The platinum towers of music industry temples have trembled in Biblical proportions. Former titans of music retailing like Tower Records have folded, and major labels have been hit hard by file-sharing. With dramatic changes in traditional music retail and distribution, how do artists find the Way, the Truth, and the Light? End times bring forth new revelations. We the artists have become the authors of a new testament in the future of digital media, and can flourish by taking advantage of this newly-level playing field.
Modern, successful music companies think differently. There are electronic distribution labels (digital only) that do not manufacture standard CDs. INgrooves (www.ingrooves.com) claims to be the world’s largest digital record company and a leader in digital entertainment. Their paradigm is to let fans burn the physical media while providing them with the professional content, graphics, music and text. Warner’s “e-label” will release clusters of songs online; the artists will retain ownership of their masters and copyrights while signed to the label. EMI Music CEO Alain Levy declared the CD almost entirely dead and buried. (Levy was axed several weeks after making that pronouncement.) Paul McCartney’s new album Memory Almost Full was released through Starbucks’ Hear Music label and sold over 160,000 copies the first week—33% more than McCartney’s previous release on EMI, his long-time label. As CD sales wane, many labels are rethinking the album format altogether, requesting acts to release two songs every quarter.
In an effort to re-ignite disc sales, Warner Music has introduced MVI (Music Video Interactive), a format that combines album and DVD content; it spins in anything that supports DVD playback. The typical MVI includes hi-resolution audio and 5.1 surround sound audio, MP3 files, behind-the-scenes material concerning the album, and a ring tone program that allows making a ring tone from any song on the album. Snakes And Arrows, Rush’s 18th studio album, is one of the first to be released in the new format.
In October 2007, Radiohead rocked the industry by making their new album In Rainbows available online as a free download. But, people could also decide how much they wanted to pay for it. Record industry executives predicted that the experiment would be a financial flop, but 48% of U.K. downloaders paid for the album, averaging $5 per download. 40% of U.S. downloaders paid for the album, but they paid a higher average of $8 per download. The experiment had an intangible value by making fans more loyal to the band, and more likely to recommend the album to their friends and attend concerts.
Either way, Radiohead’s gambit may have been shrewder than the numbers would at first indicate. Some years ago, William Fisher of Stanford University published some interesting data on the CD’s cost structure. According to his figures, the retailer’s slice of the CD is 38%, while distributors take 8% and marketing another 8%. The artist, in contrast, typically gets only 12% and the music publisher 4%. So the maximum Radiohead would get from a conventionally-marketed CD priced at $16.49 is actually $2.63 which, coincidentally, is almost exactly what Comscore stated they received from their online experiment.
In late 2006, Barenaked Ladies grossed $978,127.99 in revenue from intellectual property in the first week of music sales from their new album. Understanding this sales figure requires looking beyond the numbers on the charts, according to Terry McBride, band manager and CEO of Nettwerk Music. McBride notes BNL released their album on their own artist-run label, Desperation Records, in multiple formats—from physical CDs to digital albums, deluxe editions, USB flash drives, ring tones, multi-tracks for remixing, streams, etc. Not only do all these outlets generate revenue, but also the percentage the band actually sees is significantly higher since they own their intellectual property. BNL actually hit as the #4 digital seller in the U.S. and #3 in Canada. Barenaked Ladies Are Me, the first original album in three years from BNL, charted at #17 in the U.S. with only 36,811 albums sold and #7 in Canada with only 8,008 albums sold.
Corporate giants spend billions in aggregate acquisitions (i.e., purchases that combine content companies, technology, and software). These corporations sponsor, acquire, and morph companies like YouTube and MySpace to beguile the eyeballs of today’s youth. The Ozzfest is a perfect example of a new corporate music model. People were frustrated with overpriced CDs so they got it free online. Concert tickets were also becoming overpriced, so last year Ozzfest was free—one helluva good distribution method. Corporations sponsor these “tastemakers” (influential musicians and blogsters that set trends and styles) who can drive traffic to their sites. They exchange free concert tickets for personal contact information from that desired demographic.
A recent Content Delivery & Storage Association summit (CDSA) featured keynote speaker Mick Fleetwood. As founder and manager of Fleetwood Mac, his stellar music career spans a 40-year evolution of music and delivery formats—8-track tapes, vinyl records, cassettes, reel-to-reel, Digital Audio Tape (DAT), LaserDisc, CD, DVD, and downloading. He reminded us that with every transition, naysayers prophesized the demise of the music industry when actually, the changes had a revitalizing effect. He stated that every “transition moment” offers new guerrilla marketing opportunities and also, “quality and integrity creates longevity”; with a “long tail” marketing mentality, quality content can be morphed into a variety of iterations. (Coined by Chris Anderson, the Long Tail concept enables potential distribution and sales channel opportunities created by the Internet that enable businesses to develop and extend that market successfully.)
THE WAY, THE TRUTH, AND THE LIGHT
I. Digital Distribution. Snocap’s digital distribution model allows musicians to sell downloads directly from their own site rather than relying on other sites. You upload your songs to Snocap (Figure 1), then grab the bit of code they provide and plug it into your site. This creates a “store” on your site where people can hear 30 seconds of a tune, then purchase it for download. Snocap makes your songs available on MySpace or your own website, and accepts anyone (which iTunes doesn’t). You don’t even need to have a physical CD. www.snocap.com
II. Physical Distribution. CD Baby (Figure 2) has re-defined the independent model of physical CD sales and distribution. It took them four years to hit the $1,000,000 payout mark; now that can happen within a single week! CD Baby has also forged digital distribution agreements with iTunes, DigiPie, iSound, Tasty Audio, Naros, Flip and more. www.cdbaby.com
III. Electronic Press Kit. Sonicbids is an online service that allows musicians to create an electronic press kit (EPK) and connect with people who book, license, and promote music worldwide. In June 2007, over 300 musicians who submitted EPKs online had been selected to perform in festivals, conferences, contests, film, and TV. Bottom line is that it gets your music into the hands of people who you might not otherwise be able to access. www.sonicbids.com
IV. Ring Tones. Cell phone ring tones have become the newest mass music distribution method. In fact, many artists make more money on ring tones as they sell for two to three times more than a digital download. Imagine playing live and having a banner up during the show advertising that you can download your album right now on your iPhone—with this strategy, fans don’t even need cash or credit cards, as they just pay with their iTunes account at the show. Creating ring tones of your own music is pretty cool; you can do that at www myxertones.com/default/.
V. Internet Radio. Broadcasting your music 24/7 on your own Internet radio station is another great way to find another audience. Live365 (Figure 3) allows users to create their own stylistically unique format, upload original material, and find new markets. I am astounded at how many times a week users listen to my radio station Voodoo Radio. live365.com/stations/kozmraz?play&site=
VI. Market Branding. Content sites like Cafepress and Zazzle.com can Manufacture On Demand (MOD) an entire merchandise catalog of branded t-shirts, coffee mugs, mouse pads, posters, etc. you can sell at shows. Major recording artists use these services; it doesn’t cost you a cent, yet expands your merchandising possibilities. www.cafepress.com, www.zazzle.com
VII. Social Networks. MySpace, Friendster, Facebook, Second Life, etc. have been a successful tool for live performers who use the online community to build “friends lists” for touring and new release information. It’s a good idea to form co-operative alliances that help everyone; for example, an East Coast hardcore band and a West Coast band can put each other on their top eight list; promoting each other’s MySpace pages expands both audiences. Or, check out Ernie Halter—his fans place his live show banner in their MySpace page. He can update that banner image by simply revising the image while keeping the same URL, which updates all the MySpace images carrying the banner at once. If you don’t have a blog on blogspot, get one and keep it going. You will be ranked in days if you do. Use Pingomatic (basically a “ping engine”); every time you update your website, blog, or MySpace page (or anything to do with your band), you submit it to Pingomatic and they notify the search engines. You can also post to all of the social sites with a service like www.socialposter.com. www.myspace.com/erniehalter
VIII. Electronic Journalism. Writers can find more opportunities than ever to get articles published online. This lets you promote your music by simply providing your website address at the end of an article, while establishing you as an expert in your field and enhancing your reputation. Right now Pop Matters has an open call for feature essays on any aspect of pop culture, past or present. www.popmatters.com
IX. Functional Website. With so much “static” on the Web, small companies like www.bandspecial.com are a one-stop shop for everything from logos to pimping out your MySpace. At the D.I.Y. conference, I bumped into Emily Arin who has a brilliant idea of a subscription-based website that serves several purposes. For $12, subscribers receive a song monthly for a year. This not only pleases subscribers, it motivates Emily to maintain deadlines and builds her repertoire for live shows. Her subscriptions have exploded, and people enjoy the surprise of a new song at their home every month. www.emilyarin.com
X. New Opportunities. Be alert for a changing landscape, and be a pioneer. If a system is set up for format A and format B is coming, independent artists can take transitional risks, and if it actually works, they’re ahead of the game. I personally experienced this with my Studio Voodoo DVD-Audio release. Packaged in a “Super Jewel Case,” it was larger than a CD jewel case so retailers ended up putting it in its own special, uniquely visible section. Or, consider a company like TuneCore, which for a modest fee, will “broker” your music to multiple digital music retailers, with you keeping all the revenue. Models like this simply weren’t possible five years ago. www.tunecore.com
XI. Play Live. If you’re not an established artist who releases and sells new music regularly online, nobody knows you and you have to get known. Playing live is the litmus test of your true artistic caliber: If your talents inspire a passionate response, it’s infectious. Your music, message, and artistic viewpoint will spread “virally” (marketing techniques that use social networks through a self-replication process) on the Web, and fans will buy your products. Build a physical fan base, then build an online community.
XII. Stay Educated. Participate with related organizations, attend conventions and seminars, read trade magazines and publications like this one for relevant information; EQ magazine, Berklee, and others offer “webinars” and online classes. I also recommend the film 800 CDs by Chris Valenti. Wrapped around a seminar by music industry veteran Tim Sweeney, it’s an entertaining, insightful, and inspired perspective on how to sell those remaining 800 CDs of yours. The more informed you are, the better your potential of making a living in this new digital marketplace; check out Andrew Dubber’s The 20 Things You Must Know About Music Online. Best of all, it’s free! http://newmusicstrategies.com/ebook/
XIII. Innovation is the New Commodity. You’re probably creative in many ways, so utilize those talents to expand your artistic opportunities and do something that differentiates you. For example, my Studio Voodoo releases were created in 5.1 surround sound, and use that medium to maximum effect. Although there are also stereo mixes available, I’ve promoted the surround sound feature because it’s different. If you search for “surround sound” in CD Baby, four Studio Voodoo releases come up in the first seven titles.
LIGHT AT THE END OF THE TUNNEL
You’ve found the way, selling songs directly from your aggregate website. Your internet radio station broadcasts your music 24/7, and CDs, T-shirts, coffee cups, and mouse pads with your band’s branding are available for purchase. YouTube plays your videos, and you take advantage of social networking sites, mailing lists, and blogs, telling everyone about your next projects and gigs. You play live at bookstore chains, clubs, and festivals. Yes, you are the new digital Music Messiah. You can make a living with your craft in this new digital Mecca because when you sell 100 units of anything, it’s your profit. You now have the power to spread your words and music throughout the world.
Ultimately, though, remember it’s all for nothing without compelling music. Enduring songs with impassioned lyrics sung by stellar vocalists create a life of their own. It is you who must inspire your audience to actually spend their hard-earned money . . . on you!