2. April 2010 by admin.

I have a few barely-educated theories I would like to share with the class over the next few blog posts. I realize that I could be completely wrong, but based on the research I’ve done, the music industry is barreling steadily in the direction I am about to outline for you. Hopefully you will find these theories helpful. Hopefully you will go out and find your own theories.

Barely-Educated Theory #1:

I think that CDs are a dying breed, and the CD-focused Big Music industry is waning right along with them. I can get a CD’s worth of music on iTunes at half the price. Music publishers tout the fact that they can market music to the far corners of the music industry as well as maintain your copyrights. You can do both of those things with the internet. Music distributing companies base their prices on their ability to get your CD into major record stores across the country. Not only do you not need that anymore, you can do it with the internet. Record companies claim to support you and protect you, but you can pretty much support and protect yourself on the internet.

CDs comprised 65 percent of all music sold in the first half of 2009 compared to paid digital downloads, which comprised 35 percent of music sales. By comparison, paid digital music downloads comprised just 20 percent of sales in 2007 – growing to 30 percent of the music market last year.

- NPD Group Study, August 19th, 2009

For the full Zero Paid article on the new NPD Group Study, click here. For the very short PDF of the NPA Group Study, follow this link.

To me, this quote does not have statistics that discourage my hypothesis, despite the negative spin on the numbers. The music industry may not be rid of CDs, but its well on its way. 35% is nothing to shake a stick at. I think we’re heading to a new era where musicians, not huge corporate juggernauts, drive the music industry.

Audio4cast agrees with me:

…Labels should be working hard to drive traffic to their Internet radio partners, who should be emphasizing music download sales to their audience and realizing revenue from that as well. Creative collaboration is the path to sustained profitability in digital music’s future.

- Audio4cast, June 24th, 2009

MediaPost also agrees with me, though they take a gloomier and possibly more realistic approach:

While the digital boom sounds like good news, it presents a gloomy picture for the music industry. The Forrester study, titled “The End of Music as We Know It,” notes that new digital sales revenues won’t come close to replacing the lost CD revenues. From a high of $14.2 billion in 2000, total revenues will shrink to just $8.6 billion in 2012, if Forrester’s prediction holds.

- MediaDailyNews, February 20th, 2008

For more information on Forrester’s “The End of Music as We Know It”, click here (for further proof that wisdom is never free), or here (for some sweet charts).

MediaPost’s blog post, as well as everything I’ve read from Forrester’s study, tells me that there will be less money to go around, and I predict that it will not be taken from the musicians. I think that Big Music is going to bleed dry.

Times Online is even less optimistic:

The idea that niche markets were the key to the future for internet sellers was described as one of the most important economic models of the 21st century when it was spelt out by Chris Anderson in his book The Long Tail in 2006. He used data from an American online music retailer to predict that the internet economy would shift from a relatively small number of “hits” - mainstream products - at the head of the demand curve toward a “huge number of niches in the tail”.

However, a new study by Will Page, chief economist of the MCPS-PRS Alliance, the not-for-profit royalty collection society, suggests that the niche market is not an untapped goldmine and that online sales success still relies on big hits. They found that, for the online singles market, 80 per cent of all revenue came from around 52,000 tracks. For albums, the figures were even starker. Of the 1.23 million available, only 173,000 were ever bought, meaning 85 per cent did not sell a single copy all year.

- The Times, December 22nd, 2009

For the full article from the Times, here’s the link, and here’s a link to Chris Anderson’s blog (he’s on hiatus from his blog right now, but it’s a good place to get the gist of his theories).

I’ve said it before and I’ll say it again, despite the unhappy situation of Big Music, the internet is creating myriad possibilities for musicians and their dedicated representatives. Besides Myspace, sites like ReverbNation (which I swear by) offer (with Premium membership) online distribution, online press kit makers, information about your fans, 25MB of song storage, the “most powerful email marketing platform on Earth for musicians“, an extremely sleek and sexy website builder, the most advanced widgets on the planet, and a whole slew of amazing free features. This one flabbergasting site has sections on promotional tools, how-to’s on viral marketing (viral stunts, by the way, are damn near impossible to manufacture), statistics and tracking, ways to earn money, a whole block of the site dedicated to Venues, and a killer following. It is used by “over 500,000 artists, managers, record labels, and venues to grow their reach, influence, and business across the internet,” according to the About section on the ReverbNation site. Check out their About section for more information on ReverbNation.

Also, check out this helpful blog post, or this one, for more suggestions and information on online sources for musicians.

Call me an idealist, but I think I’m onto something here. As musicians and independent labels take their passion into their own hands, they see less and less of a need to allow a bullying middle man to get between them and their music. Soon to be gone are the convoluted licensing processes, and confusing, expensive distribution and publishing deals. Record labels are going to have to swallow their big budgets and swollen prides and start catering to the talent they claim to serve. Now begins the rise of the little guy, the niche markets and incredible hidden talents that the big record labels didn’t think would sell. The revolution is on the horizon. I hope you’re ready, because once it comes, we’re never going back.

Posted in MCPS-PRS Alliance, iTunes, mediadailynews, mediapost, music publisher, internet sellers, hits, digital music, digital boom, distributor, download sales, Forrester, niche markets, NPD Group Study, times online, theironics, widgets, Will Page, Zero Paid, The Long Tail, the end of the music industry as we know it, record companies, press kit, record company, royalty collection society, sustained profitability, creative collaboration, Chris Anderson, Earl Robbins, reveling session, Guerrilla Music Marketing, marketing, Marketing and PR, record label owner, music industry, independent label, Gainesville, lawful music sharing communities, mistakes and triumphs, casey robbins, music business, myspace, barely-educated theories, Audio4cast, Barely-Educated Theory, Big Music, blog, Web Marketing, Viral Marketing and Online Media to Reach Buyers Direct, promotions, Podcasting, Reverbnation, This Business of Music, twitter, Cardboard Box Records | No Comments »

2. April 2010 by admin.

There are thousands of books written about the music industry. There’s no shortage of books written by rock stars and groupies, sure, and those are interesting in their way, but the ones you as a budding indie record label are going to need are those emphasizing the business side of the music.

There are a few major types of books to look for:

Overall Music Industry – This is the sort that’s going to include a decent amount of information about everything to do with the music industry. My suggestions?

All You Need to Know About the Music Business (I have the 7^th edition) by Donald S. Passman

This Business of Music (I have the 10^th edition) by M. William Krasilovsky and Sidney Shemel, with contributions by John M. Gross and Jonathan Feinstein

Marketing and Promotions – Selling your business, its music, and its artists is a huge deal, so don’t skimp on this. I went outside the box for my promotions literature, but here are some handy guides for you:

This Business of Music Marketing and Promotion: A Practical Guide to Creating a Completely Integrated Marketing and E-Marketing Campaign (I have the revised and updated edition) by Tad Lathrop

The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly by David Meerman Scott

Guerrilla Music Marketing Handbook: 201 Self-Promotion Ideas for Songwriters, Musicians and Bands on a Budget (I have the revised and updated version) by Bob Baker

Guerrilla Music Marketing, Encore Edition: 201 More Self-promotion Ideas, Tips and Tactics for Do-it-yourself Artists by Bob Baker

Web Marketing for the Music Business by Thomas W. Hutchison

Record Label Marketing by Tom Hutchison, Amy Macy, and Paul Allen

Music Law – You’re not going anywhere without a firm grasp of music law. The music industry is full of nuances and intricacies, and I don’t want you to be caught by them. Hell, I don’t want to be caught by them either. So, the definitive guide to music law, at least in my opinion, and then the one stop shop for contracts are listed here:

Music Law: How to Run Your Band’s Business (I have the 6^th edition) by Attorney Rich Stim

Music Business Contract Library (Hal Leonard Music Pro Guides) by Greg

When I went hunting for books at my local book stores, I looked for latest editions of each type. You’re going to need to do this, because the music industry changes so much so quickly that even a latest edition may not even be able to keep up, let alone a copy that’s five years old.

Some other books to think about:

The Future of Music: Manifesto for the Digital Music Revolution by David Kusek and Gerd Leonhard  

Making Music Make Money: An Insider’s Guide to Becoming Your Own Music Publisher by Eric Beall

I think it is also a good idea to have a book on how to start a small business. These would pretty much round it out for you.

            The Law (In Plain English) for Small Business by Leonard D. DuBoff, Attorney at Law

The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael E. Gerber 

Now, that’s a library, but I’m not done yet. You should also go online and research marketing tools from social networking sites like Facebook, MySpace, Twitter, and ReverbNation. I will give a full list of useful music and general social networking sites later, but social networking is going to make your life a heck-of-a-lot easier because it’s pretty much free. And free, my friends, is good when you’re starting a business.

That’s something else to think about. Where are you getting the money to start your business? Do you have donors, investors, a loan, a rich daddy? You will never- never- make money if you don’t put money into it. That is very important. You cannot get something for nothing. It is as impossible as creating a teddy bear out of thin air.

Let’s start, however, with putting some knowledge in your head. Get some of those books and start reading. If you aren’t completely deterred by all of that, I’ll see you back here next time!

Posted in music business, Marketing and PR, music law, myspace, News Rules, marketing, M. William Krasilovsky, Guerrilla Music Marketing, Future of Music, Guerrilla Music Marketing Handbook, John M. Gross, Jonathan Feinstein, Podcasting, promotions, Thomas W. Hutchison, This Business of Music Marketing and Promotion: A Pract, twitter, Viral Marketing and Online Media to Reach Buyers Direct, Web Marketing, This Business of Music, The New Rules of Marketing and PR: How to Use News Rele, Reverbnation, promotions literature, Rich Stim, Sidney Shemel, Tad Lathrop, facebook, Earl Robbins, be a fan first, attitude and aptitude, business of music, casey robbins, fictitious name, Theironics LLC, mistakes and triumphs, Gainesville, Florida, independent label, indie labes, lawful music sharing communities, independent record label, indie label, David Meerman Scott, Bob Baker, Donald Passman, Donald S. Passman, E-Myth Revisited, Blogs, All You Need to Know About the Music Business, music industry, passion in the music industry, record label owner, reveling session, Cardboard Box Records | No Comments »

2. April 2010 by admin.

Begin with Passion.

There can be no doubt, no second’s hesitation in your love of music of all types, of people from all walks of life, and of talent even in the strangest places. You must have an eye, ear, and nose for good music, and a fearless desire to succeed. In our company we call that having attitude and aptitude. If you don’t feel willing and able to put in long hours and endure lots of stress, then I suggest you stay just a fan.

Not that business people in the music industry are not fans. Most people get into the business of music because they are fans, and they want to make a difference. The bigger people in the music industry get, the more distantly I see them speak of local, underground, or seriously underrated bands, as if they were fond memories instead of everyday realities. These business men and women are almost wistful in their descriptions of the days when they had no company car and no fame, when they used to make things by hand to use as promotional gimmicks and money was not a barrier or a driving force. It was about the music.

I think we as an industry have drifted away from the music as our focus. But the fans haven’t. That’s why it’s important to be a fan first and a business savvy record label owner second.

Next, find yourself a few people who are as obsessive about music as you, and invite them to start a label with you. It’s always good to have help. Stall while you try and figure out what it means to actually start a label, or tell them you have no idea how to go about doing it and try to figure it out as a group.

Let’s stay with that for a minute.  What does it mean to start a label? Besides being mushy and saying to start with passion, there has to be a finite starting point. You have the passion, you have the buddies to lean on, and now you need a name.

Here’s what I do, and maybe it will work for you. Look around the room you’re in and start naming objects aloud. If that room doesn’t work out, go to a different one. Go outside. Go to a park, restaurant, or back alley. Say whatever comes to your head. I’m telling you, it at least gets you thinking.

Once you have a couple of names in mind, and it’s good to have more than one because the one you want may be taken, go to your state’s “Department of State” website and look for the “Bureau of Corporations” or something similar to that. Then, wade through the murky bureaucracy on that site while you look for something called a “Fictitious Name Registry”. Some states require you to go down to city hall to register your name, and some allow you to register online. If you have to go to city hall, make sure you’re super organized and have everything you need before setting off to meet with The Man*. Like I said, bring a few alternatives in case your first choice in names for your label is taken.

Florida, my state, has the technology to apply for a fictitious name online, so we’ll use it as an example.  Go to www.sunbiz.org. One of the links across the top of the page will be “Document Searches”. Look in there for “Fictitious Names”, then in there for “Inquire by Fictitious Name”. Type the name you’d like in the search box, and ff is listed, then we’re back to the drawing board. If the list doesn’t have your name in it, however, then it’s available! Yay!

Go to “E-Filing Services” and look for “Fictitious Name Registration”. Follow those steps and pay The Man. I would spring for the Certificate of Status and the Certified Copy, but that’s just me. It is nice to have those around, just in case you’re audited. It’s also nice to get it in the mail and have a reveling session**.

Once you and only you have got your name, you’re on your way. Next up, study your ass off. It’s not as terrible as you’d think!

Until next time, this is Casey Robbins of Cardboard Box Records signing off!

 __________________________________________________________________________________

Terms:

 *The Man = Government

**Reveling Session = A period ranging from five minutes to several hours wherein one rejoices exuberantly, with much jumping around and good-natured gloating. Reveling Sessions are important because they allow one time to realize the scope and magnitude of the little accomplishments as well as the big ones, and to celebrate all the triumphs of a day.

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