Thursday, February 9, 2012

The Game is the Same - The Game Has Changed

The Game is the Same: Lock up distribution and collect the rent.

The Game has changed: scale changes everything.

I hear the hype - I see it on Facebook and Twitter  (who reads that anymore?) I get the comments and emails telling me how I "need to be on Spotify" or I don't exist. Telling me how good the iTunes deal is (80% of my sales!) compared to old major deals when the Apple is doing 2% of the work.

I'm not buying it... the contrarian in me is too strong.

I don't think we can build longevity on the lowest denominator. I know the Internet theoretically democratizes everything, but people still want tribes. This is neurological in origin - nature, not nurture. That's where longevity lies for music makers: the Lizard Brain.

A tribe has barriers of entry. Weed out the tourists.

But we're up against other forces right now: In the US, the "real" unemployement rate hovers around 20% nationally, and the racial breakdown of that statistic is both sobering and heartbreaking. The vast majority of rent-collecting is distributed to license owners of cultural back-catalog, not the new. This may not be a new phenomenon in itself, but now there's 100+ years of cultural history coming online - we're competing with our own aural memory for attention.

Don't even get me started on the logistics/economics of opening/running  venues. I used to hate venue owners so much (and in some ways, I still do), but I've recently had some eye-opening insight into the environment in which so many of these entities operate. My heart goes out - you really have to be dedicated to make anything work in this business right now.

I wish I could tell you I see a clear future, but I don't. Today, I don't see iTunes or Spotify paying anyone's middle-class mortgage1.

Then you tell me that's not the point: it's the *exposure* that counts. "It's a small price to pay" (RENT!) for the opportunity to be in front of so many people so quickly (give us your music for free and you too can be famous/rich.).

The game is the same. (lock up distribution and collect the rent.)

The game has changed. (put your music out for free and IF YOU'RE GOOD ENOUGH you can be famous/rich.)

Go find your flock.

1 I'm dying for data that contradicts this. If you or someone you know is paying a middle-class mortgage (or better) with iTunes/Spotify royalties, by all means, send an email or comment.

[Update #1 via FB: ]
"Live Music will, of course, always be the key. However, less and less people buy my physical CD at my shows because they would rather have it digital. I earn about .65 per iTunes .99 download. Considering that they are the 'agent' and own the largest music store in the world, that is not a bad return as compared to what I received on my physical CD through a retailer (after physical costs were summed in)

Without giving away a name, I have a very close friend (smooth jazz artist) who earns north of 100K per year just on music downloads and Streaming royalties. He plays live because he loves to. It's not his main source of income. He, like myself, is not a big fan of Spotify's model when it comes to the royalty payment, but it has become a necessary evil. More people are hearing our songs than ever before. When I look at my streaming royalties, the 'spins' are better than when I paid somebody to 'work' my record on radio. But, via a monetary royalty percentage, I earn much less. Remember the famous "Lady Gaga only earned $175 from 1 million plays on Spotify article." We are all in the same boat, and I think Gaga has way more pull than you and I.

IMHO: The key is offering premium product / services to your listener. Offer songs on Spotify et all, and then sell a special song or remix with limited art, or whatever on your site.
The worst decision I ever made in the business of music was becoming too full of myself, and I got lazy. I passed up opportunities because I didn't want to 'eat beans out of a can and ride in van.' As a result. I lost footing, blamed others, and ended up 12 years later finally resurrecting my music. How did I do it? With Pandora, Spotify, CDBaby, and iTunes. I am making more money now (from my music) than I did when I was 'working' my record with real dollars, and playing live every chance I got.
The 'access model' is the new 'eating beans out of a can, and living in a van' - maybe I went off thread a little bit, but I thought I would share real insight rather than pull up google stats or something that is not tangible until you actually live it…"
- Tony Windle
[Update #2 via email]
"Your assertions about tribal behaviors being rooted in neurology are only partially correct. While there is strong research to indicate correlations between neurological activity and stimuli that are thought to induce a tribal response, it's not causative. I get the "Lizard Brain" reference, but it's a little flimsy to build a business philosophy, IMHO. Then again, I'm not a musician!"
- anonymous sociologist
[Update #3]
"On my deal with Amazon and iTunes, I do make money on sales. If you're looking for the old industry model to make new industry money.. give up. Did we become musicians to get rich? I've signed major deals as an artist and I've never been rich. After the advances were gone (usually to pay debts) touring was the only way to generate income while hoping radio would pick up the record and make it a hit. And if you were so lucky to pay the label back their advances, their percentage split on profits was a lot worse than it is now with online retailers. Not much has changed for the artists. We are all hoping for one of our songs to hit. Except in the new industry, a hit can be measured by how many downloads it has, not how many live performances it's had. Make great music and good things will happen."
- Nathan Dale