Follow Us

DMN on Feedburner
Connect with:
divider image

Why the Music Industry Doesn’t Care About Selling Music Anymore…

 

The following guest post comes from Jeff Price, founder of both spinART and TuneCore.  His latest company, Audiam, has a mission to get artists paid for the use of their music on YouTube.   

 

In today’s new music industry of peer-to-peer file sharing, download stores, and on-demand streams, it’s hard enough for an artist to make money by selling their music.  So what happens when the world’s largest music distributors and stores carry all the songs in world but don’t need to sell any of them in order to make money?

The answer: revenue from the sale of music goes down for the artist, while simultaneously there is no negative financial impact on the new stores and distributors.

 

Interests are clearly misaligned.  Artists have been reduced to replaceable cogs in a teeming mass of other undifferentiated music creators used purely as a commodity to represent breadth of choice for the consumer.  In short, artists are used to financially fuel these new companies, but they are not reaping the same financial reward in return.

The old music industry may have had a lot wrong with it, but at least it was clear how everyone in the food chain — the artist, record label, music distributor and physical retail stores — could stay in business.  The music had to be created, recorded, manufactured, distributed into stores and… SOLD.

Not so in the new music industry.  Now it is only the artist who must sell their music in order to “stay in business”.  And artists are fending for themselves against a tidal wave in a sea of technology companies and venture capitalists.  All sectors of the music industry are no longer being run by people from the music industry.  This glaring misalignment does not bode well for the future of music.

Let’s start with the music stores.

 

Music Stores/Services

 

Unlike the physical music store of yesteryear that needed to sell the CDs and vinyl sitting on their shelves to make money, the digital music stores and services of today (Pandora, iTunes, Amazon, Spotify, and others) can make money without ever selling — or even streaming – all the music they ‘stock’.  In this digital age, amongst the new ways music is being utilized for profit, the sale or streaming of music is almost an afterthought.

Take iTunes, currently the obvious substitute for the traditional record store.  If Apple happens to make money from the sale of the music (which, some suggest they didn’t for many years ), all the better — but, the main purpose of iTunes is to make money for Apple by selling Apple products and gaining market share for its operating system.

Amazon is more or less in the same boat, using music as an enticement to motivate people to create Amazon accounts, buy other products that are not music (including their own Amazon Prime service), sell more Kindles, and gain market share.  This explains why it sells music for less than it pays for it.  Music acquires those customers for their other products and services.

And it’s not just Apple and Amazon. Take a look at Spotify and other interactive streaming services.  How is it possible that a company like Spotify, whose sole business model is to make money from the streaming of music, is not prioritizing makingmoney from the streaming of music?

 

The answer: Spotify doesn’t need to stream the music it carries, nor be profitable from those songs it does stream, in order for its investors and owners to reach their financial finish line of selling the company or taking it public to make billions.

 

To reach their goal Spotify believes they must have:

(1) a huge number of subscribers, a vast catalog of artists,

(2) a user experience that customers find pleasing, and

(3) ubiquity.  

Making money off the music, or having the music it carries being streamed is, at this time, an afterthought.  And when the inevitable financial exit for Spotify does come, the artists will make no money from it despite being at least half of the equation.  This may explain why the major labels, all of whom own a piece of Spotify, do not appear worried about Spotify’s royalty rates.

 

Their eye is focused on the true financial prize: owning a percentage of a company that gets bought for billions.

 

Just look at Pandora: its shareholders made a fortune when the company went public, despite it making little to no profit. It was able to IPO off the artists’ music despite the music not ever needing to be played, nor paying themusic creators a royalty they deem reasonable.

At the ‘music store,’ the point of economic intersection where art truly does meet commerce, the entity selling the music generates revenue without selling music or can lose money on the sale or stream of a song and still reap a profit while the artist makes little or nothing at all.

 

The interests of the artists and the music stores are no longer aligned.

 

Technology has provided a way for there to be little-to-no cost or risk to have music stored on hard drives always available to buy or stream.  The incentive for a store to sell music and make money from that sale is gone.  Instead, music is used to sell smartphones, tablets, computers, recurring monthly subscription fees, operating systems and to generate market share. Or it’s being used as a loss-leader in order to attract a buyer; making all the investors and shareholders rich while the songwriters, publishers, artists and music creators get little to nothing. The artist is a commodity being aggregated to provide the impression of breadth in a music catalog.

 

 

Certainly, no one is disputing the fact that artists have always been commoditized to a degree; that is, their music was a ‘product’ to be peddled, sold or used by others to make money.  From recording studios, to labels, to distributors, to press to radio, to retail — the artist was the necessary means to a variety of parties’ monetary ends. However, in today’s industry there is a profound lack of transparency of how and why the artist is being used to make money.

 

Distributors

 

Although life was not a bed of roses between the traditional labels, artists and distributors, they all had the same goal: get CDs onto the shelf of the physical retail store, get them sold and collect the money from the sale. Arguments were over how this money was split, not whether the music should be sold to make the money.

Not so for today’s digital music distributors — think CD Baby, IODA, InGrooves, TuneCore, ReverbNation etc.  There is little to no cost of failure if the music doesn’t sell. These companies do not have 500,000 square foot warehouses with 20-foot high ceilings loaded with shelves piled high with CDs waiting to be picked, packed and shipped out to retail stores. They don’t have regional staff located around the country walking into stores to promote the bands, releases and checking for inventory around tour dates. They front no money for in-store marketing programs or manufacturing.  They suffer little to nothing if the music does not sell beyond the one time cost of placing a digital file onto the hard drive of Apple, Amazon or Spotify.

This paradigm in and of itself is not the problem.  But add to it that many of the board members and management of these new companies are not from the world of the music industry; they are from the world of technology, banks, software, hedge funds, private equity or technology firms that have no background in the music industry.

Their goal is to get as high a financial return as quickly as possible by taking the company public or getting bought – both of which can be done without selling the ‘product’ they carry.  There is no reason or incentive to build an artist’s career or sell the music.

 

Why invest in an artist like Bruce Springsteen for almost three years before he hits if it doesn’t help make money now.

 

Even more disturbing, as stores don’t need to sell music to make money, the distributor should be the last line of defense.  But for the most part, the new music distributors are also being run by the same banks, software, hedge funds, private equity or technology firms that have no background in the music industry. The artist is stuck in the middle between two sides — the stores and the distributors — both of which make money without incentive or need to sell the artist’s music and neither has leadership with industry expertise or institutional memory.

 

The artist is now, essentially, dealing with a two-front war.

 

Perhaps this explains the bizarre behavior of distributors taking distribution fees from artists without providing real value.  As an example, they claim to control synchronization rights to recordings and compositions for licensing into TV shows, film, videos games, YouTube, Vevo, and Vimeo, and then charge artists a fee to use their own music in their own YouTube videos.

The smart investors understand the dilemma of short term return at the expense of  long term growth.  They make certain to bring the right management into the company to assure they are not short sighted and destroy a valuable sector, however, many do not.

 

Where exactly does this leave the artist?  As an interchangeable cog that has little-to-no long term value.

 

Companies generating revenue from music, while no longer needing to sell it to make money, combined with management of many of these companies being from outside the music industry is a lethal mix for artists.  One they may just not survive.

By the time the owners of these new companies ‘exit’ reaping billions of dollars, a sea of decimated artists may be left in their wake wondering what the hell happened.

And the inheritors and owners of this new industry might just find themselves wishing someone actually cared about the artist as without them, there is no long term growth or industry to ‘monetize’ for anyone.

 

Jeff Price.

@tunecorejeff

audiam.com

 

 

Images: ‘Fuck Music’ image taken from Horizonte Vertical, “Boom Fuck Music,” released in 2010.  Stairwell (from Santiago, Chile metro system) by Happy Flower, licensed under Creative Commons 2.0.

 

blue bar background graphic
Comments (62)
  1. Bandit

    Nice tirade.
    however, most people here know all of this already


    Reply
    1. hippydog

      ^ Ditto on what he said.


      Reply
  2. Michael Whalen

    Jeff –
    You know I am a fan of yours. But your article, however, feels like another (in a long line) of meditations wrestling with the “old” paradigm versus creating the new one. (Yes, streaming is officially “old” now) And it is hardly news that Spotify could essentially stop streaming music and keep it’s financial prospects in check (for a time). Is their business plan some type of genius or the worst kind of exploitation? You and I would agree that it’s exploitation. Yes, Pandora also lives in that snake pit.
    That said, you and I disagree on the state of distribution. I know that you started a wildly successful aggregator in Tune Core – but looking from the point of view of the consumer 2013/2014 – why am I buying anything?
    Frankly, what is needed is a BRAND NEW paradigm for how media is paid for and a new definition for what media is in the digital age. So, much has happened in the 10+ years since DMCA and the rest of the safe harbor nonsense – that our copyright laws are hopelessly outdated. Frankly, the Federal Government will have to break it’s decade-long silence and actually pass some new laws on what is and is NOT a copyright – with some new thoughts on how things get paid for. Given the current grid lock – this is very unlikely during the Obama administration.
    But today, I read through the text of the “Free Market Royalty Act” bill being put forth by Congressman Mel Watt. It is an elegant solution to many of the issues that musicians/performers have argued about for decades. It also starts to reshape Copyright Law. In just two days, this legislation has already kicked-up some dust with our industry – however, if we leave the “fair” payment of artists to the major corporations and Internet titans – artists will have to wait forever. It was a revolution when statutory mechanical payments were introduced because some rules had to be brought in to make sure there was something like fairness. It’s time for a new revolution. – m


    Reply
    1. Jeff Price

      Odd Michael, if I recall you are a member of a PRO and there is no compulsory license for public performance royalties
      Are you suggesting we eliminate all choiche for the artist and allow the government to walk into their homes, point a metaphorical gun at their heads and tell them they get no say in who gets to use their works and further, they dont get to negotiate any rates?
      Whose next? What about writers. Are you going to force themto have to license their books? How about film makers, will they be forced to have to license to Netflix?
      Shouldn’t creators have the right to say no or does YouTube have the right to any video ever recorded as the government forces the creator to have to give it to them?
      With all due respect, its BS that artists will need to “wait forever”. I was able to create a voluntary opt in solution for artists for distribution with TuneCore. Certainly if I can do it, others can do it.
      By removing complusory licensing it forces excelence – entities like Pandora have to prove their value to the artists and consumers and dont get to rest on mediocrity.
      Entities like Pandora could create an opt in solution for artists, they choose not to. Instead the lobby the US government to force artists to give them their recordings at a rate the artist is not allowed to negoriate. And now they are trying to get it lowered
      Does SESAC get to negotiate its own rate or are you going to force them through governmental legislation to have no say?
      Thats not a world I would choose to live in…
      Jeff


      Reply
      1. Visitor

        “Entities like Pandora could create an opt in solution for artists”
        All we want from Pandora is an opt out option.


        Reply
        1. Makell Bird

          hahaha good one… I did a little research and (as a distributor) decided NOT to distribute to Pandora. Nothing but headaches over there.

          Makell Bird
          CEO and Founder of ADED.US Music Distribution
          http://www.aded.us


          Reply
      2. Michael Whalen

        Jeff – In the name of full disclosure – we know each other and I consider you a friend. Secondly, I was in the room dozens of times while Audiam was being birthed and you and I agree on much. That said, however, you are naive if you think the Federal Government isn’t inviting themselves to this party. Our laws are broken and obsolete. And no, I do not trust the market to govern itself and to create “fairness” for creative people. I do not trust that even the PROs have my best interests in the face of their own demise. So, yes, I think the pendulum must swing back to some form of Government regulation and it’s time that the ground gets flattened for everyone.


        Reply
    2. About Free Market Royalty Act

      Looked on Billboard article, variety article and nyt article and none provide a link to the text of the bill.
      Do you have a link to the bill?
      Thanks


      Reply
  3. Steven Corn (BFM)

    This is the first posting by Jeff that I feel is right on. The music industry used to offer t-shirts, merch and other items as a loss leader to support music sales. Now it seems that recorded music is the loss leader for selling other items. The ability to sustain a music career by selling your music is practically impossible today. Now, an artist has to look to what was once referred to as “ancilliary” revenue sources as their primary income streams.
    That said, it is too early to eschew recorded media sales just yet. There is still a lot of money out there for music sales. But it is safe to say that music sales has moved from being the whole pie to merely a slice of the pie. The successful artist no longer looks solely to Spotify, iTunes or Amazon as their primary revenue stream. Youtube, synch placements, merch, gigs, etc. are all equally – and sometimes more – important to the career arc of an artist.
    However, artistst have always been a means to an end for large companies that make millions on their backs. Fortunately, we live in a world where it’s possible for artists to claim a greater share of all types of revenue if they work hard and assume more responsibility for their own success instead of abrogating the path of success to some loftly label or A&R exec.


    Reply
  4. knob twiddler

    Jeff Price, please crawl back on your hole.
    Paul, why do you enable this delusional, self-serving A-hole?


    Reply
    1. What he said

      As an Independent musician struggling to make sense of a music industry that’s hard enough to navigate without the baseless, self-serving bullshit spewing constantly out of your mouth, I say “Jeff, kindly fuck off”. You’re not making musicians’ work any easier as you claim. You’re lining your pockets with Our money, while waving a false flag of “triumph over a cruel industry in the name of the blue-collar musician”.


      Reply
  5. Visitor

    Now who was that other guy who set up a company that made money off artists even if they did not sell squat?


    Reply
  6. This is Why RouteNote is Diffe

    This is exactly why RouteNote is in the market. RouteNote is run by artists for artists. We dont have technology firms, bankers, hedge funds running our company.

    Plus, we make money when the artist makes money. We are the only company to offer a completely Free service for the artists and we take a very small slice of the royalties. So if our artists make money then we make money.
    Additionally, we have a Premium model (similar to Tunecore), which provides artists the ability to move between the Free and Premium model whenever they want! This allows them to maximise their earnings.


    Reply
    1. Not true

      AWAL have been providing a ‘no fee’ distribution service for years. Founded by an early iTunes consultant too.
      http://awal.com/

      *N.B: I have no personal affiliation with AWAL. Just admire the service they provide.


      Reply
    2. Nova

      Routenote is no good. They are copyright trolls. If you sign up your music with them, they will only damage your reputation. I’ve had a couple false DMCA claims from Routenote claiming to own the sound of random background static on one of my videos.


      Reply
  7. Arthur

    The problem with this is that it seeks to put a value on musicians that never existed. Musicians have only ever been a vehicle for businessmen to make money, but it happened that for awhile they were kind of overpaid in the process. Things are now more realistic, this isn’t bad, and really the set up is the same with just a smaller cut going to the artist. People have to stop crying over this. Most bands never make it big. They spend their time in a van hand-to-mouthing it across the country. That’s how they build a fan base and make money. The fact that they can engage more people faster via spotify and rdio, and torch music works to their benefit in getting their names out. If musicians have a problem with the way things are they should make themselves new contracts and be more savvy about it, but there’s no reason to blame technology for something it didn’t do.


    Reply
    1. GGG

      You just don’t get it, man. Before Napster came along anyone that wanted to play in a band got signed to a major label and sold a million records and made ten million dollars! There was no failure whatsoever!


      Reply
      1. same old

        that same old ‘witty’ argument.
        no one is saying it wasn’t as, or more difficult previously.
        what’s being said is, in the current paradigm, does the artist have a right to say how is music gets acquired? (free/not free.)

        at this point you say “the reality is…”
        and i say times change; have google block pirate sites. have IP block heavy traffikers in files… or charge them a royalty rate. issue digital “tickets” (at a reasonable price, say 3x illegal dload cost) to end users… have youtube , pandora, etc give reasonable royalty rates (and tie executive pay to company performace so that money doesn’t all go to the top)
        etc etc


        Reply
        1. GGG

          I have seen and heard probably thousands of people at this point on here and elsewhere say it’s harder to make it now. In some senses that’s probably true and in many, many others it’s not remotely true. Say what you will about Tunecore, the fact that it and CD Baby even exist is MONUMENTAL for self-distribution, for example. Now every asshole with garageband can put their shit on the same platforms as every major label superstar. That never happened with CD placement, couldn’t even get it in the store, let alone good placement. There are levels of potential reach and avenues of revenue that weren’t around even 10 years ago.
          Look, I understand there there are royalty issues, and I am all for some of the things you say (especially digital tickets) but I feel like people bitch about their failures before they even have a leg of success to stand on. Every time some person with 800 facebook fans says they can’t make money because this or that, I want to scream. You have 500 fans, even if they all bought your shitty record twice you still couldn’t live. Do some work. Build fans. Find ways to get people to care about you and be willing to buy your stuff. Too many people want to make a record and sit on the income for 2 years. I’d love to do that, but unfortunately it’s not gonna happen unless you’re Adele.


          Reply
          1. Marmuro

            Putting your bitterness aside, you are absolutely right GGG.


            Reply
  8. mdti

    here is something i read today, very nice, but I wonder if it is related, ie “do they sell music”or something else ?

    http://www.sineadoconnor.com/2013/10/open-letter-to-miley-cyrus/
    would love to read miley cirus reply… and i have nothing against her personnally, she’s young that’s all, but it could all be “just” marketing and promotion.

    in a way, having to appear buttnacked at the request of your Art Director, might show that they still need to “sell music” (or more exactly, “sell the artist by way of selling mp3″ ?


    Reply
    1. mdti

      “buttnacked” — please read “butt naked” ;-)


      Reply
      1. or

        …or buttknackered, cuz she probably is. (as are all musicians, seeing as that’s where we’ve been gettin it)


        Reply
  9. Bruce Warila

    I hope nobody reads this and decides to give up on a music career. However uninspriring this post is, what Jeff says above is mostly correct.
    So what? If only to get a few kisses and some kind applause, I would glady have my children invest in becoming dedicated musicians.
    Music is a great plaform. Invest in it. The rewards will find you.


    Reply
  10. Tune Hunter

    Music will not sale until we switch the business model!

    Current model is worse than prostitution industry, we are the state of gang rape done by streamers and YouTube and few others which is propelled by music ID and music suggest services.

    If Wal-Mart would start to practice this business model, we would see all the goods on the parking lot outside of the store.
    Yes, they would still have some volunteers, Shazam boy would help find any wish you might have and as he packs the goods you would be exposed to Capital One Visa on his T shirt.
    Then as you exit with load of free goods you would be exposed to mega blimp above the parking lot with ad of Kentucky Fry on one side and McDonald ad on the other side.

    Harvard Business School should take Music Industry case and show Wal-Mart and other merchants how to switch to ad supported Eldorado!

    Again and again, music is one of the best products for internet monetization, no shipping, no inventory just cash, cash and cash in exchange for some pleasure.

    To put music back inside of the “Wal-Mart” walls we have to convert all
    (I mean all) music ID and music suggest services to new retail outlets.
    RIAA, labels and congressman Melvin L. Watt should stop current efforts to legally extort cash from Radio.
    Lobby efforts should go to prevent music ID and music suggest guys from plundering the Music House.
    If we do that we will enter the era of Discovery Moment Monetization. From that point on radio can convert itself in to the giant music store and pay musicians actual price for what was sold.

    We have to stop this daylight rape.
    As we are Shazam Pimp grabs the girl on the radio or in the bar and delivers for free to Spotify or YouTube rape arena. Need more pleasure or more variety?
    Just call similar tune suggest Pimp and the party will go on and on and on until you Shazam next tune.


    Reply
    1. GGG

      I have a response to this but you have to pay me 39 cents to read it. I accept PayPal, Tune Hunter. Will you pay?


      Reply
      1. Tune Hunter

        If you can improve my plan I will Paypal $39.
        If your comment is neutralized by logical rebuff I owe you nothing.
        As a musician you should be the best advocate of my “crazy” and primitive and buletproof proposal. It allows for no subscription streaming!


        Reply
        1. AnAmusedGeek

          I agree ‘ad supported’ biz models are a joke – regardless of industry, there’s just not enough money for everyone. And online advertising isn’t expanding as fast as the number of people that want a piece of it.

          ‘Long Tail’ is a joke too – you might make some money on it, but not enough to live on. I mean – when was that last time you listened to ‘gungam style’ ?
          So that means you need a fair price up front – something MUCH higher then advertising can support…
          I am curious though – why continue to give radio a break? if shazaam/youtube/whatever is going to be your ‘discovery tool’ – why not have radio pay a share as well ?


          Reply
          1. mdti

            Long Tail is not a joke if you own it entirely.
            As a seller, your n°1 product can sell 1 million, while all the other little stuff amount to a number than be superior to 1 million. it can be a substantial part of the revenue.
            Long tail is not relevant if you don’t own it entirely, because it is a lot of entities who will live only on the revenue of each little thing seperately.
            What, in the first example, counts for may be as much as the number one product, is in fact pennies if each little product is owned by 1 owner who can only get those pennies.
            this does not apply to the music industry, because it is almost impossible that 1 person owns everything.
            In the case of youtube, or other broadcasters, it may be relevant though.

            in my biz, which is not music, but sale of specific good, the “long tail” can counts for 40% of the overall revenue. It is not something that is “a joke”. it pays the taxes and the extras ;-)


            Reply
            1. AnAmusedGeek

              “As a seller, your n°1 product can sell 1 million, while all the other little stuff amount to a number than be superior to 1 million. it can be a substantial part of the revenue.”
              I agree – in certain industries. The classic example is printer ink…
              But for ‘the internet’, the long tail has been pushed at everyone from shareware authors, to bloggers, to photographers, and now musicians. And it just never seems to work… Most ‘content’ seems to have a ‘shelf life’ – people look/listen/whatever when its new and fresh, and then basically never go back to it. Music actually has a special term for things people go back to: ‘classics’, which shows how rare it is.
              I’m rather curious now where ‘long tail’ would account for 40%. Since you don’t mention the industry, I won’t ask.
              But I will ask: is there something special you do to push ‘long tail’ revenue that high ? If so, could it be applied/adapted to music ?


              Reply
              1. mdti

                You can imagine a shop with a few goods that are expensive (jewels, expensive fabrics etc), and an awful lot of little shi*s that are cheap (post cards, pens, key rings). And all the goods in the shop are made by the same manufacturer (that’s the main point).
                so let’s say you sell 100 expensive stuff, while the little stuff sell for 1 or 2 units each, but as you have dozens of them, you sold 1000 of them. at the end of the day your revenue is 60% from the expensive stuff and 40% of the little things.

                this could be a shop that’s sells, let’s say, 3D connected TVs (expensive) and music CD (cheap).
                it would take 1000 CD to amount the same as 1 or 2 TVs.
                As you make and distribute all of them, what counts is the final revenue at the end ofthe month.
                my biz is about stuff made with…. paper ;-)


                Reply
                1. AnAmusedGeek

                  “my biz is about stuff made with…. paper ;-)”
                  *Dun Dun DUUUUNNN* the mystery deepens :-)

                  As for music, I’m not sure how you can ‘stack’ the long tail to try and increase revenue… Is it possible to write a ‘classic’ at will? I would have guessed the audience is too hard to predict, but I seem to recall the term ‘instant classic’ ?


                  Reply
                2. mdti

                  hehe,
                  unfortunately, it is not about printing banknotes…. sigh


                  Reply
                  1. AnAmusedGeek

                    LOL


                    Reply
            2. hippydog

              Thing is, in the retail industry, the “long tail” is marked up (usually) higher then the big ticket items..
              so I agree in that aspect.. the long tail can easily make a business more money then the main items.. Thats a simple fact (asyone involved in retail knows it)..
              BUT!
              that doesnt translate to the music business, where EVERYTHING seems to be flatlined when it comes to pricing..
              IE: Song that was a hit 15 years ago? $1.00 , song thats currently in the top 10? $1.00 , song just came out from an indie band no one knows.. $1.00
              and thats the legal version of the market.. in the real universe.. the first two songs are free and the third you have to hunt down and pay for..
              Hows that for messed up?


              Reply
              1. Tune Hunter

                Artist should be able to decide what he wants for the tune as he posts it on YouTube. After 50k of free (ad suppppppported) streams the merchandise must be alive! …and the artist can log in at NAY TIME an change the price.
                YouTube for money and DIscovery Moment Monetization are only hope for Music Industry.
                Established musicians with gravity have to start bang at the label’s and RIAA doors.
                Matters went to far – we do not need Spoofy or THE Tube in current business mode, they deliver NOTHING to you, the creators …and, WORSE, they do not deliver much for themself.
                LADY GAGA please help and generate the survival NOISSSSE!


                Reply
                1. hippydog

                  QUOTE “Artist should be able to decide what he wants for the tune as he posts it on YouTube.”
                  I still think you sound like a crazy person.. but that part of your post I agree with..
                  I truly believe one of the problems with our industry is music has been flatlined when it comes to pricing.. It made sense 20 years ago LP’s and CD’s were all around the same price until they went into the discount bin.. but today? whats wrong with teired pricing like others do?
                  it would allow artists to pick how much they want to sell their stuff for, and to who..


                  Reply
  11. JTV Digital

    Hi Jeff,

    Don’t have much time to elaborate on that one but, well, 80% of what you are saying is correct with 2 exceptions maybe:

    Apple people do care about music, probably much more than the majority of label’s executives who consider artists as financial assets mainly.

    I also not quite agree with the paragraph about Distributors.

    Not all distributors are like those you describe here.

    Have you ever considered that running a digital distribution company is also the opportunity of discovering talents and helping artist with their promotion and marketing, for making sure they get the appropriate exposure and do not stay one amongst others in the sea of small indie artists eagerly trying to break into the music scene?

    As an example this month only we have pushed Wiyaala, the rising star from Ghana, on the international digital market; we support Christine Ben-Ameh with her new song and videos, and Adjoa Skinner just joined us for getting the appropriate back-up when it comes to her digital content and promotion; and we have dozens of great artists and releases in the pipe!

    Sorry for sounding a bit naive maybe, but it does matter if the music does not sell or does not get heard (on Spotify, yes!).

    It would just make everything done here pointless…

    Kind regards,

    Jeremie


    Reply
  12. serious business

    Charles Ives.
    If you’re doing it for money, you’re doing it wrong.


    Reply
  13. Makell Bird

    Jeff Price, I agree with a lot of the points you’ve made here. People (like us) can see through the fog and we know there is something rotten planned at the core of these “music businesses”. The fact that Spotify is actually owned by major labels scares me. It (along with other streaming models) seems like a way to get money while not paying the artists squat. But, at the same time, it allows UNKNOWN artists to get visibility in a way they normally couldn’t on their own.

    But at the same time, this article and it’s tone make it sound like you are pointing a dirty finger at the very businesses you created (TuneCore). When you talk about the distributors getting an up front fee and they could clearly care less whether the music sells or not, you are CLEARLY talking about businesses like TuneCore.

    I also don’t agree with your stance on Amazon. Amazon selling mp3s is CLEARLY them trying to gain market share against Apple on that front. Amazon even sells their music cheaper than iTunes. But you say they’re only doing it to draw attention to their other products. I don’t think that’s the MAIN reason they built an a-la-carte music selling platform, I just think it’s a bonus for them.

    On a personal note, why are you even in the music business any more? I’m not taking jabs at you. I’m just curious because if I were you… and I ALREADY made millions of dollars in the music business… then I would just retire and enjoy the rest of my life. Hell, if someone bought out ADED.US Music Distribution for $6 million I would gladly hand over the keys and just spend the rest of my life on a permanent vacation… like Derek Sivers (founder of Cd Baby)

    Makell Bird
    CEO and Founder of ADED.US Music Distribution
    http://www.aded.us


    Reply
  14. OhGee Mack

    Great article. This is why a lot of artist are running around like a chicken with their head cut off. The “starving artist” have become the music business. Everyone is setting up shop to eat off of the “starving artist”. Distributors, videos directors, studios, producers, pr, blogs etc… They are all selling to the “starving artist”.


    Reply
  15. Steven Cravis

    Partially related: I just added a Spotify follow button to my site StevenCravis.com I bet many of you didn’t know that could be done now! Heh heh heh. Artists need to stay on top of technologies and how to use them as much as possible these days.


    Reply
    1. GGG

      Just out of curiosity since it looks like you’ve been putting music out for quite a while and have an ok sized fanbase, have you seen Spotify eating in your sales?


      Reply
  16. Visitor

    Be wary of a person who never has anything good to say about anyone but themselves.


    Reply
  17. Big Swifty

    Hasn’t the music industry always been about marketing?
    The product really isn’t that important


    Reply
  18. Mike Corcoran

    Hi Jeff,

    Thanks for the post. I’ve read it a few times…and have some questions for you, if you’re still hanging around..

    You mentioned the main reason Apple and Amazon don’t care about selling music: They don’t have to, they make more money using music to sell other, more profitable products. Very true.

    But isn’t this a good thing, that music retailers’ survival is not dependent on the fickle tastes of the music market? Yes, Amazon sells music as a loss leader. Samsung and Apple use music to run promo specials for their phones that move huge units in a week. But this doesn’t hurt the artist, whom they all still pay full wholesale freight (as far as i know). Seems to me it’s better to have financially strong retailers that can cut their prices to boost sales, rather than weak ones that delay payments for months, or return merchandise for full refunds.

    It’s not as though Apple and Amazon are hiding their music in the back of the store where no one can find it (because they don’t care). That’s the beauty of cyber-shelves. You can stack and stack and never push anyone off the shelf. All artists still have a shot, whether these companies care or not.

    And what if Apple and Amazon did “care”, what could they do differently? Let’s say Apple and Amazon were dependent on profits from the sale of music to survive. Wouldn’t they just resort to promoting hits? This wouldn’t benefit the majority of artists in any meaningful way. How about raising the price, would that boost sales? I doubt it would sell more units, and even if somehow it did, they definitely wouldn’t share more of it with the creators. So, again, I don’t see how making Amazon or Apple care about selling more music is going to benefit the “cogs” of the music industry.

    Finally, (not a question, just a comment) the idea that Spotify and Pandora don’t “need” to stream a single song, because their endgame is to go public and make their investors billions (Pandora already did), is not a sound argument. Firstly, if either stopped streaming, it’s more than probable the same investors who value so highly these companies’ prospects would not continue to do so. Secondly, the stock market has always been about the current view of future expectations. At this point in time, most people believe that Spotify and Pandora (as evident by their valuations) are going to hang around and become viable companies. Of course, this may never come to pass. But to say it was always the inventor’s plan to pull the wool over everyone’s eyes is nonsense. It would be much harder to do that than it would to just start a viable company.

    Mike Corcoran
    CEO, MusicSUBMIT


    Reply
    1. jeff price

      Hi Mike
      My thoughts to your reply
      In regards to Spotify and Pandora, the problem is there is no concern for the long term growth of the sector. The focus is on the short term gain – get an “exit” to benefit the investors and shareholders at all expense (including that of the musician). They make out quite well, the artists get nothing.
      As a matter of fact, they are incentivized to pay less and less for music.
      Post exit, look at Pandora. Instead of working to the benefit of the industry, they are lobying congress to force artsits to have to give them their music at a rate the government sets and enforces. And now they are trying to drive it lower and lower.
      In regards to Apple, Amazon etc using music as a means to an end – this could be OK if at least the distributors were working to protect the artist. But, at the moment, both sides of the supply chain have no incentive to sell music or care about the long term health of the industry
      This leaves the artist a bit screwed.
      Jeff


      Reply
  19. lame

    that type of thinking is what got the music industry where it is today. sorry but it’s pathetic.


    Reply
  20. Lee

    The end of the music industry as we used to know it.
    Those of us who grewup in the 50s thru early- mid 80s can remember the joy of going to the neighborhood record store for a bit of a buying spree. Always on the lookout for a new gem to race home for a listen and then add to our collection.
    Sad to say that those days are long gone. On their way to the dustbins of time, along with the thick 78 RPM records, Victrolas, cassette and 8 track tapes and other outdated media formats.
    But, that’s what memories are made of. On the bright side, technology has been a Godsend for the music collector. But then again, that too is slowly changing.
    Makes you wonder if technology was such a good thing after all.


    Reply
    1. mdti

      >>
      Those of us who grewup in the 50s thru early- mid 80s can remember the joy of going to the neighborhood record store for a bit of a buying spree. Always on the lookout for a new gem to race home for a listen and then add to our collection.
      >>
      That was the golden age :-)
      it ended with the CD.


      Reply
  21. Toronto songwriter

    Hi, just saw this link from a Songwriters Association of Canada newsletter.
    I agree with most of the points. The digitization of music has caused conflict with music sales, but look on the bright side:

    1) It’s cheaper to make music (I’m praying that hydro rates doesn’t increase again )

    2) Website hosting is cheap. You literally own your own music, you are your own boss, and you set the pace of your music without any obligations from a man/woman in a corporate outfit.

    3) You can distribute music, store music cheaply.

    4) No need for a major label gatekeeper to fund your next album.

    Downsides of the current state of music:

    1) The music on the internet is a popularity contest, with preference given to popular artists as being credible.
    2) Online trolls with dubious motives purposely “disliking” your videos on Youtube or they make incidendary comments which are sometimes offensive.

    3) Social media dilemma ( see 1 and 2)

    4) Cost of booking music concerts are skyrocketing, and so is gas prices and house prices.

    BUT….use the internet to promote your music, allow ratings for only those who buy your music and find a good PR online..and everything will be okay once the music you have has hit potential.

    Greetings from Canada.


    Reply
  22. dominio harvey

    All valid points, but it retreads the same old ground with nothing to add about changing the sitution. I would actually extrapolate your points to a larger problem with contemporary American business mentality, especially in the tech world.
    Building and growing a business today isn’t measured by number of units sold or net sales, it’s based on questionable valuations designed to boost IPOs and buyouts. The death of the music industry started when music companies became parts of conglmerates beholden to shareholders. The perfect example is the recent tirade by that hedge fund manager who wanted Sony to sell off its entertainment properties. Why? because it would boost short term shareholder value over long term health of the company. Similar examples can be seen across today’s start up world. It is the Bain philospophy of American business, VC’s and management consultants pushing companys to pump and run.
    The music industry will always be there, but it will never be like what it was when the Sony’s, Bertlesman’s and Seagram’s of the world bought out music labels. It won’t grow or innovate until organizations like BMI, ASCAP and RIAA stop lobbying for legislation that only protects their 20th century business models.


    Reply
    1. William

      Dominio Harvey,

      I completely agree on this one. I offer a very crude model, but at any rate a solution brainstorm in my Dec. 12, 2013 post at the bottom and my reply to Randall that is the post directly under your post.

      Cheers,
      William


      Reply
  23. Randall

    I’ve performed as a musician with major and indie label artists in the past 5 years. It has been my full time occupation, but now the only way I guarantee paying the bills is to have a day job. it’s common for a band to do well and still have a 9-5. Personally I think you make better creative decisions when you don’t rely on music for money


    Reply
    1. William

      Randall,

      I agree with you about the relying on music for money and creative decisions. However, I’ll say this. Leonardo Da Vinci had the time all day to create and focus, including Thomas Edison. My general question to all is, can you create your best work when your time is divided so greatly? I would say Yes and No, but would love to hear what others have to say.

      My point:
      If you make $40K a year doing your day job 9a to 5p. Would you still do music to earn the same amount of money with only incremental inflation increases in earnings, like most jobs? In turn to really increase your earnings you’d have to make more music or do more shows proportionally, etc. Would you still do it?

      I hope you would say YES! Then my answer to you is it can be done, if your music/art/product is good enough and people really want to listen/see/hear you. It’s really possible, but their isn’t going to be this Justin Bieber (how do you spell his name?) MTV music awards, tons of money and girls everywhere thing going on. It’s going to be modest and fulfilling. The scary thing is more people want the former, and not the later, and they think or believe they are not successful unless they have that.

      A bit more explanation, but on a slightly different, but relevant subject is posted below that I wrote on Dec. 12, 2013.

      Cheers,
      William


      Reply
  24. Hermine

    Show recommendations are based on artists users ‘like’ on Facebook, actions they take in the calendar, affinity artists, and
    artists they’re listening to on Spotify. Just to whet your appetitie for that search
    session, then, this post is a quick intro to the
    field. Value Concessions for Fans ‘ All types of value priced beverages will be offered.
    Listen to how the orchestra paints a glowing light that gets
    brighter as the song progresses and Juliette (who isn’t on stage, but whose reactions are presented in the orchestra) approaches the ledge to
    comply with her lover’s wishes. The answer:
    Moms With Apps ( and yes, they have an app.

    Here is my web site spotify premium code generator, youtube.com,


    Reply
  25. William

    A solution:

    Artist need to learn or form teams of business. Create music on a cheaper level for their markets and work to reach those markets. The idea of get famous and rich quickly needs to fade away, just like the industry has faded away.

    The simplest example being the farmers in a community. If one (farmer) grows corn, the other potatoes, tomatoes, onions, peas, etc. If they all do well as farmers, they can share their crops and all have stew.

    The music industry in order to survive has to be the same. If an artist can build the proper team around them, like an agent, manager, PR person, web developer, social media person, e-commerce developer, graphic artist, and work together as a company or community, everyone can make a living and get music to the people who want to hear it and pay for it, as well as those that want to go and see/hear it live. That can work, but it’s just that, work! And perhaps no one will become millionaires. It might take years of part time work and then even if they can all work full time on the project they might only make middle class salaries unless people truly do love the music.

    It’s the same for the film industry. We are right behind all of you music industry people. I’ve only skipped rocks over this topic, and it’s all easier said then done.

    Cheers,
    William


    Reply
  26. Anonymous

    First of all your approach is pseudo, the industry is failing because of the so call executive branches. They don’t understand that you can’t fool the public. We already know what good music is, you may not we do, but they better start making quality music. Yes there are still great musicians and songs being made. they just have to get off there asses find them. As far their standard contracts everyone hip to them,you can go on the internet and find them. Any person with common sense (who can comprehends business law ) ain’t signing that shit. That’s why the music sounds so bad, the people making it can’t play instruments,read or write music, they use machines to modify there voice. The public knows what a quality piece work is, free music has been given out since they started the industry. Grand Theft Auto sold 60,000,000 copies, matter of fact everyone in all other parts of the entertainment industry are doing well. This false evaluation means people like you are still going to try marketing music to children. Great idea except children don’t have an income. Adults do, this all happen when some genius thought Britney Spears was better than Michael Jackson. Real good marketing technique,I wonder what they will think of next.


    Reply
  27. Pingback: Over 30 Really Bad Things In The Indie Film Biz 2013 | Truly Free Film

  28. The Dragon

    Now children,
    Get off your internets and go out and get real jobs that contribute to society.
    The sooner you realize that you are not special and no one wants to see/hear what you have to say, they sooner you can get on with your life and start living.
    Get over yourself, grow up, and get a job.

    From a historical perspective:
    Music was never meant to be a commercial trade.
    The essence of music is communal and emotive.
    Music is supposed to communicative, meditative, and inclusive.
    Music is NOT about you being special and getting on stage under the lights so everybody can give you attention.
    You are just an attention seeking person and want to validated.
    If you were a musician, you either worked in a church (clergy) or for a royal (court musician).
    For hundreds of years, the sole purpose of music was to glorify God.
    No one wants to listen to your pathetic rap song glorifying how great you think you are.


    Reply
  29. Pingback: Why the Music Industry Doesn't Care About Selli...

Leave a Reply

Connect with:


9 + = fourteen

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

  1. OUR SPONSORS

  2.  
  3. Most Heated!