Thursday, August 23, 2007

Thoughts About the Music Industry

By Steven Grant

Had a thought about the music industry the other day. You know, the guys who haven't yet figured out that the Internet has changed their whole business. Funny thing is: while through the '70s and '80s album rock was king, in the '90s and well into this decade, during the heyday of chick singers and boy bands, the focus of the big record companies was entirely on the single. They rebuilt the business around it. The demise of the "hit single," as they exhausted audiences early in this decade, is more than anything else (except possibly arrogance) responsible for the collapse of music industry business. (If an industry still pulling in hundreds of millions of dollars per year can be said to be in collapse.) The record companies, of course, have blamed their fortunes on bootlegging via the Internet.

Which isn't really that off-base. Just not in the way the record companies think.

What the Internet has done, what the record companies intended whether they realize it or not, is to destroy the "album" as the medium of exchange for popular music. Fact is that most albums pretty much divide in two: songs you want to hear again, and songs you don't want to hear again. Even "concept albums" or "rock operas," like The Who's QUADROPHENIA, usually only have a couple of tracks really worth hearing again and again, and if by only listening to those tracks instead of grasping panoramic brilliance of the creator's art... hey, fair's fair. You put this stuff out there, you don't get to dictate audience appreciation of it too. I got the gist of QUADROPHENIA the first time, and color me impressed, but there are still only a couple of songs on it worth re-hearing. The Internet has destroyed album sales because it has made the album unnecessary. Not only has music gravitated to MP3 the same way it gravitated from vinyl to CD in the '80s (and it's not like the music industry didn't milk that tech shift for all it was worth, as people had to phase out their turntables and re-buy on CD everything they still wanted to own) but even if you buy your music rather than bootleg it (and the success of iTunes, EMusic, Wal-Mart and other venues suggests quite a few people are more than happy to buy their music, particularly if there are no DRM or other technological restrictions on the material that would require buying it again if, say, you buy a new MP3 player) the main advantage of buying online is that you can pick whatever songs off an album you like, skip what you don't like, and - this seems to be the part record companies can't get their heads around - they don't have to be the songs the records companies tell you you're going to want. Formerly known as "singles."

What this does is changes the entire ecology of the music industry. The record companies got what they wanted: people are now willing to buy on a per song basis. Many of them just don't think what the record companies want is cheap enough. (So far, EMusic has the best set-up, a low flat fee for x # of DRM-free songs per month, but because it doesn't get much love from record companies, its stock can be a little dicey.) What this means for musicians is, basically, that the album is no longer something they need to worry about. Albums will always have their place, especially as records of concerts or some other special event, but musical acts might just as well spend a month putting together one or two really good songs and releasing them via the Internet than spending six months putting together up to a couple dozen songs of varying quality and inspiration and packaging it as an album. All in all, it's probably the same level of exposure for much less work. It's still possible to make a lot of money off a single if enough people want it, but the problem for the record companies is that recorded music is pretty much back to where it started: as a come-on for live performances. And the Internet is to the point now where virtual unknowns can come out swinging and make themselves known, cheaply, to a very wide array of people in a fairly short timeframe. The mechanisms are falling into place (possibly already have) for acts to organize and finance their own tours, and that's where many of them make their real money. A number of prominent cult acts - Richard Thompson and Robert Fripp leap to mind - are already successfully marketing their own music via the Internet.

But these - cult stars supplying their rabid cults, live performances - aren't areas the record companies will find it easy to invade. They're just too big, gluttonous and top heavy for any of it to make economic sense on their scale. Yet the pins have been knocked out from under albums. In other words, they got what they wanted: it's a singles world now, and more power to it. It's possible the big record companies may not be able to make the transition, just like many of their biggest venues, like Tower Records, haven't been able to. So it's a crisis for them, but a huge opportunity for musicians/performers, and true relief for listeners.

Tuesday, August 21, 2007

The Real "High Fidelity": The little record store that could

By Steve Guttenberg

I want to tell you about my favorite record store, Future Legend. I drop in every week to see what's new, and talk about music with the shop's owners, Paul Ruggiero and Greta Perr, both seasoned veterans of the record biz.
Future reminds me of the neighborhood record shops of my youth, and it's a great place to hang and meet music lovers. When I dropped by last Friday I ran into actor
Michael Emerson, (Ben), from the TV show "Lost." He was doing some last minute shopping before going off to Hawaii to start shooting new episodes.

We Future Legend regulars appreciate it, and probably all share a secret dread--this is the end of the line. We know that what we get here is irreplaceable. Every week or two I see one us thank Paul or Greta, just for being there. When was the last time you thanked a store for being there?

Future offers a surprisingly deep selection of rock, and a broad range of jazz, blues, R&B, reggae, soundtracks, country, and folk--and Future mixes each artist or band's new and used CDs together, so it's easy to find bargains (which are cheaper and way better sounding than iTunes). Paul and Greta are always on hand to answer even your most obscure music question, which sure beats the hell out of staring into the cold glare of a computer screen. Oh, and there's a healthy selection of new and used vinyl treasures. If you don't see a CD you want, Future will special order it and have your music in just a couple of days.

Yeah, the music business is in a shambles and they say the only hope, if there is any at all, is downloads. We'll see, but the little shop just celebrated its fourth anniversary, outlasting Tower Records, which closed last year.
So if you're lucky enough to still have a local record store, support it. For midtown New Yorkers, this is it. Future's on 9th Avenue, between 52 nd and 53 rd Streets, or give them a call at 212.707.8180. And no, they're not on the web,

Future Legend is for real.

Steve Guttenberg is a frequent contributor to a number of magazines and websites including Home Theater, Stereophile, and Robb Report Home Entertainment. He is a member of the CNET Blog Network.

Saturday, August 18, 2007

CD celebrates 25th anniversary

Story Highlights
Compact Disc turns 25 on Friday
CD sales have been falling due to the rise of online file-sharing
Record labels are seeking to revive the CD format

EINDHOVEN, Netherlands (AP) -- It was August 17, 1982, and row upon row of palm-sized plates with a rainbow sheen began rolling off an assembly line near Hanover, Germany.

Are CDs burnt out after 25 years?

An engineering marvel at the time, today they are instantly recognizable as Compact Discs, a product that turned 25 years old on Friday -- and whose future is increasingly in doubt in an age of iPods and digital downloads.

Those first CDs contained Richard Strauss' Alpine Symphony and would sound equally sharp if played today, says Holland's Royal Philips Electronics NV, which jointly developed the CD with Sony Corp. of Japan. The recording industry thrived in the 1990s as music fans replaced their aging cassettes and vinyl LPs with compact discs, eventually making CDs the most popular album format.

The CD still accounts for the majority of the music industry's recording revenues, but its sales have been in a freefall since peaking early this decade, in part due to the rise of online file-sharing, but also as consumers spend more of their leisure dollars on other entertainment purchases, such as DVDs and video games.

As the music labels slash wholesale prices and experiment with extras to revive the now-aging format, it's hard to imagine there was ever a day without CDs. Yet it had been a risky technical endeavor to attempt to bring digital audio to the masses, said Pieter Kramer, the head of the optical research group at Philips' labs in the Netherlands in the 1970s.

"When we started there was nothing in place," he told The Associated Press at Philips' corporate museum in Eindhoven.

The proposed semiconductor chips needed for CD players were to be the most advanced ever used in a consumer product. And the lasers were still on the drawing board when the companies teamed up in 1979.

In 1980, researchers published what became known as the "Red Book" containing the original CD standards, as well as specifying which patents were held by Philips and which by Sony.
Philips had developed the bulk of the disc and laser technology, while Sony contributed the digital encoding that allowed for smooth, error-free playback. Philips still licenses out the Red Book and its later incarnations, notably for the CD-ROM for storing computer software and other data. The CD's design drew inspiration from vinyl records: Like the grooves on a record, CDs are engraved with a spiral of tiny pits that are scanned by a laser -- the equivalent of a record player's needle. The reflected light is encoded into millions of 0s and 1s: a digital file. Because the pits are covered with plastic and the laser's light doesn't wear them down, the CD never loses sound quality.

Legends abound about how the size of the CD was chosen: Some said it matched a Dutch beer coaster; others believe a famous conductor or Sony executive wanted it just long enough for Beethoven's 9th Symphony. Kramer said the decision evolved from "long conversations around the table" about which play length made the most sense.

The jump into mass production in Germany was a milestone for the CD, and by 1982 the companies announced their product was ready for market. Both began selling players that fall, though the machines only hit U.S. markets the following spring.

Sony sold the first player in Japan on October 1, with the CBS label supplying Billy Joel's "52nd Street" as its first album. The CD was a massive hit. Sony sold more players, especially once its "Discman" series was introduced in 1984. But Philips benefited from CD sales, too, thanks to its ownership of Polygram, now part of Vivendi SA's Universal Music Group. The CD player helped Philips maintain its position as Europe's largest maker of consumer electronics until it was eclipsed by Nokia Corp. in the late 1990s. Licensing royalties sustained the company through bad times.

"The CD was in itself an easy product to market," said Philips' current marketing chief for consumer electronics, Lucas Covers. It wasn't just the sound quality -- discs looked like jewelry in comparison to LPs.

By 1986, CD players were outselling record players, and by 1988 CDs outsold records.
"It was a massive turnaround for the whole market," Covers said.

Now, the CD may be seeing the end of its days.

CD sales have fallen sharply to 553 million sold in the United States last year, a 22 percent drop from its 2001 peak of 712 million, according to Nielsen SoundScan. Napster and later Kazaa and BitTorrent allowed music fans to easily share songs over the Internet, often illegally. More recently, Apple Inc. and other companies began selling legal music downloads, turning the MP3 and other digital audio formats into the medium of choice for many owners of Apple's iPods and other digital players.

"The MP3 and all the little things that the boys and girls have in their pockets ... can replace it, absolutely," said Kramer, the retired engineer.

CDs won't disappear overnight, but its years may be numbered.

Record labels seeking to revive the format have experimented with hybrid CD-DVD combos and packages of traditional CDs with separate DVDs that carry video and multimedia offerings playable on computers. The efforts have been mixed at best, with some attempts, such as the DualDisc that debuted in 2004, not finding lasting success in the marketplace.

Kramer said it has been satisfying to witness the CD's long run at the top and know he had a small hand in its creation.

"You never know how long a standard will last," he said. "But it was a solid, good standard and still is."

Thursday, August 16, 2007

Artist, promote thyself

Thanks to new Web businesses, musicians can reach a bigger audience
-- and keep more of the profits for themselves

By Jenn Abelson, Globe Staff August 13, 2007

A full-time career in music seemed unlikely for Chris O'Brien, or at least one that would pay the bills.

But these days, the 27-year-old Medford musician is selling thousands of albums online, along with downloads from his debut CD, "Lighthouse," and he soon plans to offer T-shirts, tickets, and other merchandise on his MySpace page and personal website. He credits at least part of his newfound business acumen to nimbit, a sales, promotion, and distribution company in Framingham that helps emerging artists build careers online.

"This is the era of the independent artist," O'Brien said. "It's easier and more doable than it ever has been. People are opting to remain independent because there's a lot more money to be had."

Nimbit is one of a growing number of businesses, including CD Baby and Musictoday, that have helped make it easier for independent musicians to make a living from their work and widely distribute their music. It is the brainchild of Patrick Faucher and Matt Silbert, who worked for a Web firm, Stumpworld Systems, which developed some of the first e-commerce sites for bands such as Phish and Aerosmith. About five years ago, they decided to design a platform to help budding bands, so they set out to take some of the features created for the major acts and build a suite of Web tools that independent artists could use.

Soon after, they merged with Artist Development Associates and added direct-to-fan sales, along with production and promotion services, creating a one-stop solution for artists to run their businesses. In June, nimbit introduced its online merchandise table, the first portable Web store that lets musicians sell CDs, DVDS, MP3s, merchandise, and e-tickets from a single point of purchase, virtually anywhere online. The tool can easily be embedded in any website, blog, or e-mail that allows widgets.

"Increasingly, recording artists and consumers are uniting and circumventing traditional channels for creating and distributing music," said Mike Goodman, a media and entertainment analyst at Yankee Group in Boston. "These days, musicians can do business directly with consumers. They don't need a recording label. They don't need a store. They don't need Ticketmaster, the way they used to."

Just a few years ago, Steve Roslonek, of Wethersfield, Conn., was getting e-mail orders for his CDs and going to the post office once a week to send of the packages. His growing success as a children's musician made it almost impossible to keep up with the requests. With the help of nimbit over the past several years, he has earned more than $100,000 from sales of CDs, tickets, and merchandise. The most recent service added, selling e-tickets to shows from his website, is a huge benefit for artists like Roslonek, who don't play at traditional concert venues. He expects to sell 75 percent of his tickets that way for a show in Arlington this fall. Though Roslonek was signed last year to a local independent label, Rounder Records, he still uses many of nimbit's services to help sell his work, merchandise, and tickets online.

"There's really no barriers anymore for success," Roslonek said. "This allows me to spend a lot more time on writing, producing. It takes away a lot of the tasks as your career builds."

Artists can get started for free with nimbit's basic service, which allows them to sell digital products only, such as MP3 tracks. Or, for as little as $4.95 a month, musicians can sign up for a plan that lets them sell all products and distribute across the Web, including to commercial stores like iTunes. Prices vary for premium services, which offer complete website management and e-mail marketing features. Several artists said nimbit charges $2 to $4 for each CD sold, less than rival businesses charge.
"Technology is not only creating a myriad of options for fans to discover and buy, but it is also making it possible for more artists to get in the game more quickly without any label affiliation," Faucher said. "There is a rapidly emerging middle class of artists that are building fan bases and creating a business directly with them. This creates a huge need for better tools that can optimize this process for the artist and the teams they employ."

Jenn Abelson can be reached at

© Copyright 2007 Globe Newspaper Company.

Thursday, May 26, 2005

Today's Rock Stars Keep an Eye on the Bottom Line

Here's an article from the Associated Press that illustrates how musicians need to have an understanding of the business side of music. Enjoy!


He entered the rock 'n' roll pantheon as a joker, smoker and midnight toker.

But sitting in a gray business suit in front of 400 corporate executives, Steve Miller's message had more to do with knowing how to take the money and run.

"I love playing, but you can't get to the good stuff unless you keep an eye on the business," said Miller, immediately after speaking at a conference put on by Hackett Group, an Atlanta-based corporate research and advisory firm.

The singer --- known for hits like "The Joker," "Fly Like an Eagle" and "Take the Money and Run" ---was part of a roster of presentations that included "Benchmarking for Competitive Advantage" and "Generating a Return on Compliance Efforts."

Miller's speech underlines a truth that's become more obvious recently --- rock 'n' roll is big business, and hard-living stereotypes aside, the rockers who succeed over the long run are the ones paying attention to their finances.

With traditional revenue sources like album and ticket sales continuing to slide, music industry experts say selling out --- once the ultimate insult in rock circles --- has come to mean much less. British rocker David Bowie startled the rock world in 1997 by announcing he would issue bonds backed by royalties from the future sale of his music. But the shock died down and other acts, such as the Isley Brothers and James Brown, have also issued bonds.

"It's a whole different kind of world we live in now," said Doug Brod, executive editor of Spin magazine. "Artists want control over how they're getting paid; a lot of them just want to take it into their own hands."

Experts say changes in the industry are requiring artists to be even more mindful of ways to market themselves, and their music, to the public. Thanks to Internet downloads, album sales have been dropping steadily for the past five years. Concert attendance has seen a similar dip. And with cheaper recording equipment thanks to computer technology, more bands are competing for fans' attention and dollars.

"With less [record company] money to promote them, the onus really falls on the artists to promote their own careers," said Matt Hatau, vice president of Signatures Network, a music marketing and licensing company that has worked with artists like Kiss, Madonna, Bruce Springsteen and U2.

"They're not just looking to the labels and saying, 'Hey, run my business and hand me a royalty check,' " Hatau said.

If any band has carried rock's hippie image into the 21st century, it's Athens-based Widespread Panic --- whose shows pack in legions of tie-dye-wearing "Spreadheads" reminiscent of the scene at the Grateful Dead's traveling carnivals.

Behind the scenes, though, the group is a $14 million-a-year corporation with profit-sharing, a pension plan and health care benefits for its employees.

"We have a board of directors and board meetings; we have conference calls," said Buck Williams, the group's Nashville-based manager and agent. "We discuss what we're going to do, why we're going to do it, how much it's going to cost and what we're going to get out of it."

The band's six members play an active role in the business, Williams said.

"There are some that are more involved, more vocal than others," he said. "But I promise you, at the end of the day there's not a single one of them that doesn't want to know where the money's going and why."

During his recent speech, Miller traced his business impulses back to Dallas, where, as a 12-year-old, he mimeographed letters to fraternities announcing his rock band was available for bookings --- but only for a limited time.

"I never found anybody who could manage my career any better than I could," Miller said.

And he will not apologize for licensing his songs for commercials.

Warren Hudson, a music store owner in downtown Decatur, defends artists who lend their music to commercial uses, saying sometimes it's the only way to get noticed or stay ahead in the crowded industry.

"I don't necessarily consider it a sellout," Hudson said as he slapped price stickers on a new batch of CDs at his shop.

"It all depends on how you approach it."

Friday, April 22, 2005

Demand Drives Distribution

Selling on-line is certainly easier than traditional distribution options, but the same principle applies: Demand Drives Distribution.

Unless you've got people actively searching for you or your genre on any site where your CD is listed, you're not going to generate sales. The entry barriers are lower than "brick-and-mortar", and a few people will happen across your product on the web by chance, listen and buy. But if you focus on building a demand for your music through performances and shameless self-promotion your chances at success will be greatly increased.

Next Time: The best way to get a record deal is to not need a record deal.

band site to check out: Someday New

Tuesday, April 19, 2005

Marketing Your Music - Part One

Marketing Your Music - Part One

Not everyone has the luxury of being managed by a professional. Marketing is the key element to generating a buzz about your music. Here is a good starting point to begin marketing your music.

Previously we discussed creating a product from your recorded music. Go ahead, produce some CDs to sell at shows to your fans, friends, and family. Why wait for a record deal? You can do it yourself.

CDs can be produced in retail ready packaging for around $2 to $3 a disc. You can then sell them for around $10 to $12 each. You may want to try doing a "short run" (less than 1,000 CDs) first. If you produce 100 CDs, you can test to see if you can sell them without too much of an investment. Remember, your cost per disc on short run will be significantly higher than replicating 1,000+. You can still produce color discs, color inserts and trays and come out with a packaged professional looking product. You can even get your discs screen printed if you want. There are a lot of options available if you want to try a short run first.

Don't forget, make sure you have plenty of promo copies available to send to agents, venues, radio and others.

Collect names for your mailing list anyway, anywhere, anytime. Use these names to mail postcards with your show dates or CDs available. The cost to mail a postcard is cheap. The cost for e-mail is nothing. Don't forget to ask people joining your list to opt-in so you won't be accused of spamming. Make sure you remove anyone from your list who requests it.

Build your own web page to provide useful information about your band, your music and you, list your shows and make your CDs available for ordering online. Convert some of your music to MP3 and offer visitors a sample of your music. Avoid places offering free or cheap services. Do some research and find a web company that offers the best value both in terms of hosting and design. Ask about their customer service policies, availability and track record.

Give fans a reason to make repeat visits to your site. Keep your information and links updated frequently. Maybe a newsletter, continuous show updates, etc. Here's an example of an indie band site I really like:
The Getaway Car.

Gig, gig, gig (even for free)! Perform as often as you can. Collect names, sell CDs, and pass out cards with your contact information (name, telephone, web site address). Make every effort to meet and greet as many fans as possible. Keep in touch through mail, e-mail and your web site (add a guestbook, message board). These people are your client base. They are the people who pay to see you perform, buy your music and merch and more importantly, bring new people to see you. You're working for them. They are your customers. Treat them with respect and provide them with great service. They are your life blood. Don't forget that.

Send out press releases and reviews of shows to local newspapers, magazines, and event papers. You can write these yourself. This costs practically nothing. Make sure you research the correct person to send your press release to at the publication. Send it out 30-60 days in advance.

Spend some time, money and energy on branding - a professionally designed logo, press kit, photos and an EPK (Electronic Press Kit) are important marketing tools to add to your package. You can be creative and get these things produced on a shoe string budget if you work at it.

Find the public and local radio stations that play your type of music and try to meet the key people who can help get your music on the air. A lot of stations offer programming that spotlights local or indie talent.

Print some posters or flyers and put them up in the local area where your type of fans would be. Have your show date or CD title with a web address or phone number of how to order.

Word of mouth is critical. Form relationships with your fans. If you make people feel special, they will take pride in sharing your music with their peer group. Free advertising! Perhaps have a newsletter to your fans. (Remember, you should have a list of names from your mailing list.)

If you have any other marketing suggestions, please
contact me.