Sonicbids founder Panos Panay predicts that—other than for licensing—recorded music's main value in the future will be as a promotional vehicle for artists.
Photo: Courtesy Panos Panay
With music being so easy to copy and share, a big question on many musicians'' minds today is: Will I be able to make money from my recorded music in the future? Panos Panay, the founder of Sonicbids.com, has a unique perspective on this issue. He has seen his site grow in the last few years from a service that primarily focused on helping musicians book gigs to one that now helps land licensing and sponsorship opportunities from well-known consumer brands. Starting out as a musician, then becoming a global talent agent, and then a web entrepreneur, Panay has found opportunities where most have seen only lost sales, and he has discovered companies hungry for the right music to license so they can promote their brands. His advice points to new ways that musicians can support themselves with their music.
Is there a future in selling recorded music to the public?
Probably not. Recorded music has become commoditized. As a commodity, the monetary value of music will gradually drift to zero. Now, don''t get me wrong; music is priceless and it absolutely has value. It''s only music that can create such an emotional connection with a listener. But recorded music in the format that it has existed in the past five years will probably not be a viable means of income generation for the average artist. Look at any product out there: If it is offered for free, eventually the value drops to zero.
If that''s the case, what''s the role of recorded music?
First, the most primitive role is a way of archiving and preserving something that evokes an emotion for both the artist and listener. And that''s never going to go away. A second role is what Edison intended recorded music to be: a great promotional vehicle, a way of generating awareness. To me, it''s all heading back to where it started. In the 1930s, people like Louis Armstrong or Frank Sinatra viewed recordings as a way for them to promote the other ways they made money—live shows, TV appearances. I think the future of music is in many ways the past of music.
Where, then, will artists make their money?
Certainly by playing live. That''s never going to go away because there''s no substitute for a live performance by an artist. But another way is to license music. Today, 25 percent of Sonicbids is licensing opportunities. There''s value in licensing because nothing can rival music in its ability to create an emotion. That makes licensing a viable income stream that really can''t be commoditized. So I see these primary streams of income: performing live, licensing your music, and leveraging the brand you are building to sell other things—your own merchandise or a consumer brand hiring you to reach an audience on its behalf.
You mentioned licensing and consumer brands. What are these companies looking for?
Every company out there now is interested in music because they''re realizing that ultimately nothing else out there enables them to evoke a particular emotion and connect in a meaningful way with a consumer. So Starbucks uses music to sell coffee, Apple to sell iPods, Diesel to sell jeans, and so forth. They need music and so look to licensing.
Second, they''re looking for permission marketing. They''re looking for a bridge to the audience that existing bands already have. Bands need to understand that ultimately their greatest strength is connecting with an audience. They know how to do it better than anybody out there. That''s the power of music, right? Nothing captures you more than an amazing live performance or speaks to you like a song. Nothing. Consumer brands are dying for permission to act as that bond that these artists have with their audiences—even if it''s a limited number. Instead of sponsoring Madonna''s tour for an arm and a leg, they''re looking at the aggregation of all these independent artists as reaching a comparable number of people, but cheaper on an individual basis and collectively in a richer way because they have very different and personal bonds with their audience than what Madonna has with hers.
How big is this trend?
The scope is really unbelievable. We have companies of all nationalities and sizes approach us to get music: hospital chains, clothing companies, shoe companies, grill makers, car companies, and more. In fact, there''s been so much over the last year and a half, we set up a division that we call the Brand and Marketing team to help match them with the right artists out there.
Do you have an example of how companies work with musicians?
Sure. The Gap worked with musicians when they celebrated their 40th anniversary this past August. With our help, they got independent artists to play simultaneously in 800 Gap stores across North America. It''s a great example of a brand leveraging existing community to generate buzz and excitement. Every band out there probably created a Facebook event, saying, “Hey guys, I''m playing at the Gap!” I think brands are realizing that in many ways, the marketing of the future is not going to be just about hitting customers over the head with mass media advertising. As less people congregate around major TV events and fewer people read print publications and newspapers, a lot of the money is shifting to creative ways of reaching audiences. Musicians can tap into this. But let me make this clear: I''m not saying you become a pitch person for a commercial brand. There needs to be a line drawn between your values as an artist and what these brands stand for. But we''re seeing more and more brands tapping into this artist base as a means of reaching and connecting to people.
Do you see companies perhaps taking on the role of the record label?
Yes. Considering what the record label did—production, distribution, promotion, and management—it''s all been substituted by things that are happening online. You can make your music on your laptop for next to nothing, you can distribute it on TuneCore, you can promote your music using Facebook and Twitter, and then get gigs on Sonicbids. If there''s one thing that the Internet hasn''t successfully done—even though some sites are trying to achieve this—it''s fund you as an artist. That''s what labels did traditionally. In many ways, consumer brands are not unlike wealthy art patrons in the Middle Ages: If we didn''t have a wealthy class of people back then who appreciated art, there wouldn''t be any art for us to look at today. To me, today''s wealthy art patrons are likely the consumer brands. I think ultimately that''s how I see musicians being able to create sustainable careers. The artists that will benefit from this I call the “artistic middle class.”
Who would be part of that?
It''s a class of artists who are jumping on these changes and realizing they''re empowered and they need to be entrepreneurial. They''re not sitting around waiting for things to happen to them. They realize their most powerful asset is connecting with an audience, and that in today''s world it is not about broadcasting to the masses through a monologue, it''s all about collaborating with their audience through dialog.
How do you advise that musicians grow their fanbases?
First, focus on building an audience. Toss away the old paradigm of the broadcast era that to make a sustainable career you had to reach millions of people. Today you have the ability to connect with folks in a very different, incremental, and personal way.
Second, it''s important you become a great marketer. Today you''re competing for attention and an audience. If you''re looking at music as more than a hobby, you need to make as big of an investment in understanding how to create and connect with an audience as you did when you learned to play scales. You must cultivate an audience of superfans and use those connections to help build your career.
Third, to build an audience, you need to respect them, collaborate with them, and talk with them in ways that artists in the ''80s and ''90s didn''t. The most successful artists out there are collaborating with their audience as a means of enriching those bonds. It then snowballs. There are artists out there Twittering, Facebooking, MySpacing, and Sonicbidding. They are doing everything they can to seep into the public consciousness.
The future is going to be about these artists who know how to leverage these little mini-brands they are creating and the audiences they are cultivating to later collaborate with consumer brands as a means of creating their own music career.
Randy Chertkow and Jason Feehan are authors of The Indie Band Survival Guide: The Complete Manual for the Do-It-Yourself Musician and The D.I.Y. Music Manual, and founders of the open and free musician resource IndieGuide.com.