Monthly Archive for February, 2008

TuneCore — Helping Artists Digitally Will Now Help Sell CDs On The Cheap

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Rob Stefaniak
on February 28, 2008
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TuneCore LogoTuneCore, pretty much the best thing going for Artists to digitally distribute their music through iTunes (globally) and other major digital stores (Rhapsody, Amazon, eMusic, MediaNet Digital, etc.), will now branch out into physical CD distribution on April 1, giving artists another way to sell their music.

Artists will pay an undisclosed “low” fee for the first year of distribution, and some other amount after that (a company representative says the fee will be on par with what it charges for digital distribution — in other words, next to nothing). In return, TuneCore will create a flash store that can be embedded on the Artist’s websites in order to sell the physical discs.

Artists will still manufacture their own CDs, set their own prices, and design their own cover art and liner notes. Going forward, there will also be an option to pay for CD manufacture with revenue from digital sales. TuneCore will process the orders and ship the CDs, giving 100 percent of sales revenue to the Artist.

I have used TuneCore and it is the real deal. Super easy, great accounting reports and a non-exclusive agreement of which you can opt-out at any time. Last year when I began looking for a digital aggregator to distribute an album for a band I represent, I first contacted IODA and The Orchard. They both wouldn’t deal with an Artist / Label with only one catalog release. So I found TuneCore and I am glad I did. It is truly a ‘no-brainer’. Their model is based on that of FedEx, whereas all delivery fees are paid upfront. Here is an example of how the math breaks down to distribute digital music via TuneCore:

iTunes US Store $0.99
iTunes Canada Store $0.99
iTunes UK/Europe (many stores) $0.99
iTunes Australia/New Zealand $0.99
iTunes Japan Store $0.99
Rhapsody Service $0.99
Amazon MP3 $0.99
GroupieTunes/Music.com $0.99
eMusic Store $0.99
Napster Store $0.99
Ten Songs @ $0.99 each $9.90
First Year's Maintenance (increased from $9.98) $19.98
Grand Total (for first year) $39.78

So, for an album of 10 songs it’s a grand total of $29.78 $39.78 to get the music in all the major digital stores. Then there is a $9.98 $19.98 yearly maintenance fee going forward to keep the music in the stores. The Artist gets to take home 100% of all revenues. It doesn’t get any better than that!!

UPDATE/CORRECTION from Peter Wells of TuneCore in the comments: MediaNet Digital doesn’t accept content from anyone anymore, so they had to pull it. Same with Sony Connect. They have added GroupieTunes, which goes to Music.com and does ringtones! Songs are still $0.99 each, but the yearly maintenance fee has increased and is now $19.98.

Dirt-Cheap Digital Distribution | Listening Post from Wired.com

TuneCore Will Help Bands Sell CDs on the Cheap | Listening Post from Wired.com

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Now playing: Coconut Records - Nighttiming
via FoxyTunes

Free! Why $0.00 Is The Future Of Business: Cross-Subsidies

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Rob Stefaniak
on February 25, 2008
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Free StickerIn this months WIRED (16.03), editor Chris Anderson (author of The Long Tail) pens a great article on why the future of business will be founded on providing goods and services for FREE.

An example of how live performance revenues subsidize recorded music revenue is brought forth using a Brazilian band called Banda Calypso that self-distributes masters of its CDs and CD liner art to local street vendor networks in towns it plans to tour. They have full agreement and expectation that the vendors will copy the CDs, sell them, and keep all the money. They allow this because selling recorded music isn’t their main source of revenue. The band recognizes they are actually in the live performance business. And business is apparently really good for them - they tour and travel from town-to-town via private jet.

In addition, the use of the street vendors for distribution generates more ’street cred’ for Banda Calypso in every town they visit. Their omnipresence in the urban soundscape means they get huge crowds to their rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.

Free Prince CD

Last July, Prince debuted his new album, Planet Earth, by stuffing a copy — retail value $19 — into 2.8 million issues of the Sunday edition of London’s Daily Mail. (The paper often includes a CD, but this was the first time it featured all-new material from a star.) How can a platinum artist give away a new release? And how can a newspaper distribute it free of charge?

A) Prince spurred ticket sales. Strictly speaking, the artist lost money on the deal. He charged the Daily Mail a licensing fee of 36 cents a disc rather than his customary $2. But he more than made up the difference in ticket sales. The Purple One sold out 21 shows at London’s 02 Arena in August, bringing him record concert revenue for the region.

B) The Daily Mail boosted its brand. The freebie bumped up the newspaper’s circulation 20 percent that day. That brought in extra revenue, but not enough to cover expenses. Still, Daily Mail execs consider the giveaway a success. Managing editor Stephen Miron says the gimmick worked editorially and financially: “Because we’re pioneers, advertisers want to be with us.”

How Can A CD Be Free? – WIRED 16.03

Free! Why $0.00 Is The Future Of Business – WIRED 16.03

How To: Make Money Around Free Content @ WIRED How-To Wiki

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Now playing: Glen Hansard and Marketa Irglova - Falling Slowly
via FoxyTunes

Up Close: RCRD LBL Co-Founder And CEO Peter Rojas — FMQB

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Rob Stefaniak
on February 25, 2008
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RCRD LBLFMQB (Friday Morning Quarterback), a publication servicing radio programming and management executives, as well as music industry executives, recently interviewed RCRD LBL co-founder Peter Rojas.

RCRD LBL is an online record label releasing exclusive and completely free music from emerging and established artists. In addition to their in-house label, the RCRD LBL network includes a curated roster of independent record labels offering free MP3 downloads and multimedia content in blog format.

Peter Rojas came out of the blog world where he founded the popular Engadget site, amongst others. Since he’d learned a lot of lessons about what made a successful blog, RCRD LBL became an idea about creating a site – a niche media site – where you try to connect with a very specific audience, and you try to do that by being very authentic or real with that audience. In thinking about what was wrong with the music industry, it seemed there was all this excitement and interest in music now, but it wasn’t being monetized through the selling of CDs or even digital downloads. He felt that the real excitement, energy and passion was all taking place online in various forms, whether it was music blogs or social networks.

So Peter thought, “What if you could take a lot of these lessons I’ve learned from what makes a great blog, and apply that to the music industry?” He recognized that there is a lot of interesting overlap between what a label is really good at, which is identifying and cultivating talent, and what a music blog is really great at, which is identifying and sharing music from artists that the blogger is really excited about. In the places where they overlap, you could create a really interesting business. You could create a site that gives away the music, just like a music blog does, but do it legally like a label does, and then monetize everything through advertising like a blog does. All the components fit together nicely, and it seemed like an instance where you can align the interests of everyone involved. The artists that are participating are getting compensated and also get to build their audience. The fans get great music for free, and the brands that are partnering with us and supporting what we’re doing get a chance to be seen as actively being part of the solution to some of the problems that the music industry is having. Everyone wins!

Up Close: RCRD LBL Co-Founder And CEO Peter Rojas — FMQB

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Now playing: Moby - Last Night (Album Mash-Up Mix)
via FoxyTunes

Gerd Leonhard: The Future Of Musicians And Creators

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Rob Stefaniak
on February 17, 2008
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Media futurist Gerd Leonhard expounds on net-powered musicians and creators in his new series White Board Wisdoms.

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Now playing: Holy Fuck - Lovely Allen
via FoxyTunes

Dan Kennedy’s Six-Point System For Saving The Record Business

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Rob Stefaniak
on February 17, 2008
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Rock OnI just finished reading Rock On: An Office Power Ballad by Dan Kennedy - a very funny and entertaining read. In a nutshell, the book is an insiders perspective of the downfall of a major record label (Atlantic) described as equal parts This Is Spinal Tap and The Office. Thought I would share one of my favorite excepts, that is actually a “Bonus Track” at the end:

Dan Kennedy’s Six-Point System For Saving the Record Business (page 211)

  1. Rerelease CDs as “Very Deluxe Editions” - new packaging to include bonus DVD and two five-dollar bills.
  2. Revise “Online Is a Fad” speech from 1999, 2000, 2001, 2002, 2003, 2004, and 2005 sales conferences. New title for speech will excite Wall Street: “Embracing Technology as We Rock into the Future.”
  3. Presidents and chairmen: If the last hit record you were responsible for was released over seven years ago, your new contract will be cut back to pay only $10 million for five years, plus bonuses, not to exceed $21 million total in salary and bonuses. Suck it up.
  4. Top excutives to maintain only two homes in North America, and only one in Europe.
  5. Please note: If you use luxury helicopter charter service to get out to Hamptons to “See a band,” please ask if anyone else plans on using helicopter that evening, and try to helipool.
  6. Overall: Adapt to getting by on 95 percent profit margin instead of 1120 percent profit margin.

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Now playing: Tapes ‘n Tapes - Hang Them All
via FoxyTunes

CASH Music: Coalition Of Artists And Stake Holders

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Rob Stefaniak
on February 14, 2008
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CASH MusicCASH Music: stands for Coalition of Artists and Stake Holders. CASH Music is a flexible platform through which creative stake holders — artists and audience — may interact and support one another through community. CASH believes that an engaged, participatory and supportive audience promotes a healthy, vibrant ’scene’ fostered around creative works.

Via CASH Music, the listener/fan is asked to interact with the Artist’s output, assess it, and be inspired by it, thereby enhancing it’s value. When value is realized, the listener/fan is asked to contribute accordingly — money, ideas, effort, or all of the above.

The listener/fan and the CASH artist share the common goal of the continuation of the creative process and artistic output. They describe it as a ‘read-write culture’ where the cumulative parts of the artistic enterprise — money, ideas, effort — enrich the total experience.

CASH supports distribution by torrent as part of a suite of ‘e-anticommerce’ tools — as well as a few other ‘nifty surprises’.

Currently CASH Music has three artists on it’s roster:

Kristin Hersh: kristinhersh.cashmusic.org
Donita Sparks + The Stellar Moments: donitasparks.cashmusic.org
Xiu Xiu: xiuxiu.cashmusic.org

I believe CASH Music is the closest thing we have seen to the ‘intellectual property as stock‘ concept previously mentioned by Terry McBride in WIRED (Wired 14.09: No Suit Required)…Artists offering shares in their enterprises which people will be able to make equity investments.

But probably the most important aspect of this concept is the opportunity for the listener/fan to build a more visceral connection to the Artist by actually having an ownership stake in the creative enterprise.

User-Funded CASH Music Label Triples Artist Roster | Listening Post from Wired.com

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Now playing: Cat Power - I Believe In You
via FoxyTunes

Study: Blog Chatter Can Triple Album Sales | Digital Media Wire

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Rob Stefaniak
on February 12, 2008
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A study on blogs’ impact on music sales conducted by an NYU/Stern professor and a former student has found that the volume of blog posts featured on the Internet before an album’s release can significantly affect future album sales, and in turn can predict sales for record labels. This is the first study to quantify the economic impact of user-generated content for the music industry. When legitimate blog posts exceeded a threshold of 40 before an album’s release, sales were three times the average, and increased five-fold if the album was associated with a major record label.

When blog activity reached more than 250 posts, sales were six times the average, regardless of label affiliation.

Additionally, an indie album with 240 blog posts in the observation period could overcome the disadvantage of being on an indie label.

According to Coolfer, the survey looked at 108 albums and tracked blog chatter using Technorati. The researchers only looked at CD sales by using the Amazon.com sales rank as a proxy. Had they been able to obtain Soundscan data to analyze digital sales, it’s likely the sales numbers for indie releases would have been greater as they have a higher digital share than major label releases.

Does Chatter Matter? — Archive @ NYU

NYU Researchers Study Music Blog Buzz — Coolfer

Study: Blog Chatter Can Triple Album Sales | Digital Media Wire

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Now playing: Sonic Youth - Superstar
via FoxyTunes

Proto-Markets & The Long Tail

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Rob Stefaniak
on February 12, 2008
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I have been thinking about the ‘proto-market’ lately because of an exciting project I am currently working on called Drummer Hunter, a website dedicated to helping drummers and bands connect. It primarily services the ‘proto-market’, the local and small scale music scenes where new talent and styles emerge. The ‘proto-market’ exists at the edge of the sphere of commercial music production.

And so after some googling, I stumbled upon this article, The Changing Face of the Music Industry, that does a nice job of connecting the ‘proto-market’ with the Long Tail. I think it is from 2005, but still relevant.

FYI - Jason Toynbee was a professor of mine. Here is a summary in which I have extracted a few bits and pieces:

As a backdrop to the here and now in which the struggle for the survival of the major record company is being played out, Jason Toynbee’s Institutional Autonomy or IA theory (2000) in recognizing what he describes as ‘proto-markets’ is of real value. Proto-markets include the musicians who exist outside the present commodified structure of the music industry i.e. the vast majority. The notion of the proto-market identifies the groups and individuals that arguably stand to gain most from the collapse of the major label system. These proto-markets contribute to the first stage of IA theory undisciplined labor force that exist largely autonomously of record companies.

In the world of the Long Tail there is no such thing as over-supply and everything has a chance of consumption. Combine enough non-hits on the Long Tail and you’ve got a market bigger than the hits…the biggest money is in the smallest sales…the market that lies outside the reach of the physical retailer is big and getting bigger. As a result, almost anything is worth offering on the off chance it will find a buyer… In a Long Tail economy, it’s more expensive to evaluate than to release. Just do it!

The main predicament the major labels have is summed up by channel conflict, whereas the labels fear that if they price online music lower, their CD retailers will revolt or more likely go out of business more quickly than they actually are. As obvious as this may seem there are further problems. The choice facing fans is not how many songs to buy in digital download form, but how many songs to buy rather than download for free. Intuitively, consumers know that free music is not really free: aside from any legal risks, it’s a time-consuming hassle to build a collection…

With so much music available, consumers will eventually prefer to rent and have more choice than just buy and own some of the music they like. ‘By offering fair pricing, ease of use, and consistent quality, you can compete with free.’ (Anderson:2004:p8) This in effect returns music to its pre-recorded days of service as opposed to product. ‘Drastically lower prices for music products and you will see piracy disappear quickly.’ (Leonhard 2004:P8)

Or as Adorno (1941) would contend, ‘Popular music becomes a multiple choice questionnaire,’ with ‘music as largely social cement.’

For the Artists who currently occupy the ‘proto-market’ to produce recordings and make them available on the Internet, in a Long Tail economy, they will eventually find a buyer/renter/fan.

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Now playing: Nada Surf - Weightless
via FoxyTunes

Jazz Summers Invests £10m In Music Talent — Telegraph

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Rob Stefaniak
on February 6, 2008
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Power Amp MusicBritish newspaper The Telegraph is reporting that Jazz Summers, the manager to bands such as The Verve and Snow Patrol, is fronting a fund which aims to raise £10m to invest in new and established UK music talent. He is joining forces with venture capital and advisory firm Power Amp Music to launch the tax-efficient investment vehicle.

The Power Amp Music Fund will invest in up to 30 artists, with independent labels or concert promoters, in exchange for a share of revenues from recording and publishing, merchandising and live events.

With CD sales in decline but demand for concert tickets and music festivals at an all-time high, record labels and music business investors are seeking a cut of everything from TV appearances and ticket sales to T-shirts.

According to their website, the Power Amp Music Fund is described as a tax efficient vehicle offering the opportunity to invest in a diversified portfolio of UK music talent. The Fund uses an artist-centric development model that brings the source and destination of music closer together and generates enhanced returns for artists and investors.

By investing directly in artists’ careers, investors participate in all revenues available: recording, publishing, live, merchandising, and alternative (digital, branding etc,). The model offers an effective route into an industry with strong future revenue potential.

Jazz Summers Invests £10m In Music Talent — Telegraph

Summers Fronts Music Investment Vehicle — Billboard.biz

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Now playing: Les Savy Fav - The Equestrian
via FoxyTunes

Black Mountain / Yeasayer / MGMT

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Rob Stefaniak
on February 5, 2008
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I went to the Black Mountain / Yeasayer / MGMT gig last Thursday night at Neumo’s. Earlier in the day I was at Easy Street Records to pick up some music. I was going to buy the Yeasayer album as well as the Black Mountain album for $11.99 each, but then I thought I should just wait and get them at the show for the anticipated price of $10.00. This was an interesting show in that most everyone came there to see MGMT, but they were playing right after the opener and before both Yeasayer and Black Mountain. I made a visit to the merch table to see the offerings and pick up a couple CDs. Both Yeasayer and MGMT were selling their CDs for $10.00 while Black Mountain was selling their CD for $12.00. I already had the new MGMT album. While I was planning to buy both the Yeasayer CD and Black Mountain CD, I only ended up buying the Yeasayer CD. I just couldn’t believe Black Mountain was selling their CD for $12.00?? Come on? Seriously, I could have bought it at the record store for that price! AND how can you justify selling your CD at a higher price than the other two (probably more-recognized) bands on the bill?

Well, as I stood around the merch table for a while I noticed no one was really buying the Black Mountain items. Their “manager” or whomever the older gentleman was representing them at the table, looked very unhappy that everyone was buying the merch from the other two bands. And Black Mountain was technically the headliner. All I could fathom was, what a fucking idiot! Why did you ever think you could get away with that? Why wouldn’t you just sell the CD at the same price as the others? For that extra two dollars you believe you deserve, you are totally fucking over the band by building a barrier between them and a growing audience. That extra $2.00 was stopping everyone from taking home their music. Granted, maybe it was the band’s decision to sell it for a higher price. But I really doubt it.

My first instinct was to think, “Wow, that manager really made an incredibly stupid decision.” It stopped me from buying the Black Mountain CD (along with everyone else) and for the most part it I became disinterested in the band. I actually left before they even went on stage. Maybe they eventually sold some CDs after their set? However, I am sure it was no where near the fervor in which people bought the CDs and other items offered by MGMT and Yeasayer before they even played.

LESSON: Music is largely a spontaneous purchase, an impulse buy – born out of curiosity. Why not make it a “no-brainer”?

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Now playing: She and Him - Why Do You Let Me Stay Here?
via FoxyTunes