kissed A Girl" (not the Katy Perry song). Since then, however, she's been dropped from two record labels and had two independent labels she was signed to go out of business. When it came time to record her latest album, she decided to get her fans to help fund it. She'd already done an excellent job connecting with her fans, regularly interacting with them on Facebook, where she would hold fun contests each day and actually chat with them and respond to questions.

She launched a website called "Jill's Next Record" that -- like Reznor and Freese -- offered up many options for how her fans could support her to fund a new album. They could pay $200 and get free access to any shows for a year. They could get their name mentioned on a "thank you" song. At $5,000, she would do a home concert at your house. She even noted you could charge for that one, and maybe even make some money. She ended up doing five or six such concerts. At $10,000 (described as the "weapons grade plutonium" level) you could sing on the album. This was meant to be a joke, but a woman in the UK purchased it, and Jill had her flown out to LA where she did, in fact, appear singing backing vocals on the album.

Her goal was to raise $75,000, and she had no idea if she'd be able to reach that number at all. Yet, she broke through that number and ended up raising over $80,000 in just 53 days. With that, she was able to go into the studio and record a full scale production, including hiring famed producer Don Was to handle production.

CwF+RtB worked again.

Again, some complain that Jill is not representative, due to her hit song in 1995 -- though, again, they'll ignore her being dropped from two record labels and and having two others go out of business.



So, let's look at Corey Smith. In the earlier part of this decade, Smith was a high school teacher, playing open mic nights on weekends. But then, he started focusing on building his music career. He started playing numerous live shows, and really worked hard to connect with fans. He gave away all of his music for free off of his website, and used that to drive more fans to his shows. On top of that, he offered special $5 pre-sale tickets to many shows, which has a useful side effect: his biggest fans would convince many others to go as well, building up his fan base, and getting more people to go to more shows. He tried pulling his free music off of his website as an experiment, and saw that his sales on iTunes actually dropped when he did that. In 2008, mostly thanks to live shows, Corey was able to gross nearly $4 million. While giving his music away for free. Connecting with fans and giving them a reason to buy worked wonders.



Jonathon Coulton was a computer programmer. In September of 2006, he decided to write, record and release a new song every week for a year -- with all of the songs being released under a Creative Commons license, so anyone could share them. And share them they did. Coulton became a cult sensation, and was making a good living within months of this decision. His fans were supporting him along the way, even creating music videos for every song he released. He started using services like Eventful to more strategically target concert opportunities. If enough people requested a show in a certain location, he knew it would be profitable and started "parachuting" in to do shows that he knew would make him money. Again, by connecting with fans and giving them a real reason to buy, he was able to build up a great following and make a good living.



Moto Boy is a singer/songwriter in Sweden on the wonderfully named label "Songs I Wish I Had Written." Moto Boy and his label purposely put all of his songs on file sharing networks -- including The Pirate Bay (the label's founder, at times, has shared an office with one of The Pirate Bay's founders). But, Moto Boy has worked quite hard to connect with fans. He has a great website, where fans can interact, and he encourages sharing his music in creative ways. When a bunch of his fans started filming his concerts and putting them on video hosting sites like YouTube and Vimeo, his label found the best such vidoes, and put them all together into a "YouTube concert." Compare that to record labels like Warner Music forcing their content off of YouTube. While all of Moto Boy's music is free, he's continued to connect with fans in fascinating ways. Last year, he began selling wind-up music boxes, that play one of his songs. Just recently, he launched a limited edition (only 25) of those music boxes in beautiful, hand-crafted wooden boxes, signed by Moto Boy, with a CD and the music notation inside the box. Connecting with the fans and giving them a reason to buy beyond just the music has turned Moto Boy into a star in Sweden.



Amanda Palmer is a singer who made a name for herself as a member of the "punk cabaret duo" The Dresden Dolls. While she put out a solo album on Roadrunner Records (a subsidiary of Warner Music), she found that they had little interest in promoting her, and took things into her own hands. She reached out directly to fans on services like Twitter, often setting up "flash gigs" where people would show up wherever she wanted to perform. In June of 2008, one such flash gig at a beach in Los Angeles ended up with an impromptu, beautiful, music video for a song that Palmer had just learned that morning, due to a suggestion from a fan on Twitter. And she's doing a good job making money, as well. Bored in her apartment one evening, she started twittering with fans and came up with a jokey t-shirt suggestion, and set up an immediate store, selling $11,000 worth of t-shirts in days. Another night, she started a live video stream from her apartment, and started an impromptu online auction for various items in her apartment associated with a recent tour, often with a personalized twist. In three hours, she brought in $6,000. Connecting with fans and offering them something fun and unique to buy worked wonders. To date, she hasn't received a single royalty check from Warner Music on her album.



Matthew Ebel is a singer in Boston who started building a fanbase by playing live and actively participating in social networks and other sites. He started regularly performing in Second Life, for example. At one point, he decided to set up a "subscription" backstage pass offer, whereby fans could pay $5, $10 or $15/month to get various benefits -- including access to new songs every couple of weeks, as well as having new recorded shows sent to them. Depending on the level of support, they could get access to special shows, gift bags or other opportunities for unique offers not available to others. Ebel has discovered that he's making enough so that music is his full-time job. Subscription revenues represent nearly 40% of his income, which is about equal to live gigs and sales of CDs and digital songs combined. Connecting with fans and giving them a real reason to buy has made it so that he can have career as a musician.



Moldover is an electronic musician based in San Francisco. Being in such a high tech hub, he had an interesting idea for his next album. Along with the music itself, the CD case would be a working circuit board, with all the songs spelled out in soldered electric circuits. These connected various components to make the CD case itself an instrument. Pushing a button on the side of the case, would light up the center and make a noise, which could be modified through a pair of light sensors, creating a virtual theremin. The case even had a line out jack, so it could be plugged into a computer or an audio system. The CDs themselves were sold for $50, and Moldover discovered the demand was far stronger than he expected. Yes, even though we're told that no one will pay for music (without strict copy protection), this less well known artist is doing brisk business selling $50 CDs.

Of course, these are just musicians, but these sorts of models impact the wider ecosystem. Companies like TopSpin, Nimbit and Kickstarter are making this work today (for artists big and small). TopSpin has helped enable musicians to better connect with fans and give them a reason to buy over and over again -- and found that, when it's done right, people absolutely buy. One of TopSpin's artists recently had an average transaction price of over $100, and multiple artists have seen their average transaction price at over $50. The claim that fans just want stuff for free is not borne out by these examples. Across all of TopSpin's artists, they've seen an average transaction price well over $20 -- more than the cost of your average CD. By enabling bands to connect with fans while giving them something of unique value to buy, beyond just the music, these bands are thriving.



And, of course, there's a role for labels to play as well. Terry McBride runs Nettwerk, a Canadian-based label that has tremendous success embracing these sorts of models with a bunch of different artists. McBride has declared that copyright won't even matter within a decade, and he's acting accordingly. But he's making sure that his acts really do connect with fans. With a recent album release by the hip hop artist K-OS, before the album was released, they released all the stems from the songs to let the fans do their own mixes. These weren't "remixes" because the original mixes weren't even out! Rather than worrying about an album leaking, K-OS and Nettwerk purposely got the core of the music out themselves and let fans do what they wanted with it. They then set up a system to submit the fan mixes and to vote on them, such that the best mixes were then put on their own album, and both the "professional" and the "fan mixed" albums were released at the same time -- leading many fans to buy them both. Both albums, separately, but at the same time, ended up in the top 50 on the charts.

As you look through all of these, some patterns emerge. They're not about getting a fee on every transaction or every listen or every stream. They're not about licensing. They're not about DRM or lawsuits or copyright. They're about better connecting with the fans and then offering them a real, scarce, unique reason to buy -- such that in the end, everyone is happy. Fans get what they want at a price they want, and the musicians and labels make money as well. It's about recognizing that the music itself can enhance the value of everything else, whether it's shows, access or merchandise, and that letting fans share music can help increase the market and create more fans willing to buy compelling offerings. It's about recognizing that even when the music is shared freely, there are business models that work wonders, without copyright or licensing issues even coming into play.

Adding in new licensing schemes only serves to distort this kind of market. Fans and artists are connecting directly and doing so in a way that works and makes money. Putting in place middlemen only takes a cut away from the musicians and serves to make the markets less efficient. They need to deal with overhead and bureaucracy. They need to deal with collections and allocation. They make it less likely for fans to support bands directly, because the money is going elsewhere. Even when licensing fees are officially paid further up the line, those costs are passed on to the end users, and the money might not actually go to supporting the music they really like.

Instead, let's let the magic of the market continue to work. New technologies are making it easier than ever for musicians to create, distribute and promote music -- and also to make money doing so. In the past, the music business was a "lottery," where only a very small number made any money at all. With these models, more musicians than ever before are making money today, and they're not doing it by worrying about copyright or licensing. They're embracing what the tools allow. A recent study from Harvard showed how much more music is being produced today than at any time in history, and the overall music ecosystem -- the amount of money paid in support of music -- is at an all time high, even if less and less of it is going to the purchase of plastic discs.

This is a business model that's working now and it will work better and better in the future as more people understand the mechanisms and improve on them. Worrying about new copyright laws or new licensing schemes or new DRM or new lawsuits or new ways to shut down file sharing is counterproductive, unnecessary and dangerous. Focusing on what's working and encouraging more of that is the way to go. It's a model that works for musicians, works for enablers and works for fans. It is the future and we should be thrilled with what it's producing.

Good article, reason to buy has always been number one but connect with friends has brought it into the 21st century.

Most of the references that article makes are about musicians who are both:

-exceptions to the rule .. how many of us can get away with creating a circuit-board cd for $50? None, that's how many. It's a unique success scenario that won't likely be repeated.

- Already have a substantial fan base .. how many of us can log into twitter today, make a few jokes about funny t-shirts, and then sell 11,000 t-shirts in less than a week? None, that's how many. Another unique success story, although repeatable, you need to have 10x the fans to get 1 in 10 to buy a t-shirt, and even that is optomistic.


I don't mean to play the pessimist, but the article reads like "anyone can do it, opportunities are unlimited".. when the reality of it is that any musician today has a greatly reduced chance of being able to live off their craft, moreso than any generation of musician before them, and as I said in another thread - It's easy for already-famous artists to give away music online, then sell out concerts and claim it's easy.

Not so easy when you only got 20 fans coming to shows and are trying to build upon that.

RTB and CWF are good tools, but that's exactly what they are, just like facebook, myspace, etc.. TOOLS. still have to master the trade, and there's more competition for less gigs and fans than ever.

Peace, and oh yeah, it IS another day in paradise, as our #1 collaborator would say

Awesome article Craig!

jsantos wrote:Awesome article Craig!

Thanks! I thought so too!

I think the lesson is, that CREATIVITY in marketing and sales, is what is necessary to make your mark, and be profitable.

NEW IDEAS can, and DO prevail.

We can b*tch and moan that the major labels have lost their stranglehold on the music industry, and that young people today EXPECT music to be free... or... We can EMBRACE the new mediums, and find a way to provided "added value" to get people to BUY our songs, while pursuing other streams of revenue, that are RELATED to our music and our performances.

There is a band, and I forget who it is now (Government Mule?) that started selling their OWN bootleg concert recordings. Rather than fighting people coming in, to record concerts, who then sell the CD's on the STREET, giving the band NO REVENUE... this band, decided that they would RECORD THEIR OWN concerts, bootleg style, only using the highest quality recording equipment, perfectly mixed through their own PA system, and make them available at reasonable prices to fans who join their mailing list.

So, bootleggers are EVIL. Fine.

But unlike the dumbass record labels... this band thought OUTSIDE THE BOX, and made the situation work for them. Now, they are selling MORE albums, cause they record and sell all their major concerts, and they also get the added benefit of having a larger mailing list, for direct sell opportunities, since the people have to join the fan club, to get these concert CD's. And the fans get a HIGH QUALITY copy of the concert now, as opposed to the low or questionable quality of a bootlegger recording from a tiny device in the middle of 10,000 screaming fans!

B*tch and DIE.

or...

Adapt and THRIVE!

The choice really is ours!

And we see what happened to the Major Labels, cause they b*tched and REFUSED to adapt... until it was too late!

Craig, please explain to me exactly how you would add value(s) to yours or any of our music to make it more sell-able (?) We're talking about gimmicks here (not a bad term BTW, but it is what it is).

I'm not arguing the concept, but the scope- Not every artist can do that. In fact, it's the mere uniqueness of presentation and packaging that makes the people in the OP successful (and also the fact they were already successful). If everyone does it, then it just becomes "I'm unique, just like everyone else".. or .. from that cartoon movie - "when everyone is special, no one is"

I'd argue that anyone who is moderately successful in music today (earning a living) would have to be a colossal dumbass to find a way to piss it away and NOT succeed (or progress forward), which renders every example in that article moot.

Now.. I TOTALLY AGREE that musicians need to think outside the box, at least to some degree, but those who are trying to just make a buck to buy some gas and strings can tell you.. teaching people the BASICS - building a fan base, promotions, marketing, etc.. are far more important than gimmicks.

You can come up with the greatest gimmick ever, and still fail because only 10 fans a star won't make.

however, if you have 10,000 fans, a good gimmick can propel you forward faster, but if you got 10k fans, you are already going forward.

I'd rather promote "going forward" than convince people they need a gimmick to get anywhere.

Kramerguy wrote:Craig, please explain to me exactly how you would add value(s) to yours or any of our music to make it more sell-able .

First of all, you seem to be mixing apples and oranges to me.

The people who are selling $750,000 in a single day, of BOX-SETS of their material, have a name. Of course they do. The point of that, is that free music, is not the killer of careers it is made out to be. So when you REACH that level by talent and hard work (no one is going to GIVE it to you) then, rest assured, you have a means of making really good money off your new-found fame!

Now, to the oranges...

The struggling musician. We have always struggled to make a name for ourselves. Tell me how you are being cheated out of that?

What stops you from SELLING your music? You are playing gigs right? Have a table set up for your album? If people like you, they will buy your music.

With my last band, we had not finished a CD that we could sell. So we sold MERCH. Shirts, hats, whatever. We also made an autograph singing table, and gave printed posters out, with all our signatures, to anyone buying merch. It costs 30 cents or something, to produce the posters (black and white) and they got a kick out of standing in line for our autographs... which, believe it or not.... THEY DID!

Sound like a star, and act like a star, and guess what?

People begin to treat you more like a star!

But you and I have no name currently, so tell me again, what you are so discouraged about? What revenues have you lost?

I'm not discouraged, I'm injecting realism into what I perceive as a fairy tale thread.

The original post was about artists who are regionally/nationally known, talking about how successful they are by marketing unique ideas - I cited a few of them to make my points (that their ideas would have most likely have failed if they didn't have the fanbase to support said ideas). Feel free to address those if you feel they were inaccurate.

You are (now) talking about unknown artists selling merch- first off, that's NOT what your previous two posts talked about, and that's nothing new - Bands have survived off selling key chains, hats, towels, bottle openers, you name it.. (aka "merch") for decades. That's nothing new, and certainly isn't part of the model the article in your original post was talking about-

So now your argument has become the apples and oranges in light of the original post.

Kramerguy wrote:
You are (now) talking about unknown artists selling merch- first off, that's NOT what your previous two posts talked about, and that's nothing new - Bands have survived off selling key chains, hats, towels, bottle openers, you name it.. (aka "merch") for decades. That's nothing new, and certainly isn't part of the model the article in your original post was talking about-

So now your argument has become the apples and oranges in light of the original post.

Ok, we're misunderstanding each other.

The premise of the article is that FREE MUSIC can lead to MAKING MONEY, by lthen "SELLING" ADDED-VALUE items, and alternative means.

The principle is that giving your music away FOR FREE in one form... An MP3, can lead to widespread popularity, which can then be capitalized upon, to SELL added-value CD's, increase gig attendance or sell other merchandise.

What do you disagree with here?

Kramerguy wrote:Most of the references that article makes are about musicians who

- Already have a substantial fan base .. how many of us can log into twitter today, make a few jokes about funny t-shirts, and then sell 11,000 t-shirts in less than a week? None, that's how many. Another unique success story, although repeatable, you need to have 10x the fans to get 1 in 10 to buy a t-shirt, and even that is optomistic.

Jonathon Coulton was a gamer. He targeted those listeners, and they responded. But his music is funny, and has an addictive catchy sound - I'm humming "all iwanna do is eat yer brains" right now as a matter of fact.

http://www.youtube.com/watch?v=BjMiDZIY1bM

Making his tunes free to share is the only reason he got out of dodge so quickly. Millions of gamers know his name, and now their parents and non-gaming friends know of him too. Popularity sells I think is the point. That doesn't mean talent isn't required. he's definitely talented.

Chris

Craig and Kramer - you guys are talking about two different things.

Kramer is looking at this through the prism of, "How does the unknown artist struggling to make it become famous using this model?"

I don't think that's what the article was about at all... I think Craig has a much better handle on it.

The article was written because there is a widespread concern in the industry that making music free will kill the cash cow. The article illustrates several examples of people who have built a business model that is contrary to that believe, and they've thrived.

But the article, at least to my way of thinking, is not about breaking out... Sure, there's a case or two for that, but that's not the crux of the article.

The article is more directed at the major labels - the ones who are forcing down content on YouTube and who are saying "don't give anything away!". The article is aimed squarely at THEM, and it's message is, "Your fear is unfounded, and if you'd just embrace the change in the industry and figure out how to make it work to your advantage, you could thrive in this brave new world".


But to Kramer's point - which I don't think the article is really about at all - yeah, you need to learn how to cultivate a fanbase to break out in the first place before these business models have much relevance. Breaking out in the music biz... you could write a whole separate article on that.

However, I will say this: a lot of what they talk about in that article is relevant to new artists. Noush Skaugan is making great use of Twitter and Facebook and a lot of other technologies to CONNECT with her fans, and it's pretty cool. She's building her own little empire of fans as an independent artist. What's funny is - she's very talented, and I believe she will make it big in the industry, and when she does, it will be too late for the major labels to get a piece of the pie. Noush will have figured out the business model and will be successful on her own, and won't have a need for a major label to come in and siphon her profits... The major labels are going to lose out in the end... And it will be their own faults.

Well stated Colors!

I am a member of a forum that discusses economics (I know how geeky is that) and we got onto the topic of the music industry trying to compete with "Free". A lot of what was mentioned in that article came up and was kicked in every direction and it still rings true.

Another way to view it is the long Tail vs the short tail argument.

Short tail is Elvis getting 1% of a 5 million sales "hit".

Long tail is you getting 75% of a 2,000 production run of your latest CD.

Sure Elvis made more money... but your costs are next to nil on the next 2,000 cd's, so its really all on you to "Sell" your "Product", which is where the CtF comes in.

Really, there was a time we needed the "Big Music Labels" to distribute our product, now we can distribute it for "free" (file sharing) and sell something that cannot be pirated (the performance, personal contact with fans).

Another fun comparison that was made... For many years people had to have buttons to fasten clothing together... so unions formed in France to protect button makers. Then along comes the invention of the Zipper and the button manufacturers pressed for legislation to "protect their industry".

Sound familiar? There was a time when musicians made a living PERFORMING... not recording. Perhaps that time is coming back?

thanks for the clarification colors - although, I actually disagree with the article.

How many artists had this "bright idea" to give away music before the internet? why? the cost. It still costs the same amount to the artist to make music today- only difference is the CD pressing and distribution, which the label usually paid and took back.

It costs $$ to make music. The amount of money (usually) goes hand and hand with the quality.

How can you expect sustainable quality when the cost of the guy using garageband (Anyone remember "THE WRITER?") is negligible? You end up with a billion unfiltered "artists" pumping out music into a public domain, stinking the whole place up, basically.

Aren't we already witnessing a business model whereas the only *real* artist development and promotion comes to the likes of jonas bros and miley cyrus?? Sure, indie artists like Lily Allen and others are still making it, but there's far fewer success stories, still most can't afford to just "give it away", and the listener has to wade through MUCH more crap to find anything worthy of listening to (re: the whole place was stunk up).

As a music fan, I find myself growing weary of constantly looking for something new, and at the same time, listenable- much less good. I'm getting the same feedback from my non-musician friends, co-workers, etc.

By giving it away, you place "no value" on it. How can a listener respect a musician who feels their music is so substandard that it should be deemed as without value??

Those big-name bands that give it away aren't in the same dimension as everyone else, as their art already HAS value, which automatically posts value to future projects.

Part of what has me pissed is bands like Radiohead, who made it famous on the OLD MODEL, lecturing up and coming musicians on how important it is to give away free music. It worked for radiohead ONLY because they were already famous. The fact that they missed that small detail confounds me. Maybe they should stick their heads back where the sun don't shine and let us "new model" musicians find our own solutions...

I've always argued that sure, the old model is toast, stick a fork in it, but the 'new model' of "give it away" isn't the solution either, it just hurts everyone, moreso those at the bottom.

-I think MP3 prices *NEED* to be at least half of what they are.. at $1 a track, that's equal the price to manufactured CD's (based on a 15 track CD), but there's no overhead for millions of copies like there is for CD's, so how can they expect the same retail? Make it $0.40 for NAME BRAND songs (major name bands) and $.25 for indie artists. Seems fair enough.

-Adopt the European way of broadcasting radio (pay the artists directly). I admittedly may not understand it properly, but the rest of the world seems to have this worked out better than the US.

-Find a way to stop / control illegal downloading. Quite frankly, if they can track and prosecute downloads of child porn, they can do the same for any other media online. The difference is that one offense is criminal and the other is civil. If it's illegal to *steal* music online (and it is..), then it needs to be a criminal offense and needs to be actively prosecuted. Can't catch a speeding car if none of the cops are willing to patrol the highway, eh?

-THEN, and only then, giving away music (that now has a perceived value) is an acceptable marketing tool.

So maybe I'm on a tangent far removed from the original post, but the article was touting success stories that were unlikely and un-repeatable, and was blowing an awful lot of fake sunshine up our asses.

Kramer,

You're getting this all wrong. "IF" an artist is giving away their music for PUBLICITY, it is a TRADE-OFF. It is not necessarily DEVALUING it. It is a risk, an investment, but most things involving potentially large pay-offs involve risk.

Think of Gene Simmons, marketer extraordinaire of KISS.

Before making it big, they opened for a much more well-known band at a big gig. Gene went out and bought 500 or 1000 (?) blank black T-Shirts and bought a bunch of glue, and some glitter. They glued the letters K-I-S-S on the shirts and poured glitter on them. They had their roadies stand outside the club, and GAVE AWAY FOR FREE, shirts to anyone who wanted one, a KISS T-Shirt, with the stipulation that they had to put it on right there, and wear it throughout their set. When the main band got up to play, after KISS, they look out into the crowd and there is NOTHING BUT AN OCEAN OF "KISS" SHIRTS everywhere they looked! A little intimidating, and a financial expenditure for the band, but it made KISS look like the band with the huge following, even though most of them had come for the OTHER BAND! After this gig, people started talking, and the rest is history!

We all have to decide whether the risk is worth the payout.

I am seriously considering this whole thing, once I start playing out again, which will be soon, now that I can afford to get my cords and get my PA working again.

There is software out there to get songs for free, off MySpace anyway, in just a couple of clicks. I know rednecks in Alabama whose kids have showed them where to find it. The quality is less, but it is the same quality they are already listening to you on MySpace with anyway.

It is almost impossible to protect music anymore.

Chances are, most of us are putting up only reasonable quality demos as it is. Why not give it away for free, and get people to share it far and wide. If they are listening to your music on a regular basis, sharing it with friends, and those friends are then listening, and so on... YOUR BAND is in their minds and ears. They are thinking about your band, talking about your band, when their friends say "They sound good... who is that?" - "Yeah, these guys are really good, and they let you download alot of their stuff for free!"

Maybe, just maybe, that gets them IN YOUR WORLD, just enough, to stay up to date on where your gigs are, to see if you have put new songs up, etc...

Remember, the quality is NOT GOING TO BE what a label spends on making your album... typically $150,000. So if you get enough fan base, the labels take notice, maybe offer you a deal, and you can THEN make your dream album, with MUCH HIGHER quality, the best PRODUCERS, ENGINEERS and ARRANGERS, etc... And sell that. Your fans will buy.

I see American Idol wannabes all the time though. You know, those people who are SURE they are "all that" and they suck! The first question, is whether or not the band has real talent, and memorable originals. Without that, it's local bars and cover songs.

You don't necessarily have to give away a whole ALBUM either.

Try giving away a FEW songs, and see if it encourages people to spread it around to their friends and family.

With shows like American Idol and all the other talent shows, and with places like MySpace and all the other online music sites... It's gonna be harder than ever, to rise above the fray! You need real talent, something unique, good originals, and MARKETING OUT THE WAZOO! Make your own videos. Try and capitalize on current events... write a song about something that will be staying in the news for awhile, etc... Funny gimmicky songs maybe, to get attention, and have a shot at something going viral.

It's a new frontier.

This is NOT a bad thing. There were a limited number of chances to make it in the past too, and maybe there were less people trying to make it then, but the big labels controlled everything and you probably weren't gonna get heard anyway... so... yes, now there is everyone and their brother trying to make it in music, but the difference now is... the labels don't control the public any longer. You may have more competition, but you actually have a better chance to make it on some level, because now...

NOTHING STOPS US, BUT US!

If we put our heart in the music. Find our sound... find our niche, and WORK OUR ASSES OFF... THERE "IS" A CHANCE NOW... more than ever... to get the world to hear what we have to give them!