14 Reasons Why Music Entrepreneurs Fail…

deflatedairplane

1. They think people care about music more than they do.

Some people eat, sleep, and breathe music, but most do not.  They aren’t spending hours compiling playlists, they aren’t exploring niche bands, they aren’t trying new recommendation algorithms; they listen to Katy Perry.

2. They think more people will actually pay for music.

Some people will, most won’t.  And the reason is that too much of it is available for free.

3. They think the major labels will be nice to them.

They won’t be nice to you.   They don’t want to help you.  They won’t be ‘rationale’ according to what you think that is.  They will make your business sucky, if they choose to deal with you at all.  And they’ll probably sue you if you blow them off and become successful.

4. They think music fans are unhappy.

People used to bitch about expensive CDs and repetitive radio.  What are they bitching about now, exactly?

5. They think people care about artists.

They don’t.  They care about listening to music from artists they like, not whether those artists can pay rent.

6. They think Amanda Palmer is reality.

She isn’t.  The company that really Kickstarted Amanda Palmer was Warner Music Group.  And yes, there are successful artists doing it on their own without a label or serious backer, there just aren’t that many of them.

7. They think they’re really helping artists.

You can’t help artists if your startup is dead, and nearly every music startup dies.

8. They’re trying to do too much and solve too many problems.

Playlists.net does Spotify playlists. Beatport does EDM downloads.  BigChampagne does music analytics.  Beats mastered headphones, then streaming.  All of them were acquired for a lot of money.

9. They think people care about music quality as much as they do.

Most people not only don’t care about music quality, they don’t even know there’s an issue.

10. They listen to what everyone else is saying.

They used to say that streaming would save the music industry and help artists.  They used to say the major labels would be dead.  They used to say that Facebook would be the new MySpace Music.  They used to say…

11. They think there’s more money in music than there is.

Spotify is losing a ton of money.  SoundCloud is losing a ton of money.  Pandora is losing a ton of money.  And YouTube wouldn’t be the biggest source of music in the world if they hadn’t been losing tons of money for years.

12. They are cocky and over-confident about complex problems.

Figuring out complex problems and making money off of that is electrifying for the entrepreneur.  But deciding to approach a problem with the same approach that has been used multiple times before is hubris.

13. They spend too much time at music conferences.

Music conferences are good in moderation.  But most are repetitive and eventually steal valuable time away from real work, real meetings, and real progress.

14.  They spend a lot of money on ridiculous offices in expensive cities.

Here’s Soundcloud’s office.  Here’s Spotify’s office.  Here’s Pandora’s office.  Any questions?

 

Image by _Kripptic, licensed under Creative Commons Attribution 2.0 Generic.

44 Responses

  1. Cmonbro

    First list I’ve liked… Obviously a bunch of these you can expand to all start-ups i.e. complexity

    Reply
  2. a few more...

    They Don’t Believe Artists Should Be Paid Fairly

    They Don’t Understand That The Cost of Music is in MAKING music, NOT Distributing Music

    They Don’t Ask Musicians and Artists what they actually want

    They Don’t Understand the difference between EXPLOITATION and INNOVATION

    Reply
  3. Chris H

    Paul, you confuse me.

    You write 5 articles I think are absolute shit and I complain, then you do one outstanding one where I go “well, he gets this”.

    The above is a compliment, the best I can offer. Good work.

    Reply
  4. Chicago Guy

    Now just waiting for the usual people to show up and say what is usually said on this forum. 🙂

    Reply
  5. Anonymous

    yeah once you get on their radar it’s like you’ve flown into enemy territory and you get constantly swarmed by Migs and anit-aircraft guns etc. etc.

    Reply
  6. davduf

    Good list.
    #1, 2, 3, 4, 5, 6 100% agree with
    #7 we’re definitely guilty of.
    #8 maybe we do.
    #9, 10, 11, 12 agree
    #13 yeah OK, guilty
    #14 is perfectly timed, we’re posting on our blog Thursday about our offices. In many fancy cities.

    David D,
    Bandzoogle (a 10 year old startup)

    Reply
  7. Noel Troy

    Great list.

    For me, the glaring one that’s missing is:

    ‘Artists now trust startups less than labels.
    The number of con-artists appears to exceed actual artists.
    Browse Twitter for musicians and you’ll find the racketeers are rife.
    Artists don’t know where to turn or whom to trust.
    In short, competition has skyrocketed, trust has tanked.”

    Reply
  8. @MusicBizGuy

    Two primary reasons why music business related sites fail:

    1. Licensing deals have never given any companies who rely on major label music catalogs a reasonable deal that will allow them to flourish.

    2. There is nothing in it for the user to become vested in the success of any particular site. To my knowledge with the possible exception of Bandcamp, Tunecore,and Itunes all of which rely on music and/or merchandise transactions, I am not aware of any really successful sites that are truly successful financially. Success can not be determined by the amount of funding secured or the amount some company stupidly paid for their exit.

    Reply
  9. Willis

    Shouldn’t this list be the reasons that investors in music ventures get suckered and lose their money?

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      Yeah, they’re definitely accomplices and often share similar issues. I guess they’re putting the gas in the tank, so ultimately they’re even more culpable.

      Reply
  10. Epic fail.

    This blog features so many failures. Where are the solutions, or at least, the ideas?

    Reply
    • Buddy Zappa

      The soution is very simple… yet musicians can’t seem to get it through their thick skulls….
      Simply STOP GIVING YOUR MUSIC AWAY FOR FREE!!!!
      Free kills any market… I don’t care what the product is.
      When you have a gazillion people flooding any given market with free products….
      You’ve just killed that market… I could do it with truck load of oranges at a flea market.
      How come nobody ever states this very simple solution?

      Reply
      • Versus

        Absolutely agree.

        Those who give music away for free, even if they can afford to (trust fund or day job or already successful artist), undercut music for everyone.

        That’s why the U2 stunt with the forced free album download was such a misguided move.
        I didn’t even listen to the album; if it had been for sale, I would have checked it out by now and maybe bought it. My immediate reaction: if it’s free, the creators must not think it’s worth anything.

        Reply
      • Chicago Guy

        “Stop giving your music away for free”.

        They do that because it is the only way they have even a small chance of their songs being listened to Buddy,

        The market is FLOODED. Totally flooded. MILLIONS of new songs appear each year to listen to, worldwide.

        Reply
  11. Kerry Rose

    Well crap, this kinda tanked my day. I am persevering and building an app to simply restore what was lost when Music came in a cool, albeit very flat, cardboard box. Hopefully monetizing a bit and growing the pie a smidgen for all. Thanks for stating the problems well, I would like to focus on the solution(s). I will build, launch and then take my lumps in the marketplace, hopefully re-building some trust…

    Reply
  12. chris H

    A large point (maybe the biggest) missed, is that music tech is still a business built on the MUSIC BUSINESS. As long as piracy weakens the system (whatever you think of said system), there can not be a healthy music business.

    Without a healthy music business, music tech cannot be financially healthy. No app designed to help the business will succeed if the customer base, the industry, can’t afford to buy said product. No app, no site, no “new distribution method”, no half ass patronage scheme is going to change that basic fact.

    Reply
  13. Michael M.

    Every point…spot on. Other than #14 this is also a good list for us musicians to consider in our own music promotion endeavors.

    Reply
  14. Decembers Fall

    Two things, first, are the major labels so evil? That’s how they’re made out, but I ask this, would Eminem be as successful as a McDonald’s employee, Citibank wouldn’t hire Marilyn Manson would they?
    Second, the biggest most viewed artists on all social media networks and websites are still the ones brought to you by The Big Four. No matter what the platform is, the sources seem to remain. The only people really losing out here are the underfunded hopefuls with more talent than money. History has shown that it’s always the artists that come from the worst most meager surroundings more often than not are the ones that become music legends. I couldn’t imagine a world where that kind of opportunity could be taken away from someone who already has the whole world is against them.

    Reply
  15. David Nyro

    My 2 cents, which like most music, is now free. Pretty much agree with it all. The fact is, most don’t want to pay for ANYTHING. If people could get their cars, legal help, medical care, clothing, food, computers, houses, etc. for free, they would. They’re only paying because they have no choice in most circumstances. They are being “forced” to pay. It’s not because they go “Oh, I can see that people with talent and skills who apprenticed, trained, and studied for years and years, made this.They also had to use all kinds of materials from various places. So it’s only right that I give them something for this.” Most do not think this way. We all want everything for free. We just can’t get everything for free. But music, we can. And getting there with movies, books, art, etc. Live music still has hope, if only because it happens in a confined space with limited access and people can make you pay to get in. Now, you might get SOME people to pay a little if you donate all or most of the proceeds to a worthy cause. Maybe. People are still supporting charities. Merchandise is another revenue stream, though that can be counterfeited. And here comes 3-D printing, so does this mean that someday, people will be able to make cars, furniture, etc., in their garages with their giant 3-D printers? Even make 3-D printers so they won’t have to buy that? Hmmm. Just like the Star Trek “replicators.” That’s a ways off. Now Reality: Just give your music away – unless you become the next Katy Perry. Accept it. That ship has sailed. Stay true to your musical vision – meaning, don’t become the next Katy Perry, unless that’s really you – and your fans and kindred spirits will find you and support your shows and merchandise. There are some people who really DO care about music. Concentrate on your own website. Upside: now that the revenue is going away, maybe the crazy competition will wane as many will think long and hard before pursuing music. It’s a powerful dream. But how many years, or even decades, can people be “starving artists?” Wish I could offer up other solutions, but there really aren’t any. Don’t even waste time writing grants, unless you’re doing something truly avant garde or esoteric. Maybe there’s money to be made in some other country, like Sugar Man? Good luck to us all!

    Reply
  16. Ali

    Nice article .

    Yet my failure experience taught me one thing that should be top of this list .

    ‘ They don’t keep a balance between being an artist and being an entrepreneur ‘

    It is very challenging to keep a balance with art in your life , but if you think you can , do start your own music project and secure an income to compensate for your wild art fancy existence .

    Reply
  17. Eric

    Also (from a successful, small-time music entrepreneur),
    1. They don’t keep putting integrity back in, when it (inevitably) goes out. Without integrity nothing works (for long).
    2. They follow their (or someone else’s) “good ideas,” or an amount of money, rather than following their hearts, or “your bliss,” as Joseph Campbell said. It really works, even if you call it “woo-woo.”
    3.They don’t value kindness and compassion sufficiently
    4. They act as if it’s okay to lie – a “little bit” sometimes (see #1)
    5. They don’t breathe deeply and slow down enough to see clearly what’s next (see #2)
    6. They’re not offering something truly unique that strikes listeners’ hearts.

    Reply
  18. Mike H

    Item (1) might have a sub-item : “Most listeners have not the skills or the capabilities to make musical choices on their own”. The vast majority of buyers within the preferred age segment have no identity of their own, a rising cultural phenomena – the music they listen too is a desperate grasp, as desperate as the need for a unique tattoo.
    An entrepreneurial startup does not have the budget to compete against a “Katy Perry” or any other artist that a major has been able to nudge past the critical mass. When the faceless collective finally likes it, whatever it is, then there becomes a good reason for the groping myopic individual to like it and maybe buy it.
    So, the problem with most of you that have commented here, is that the quality of your music or ability to judge music, (I don’t mean “quality of medium/recording” which is what you really meant in number #9, Paul), is probably mediocre and follows rutted genre trends that have been established. You and your artists get lost in the noise.

    There I said it: It’s because you suck at the core capability. Look in the mirror.

    -Michael-Michael-motor-cycle somewhere in NashVegas

    Reply
  19. Jack M

    Nice summation.

    Here’s where I think we all get steamed: Soundcloud, Spotify, and Pandora are losing money? So, according to public data, is Amazon.

    Perhaps all of these corporations are showing losses but Ek, Besos, et al. are cozy and fat. Shareholders and some within the companies are doing fine as well. The creators, the smaller vendors are not, not even close.

    Amazon forces me to charge $3.99 on top of my cd charge and takes 55% of the whole deal…and that’s a good deal these days. They don’t pay taxes and pay their warehouse people crap wages.

    I can make more from 1 cd sale than on over 10,000 streams, more on 1 iTunes track than 1000 streams.

    I still say, why should I give away my music to a streaming service? I’ll appeal to my core audience, sell smaller numbers, pad my income and not pay for Spotiy’s groovy new digs in Chelsea.

    Reply
  20. lf

    Why are we so fixated on making it big?

    It’s because there are no other options left (other than complete poverty). In the not too distant past, being a musician was a good job (especially if you were talented and well trained). You could support a family like a plumber, electrician, auto worker (uh oh), etc. Well, many of our middle class jobs are gone, never to return. Combine that with a new generation of Americans that have no memory of a middle class (or even of good music).

    In general, “Entrepreneurs LOSE MONEY. Opportunist MAKE MONEY. Sadly, that’s what we’re left with: a world of opportunists simply exploiting the animal instincts of humanity.

    Reply
  21. dICK jAMES b.

    THIS NEW SECRET LADIES AND GENTLEMAN IS, IGNORE THE INTERNET, and come up the old way. It still works! If you can’t be famous where you are, how can you be famous world wide web? The game has not changed – only our perception. Like a fool I ran to the net, and not to the Radio station around some corner near my house! 1. Go in yo mama’s basement and find a monet or a rembrandt! 2. Get it to the market place where they value Monets and Rembrandts! 3. Share the wealth! 4. Live long and Prosper!

    Reply
  22. danwriter

    “9. They think people care about music quality as much as they do.
    Most people not only don’t care about music quality, they don’t even know there’s an issue.”

    True, true. Unfortunately, there is a business being built on recitifying this “problem,” including dodgy interpolative products that promise to replace what data compression has taken out. Music quality being as subjective as music itself, people will talk themselves into believing that they actually work.

    Reply
  23. Russ Chapman

    PONO is looking good as a music biz startup ($3+ million from kickstarter). Seems to counter the argument that people don’t care about sound quality. Of course, time will tell.

    Reply
  24. Anonymous

    that’s keeping it pretty real!..sad but true…there used to be so much money in music that mobsters ran the show…i think they’ve all moved into politics now…making music and making money are largely mutually exclusive terms..but isn’t it just reflective of life in general?….1% or less make 99% of the money 🙂

    Reply
  25. Mike

    I think part of the issue nowadays is the non-musician audience knows us indie musicians can record at home and when we offer up our music recorded in our bedrooms – which may even be a built-for-recording room – that same audience already cheapens it in their mind because so much poorly recorded crap has been put forth by us indie musicians. We must better represent ourselves with our recordings! If you cannot do it well at home then go into a studio – your music is worth the cost. As a consumer would you rather buy a truck made by Ford or something your neighbor put together in his bedroom as best he could with the tools he has available?

    Reply
  26. Elizabeth

    I feel it’s all about Education & the Beauty of your Music…After reading this, it took all of the thrill away from following a dream…Well, fortunately there are those of us, who believe & respect our audiences & the Music we are creating! Instead of complaining, it’s worth working hard & creating Music that touches people…Keep the Faith…& keep following your dreams…

    Reply
  27. Versus

    “2. They think more people will actually pay for music.
    Some people will, most won’t. And the reason is that too much of it is available for free.”

    So let’s stop the free music.
    1. Really stop piracy. Serious and consistent penalties and fines.
    2. Musicians: only release your music via distribution channels which pay fairly.
    3. Musicians; stop giving your music away for free. You think it’s a shortcut to success, but it just reinforces the message that music is worthless.

    Reply
  28. Kung Fu Cowboy

    Kung Fu Cowboy here to save the day… I hope. I really play my instruments and sing my songs… I only write songs when I know I have something to say. As an artist, my overall intentions are enlighten as well as entertain. Maybe I can improve the music world and music audience. Let’s see. My band is American Zen and my label is Shaolin Records.

    Reply

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