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Thursday, March 06, 2008

“DIT”: Defining the Music Industry together in this new era.

“DIT”: Defining the Music Industry together in this new era.

- by gilli moon

Quite a few years ago, I wrote an article called “Taming of the Music Mafia”. You can read it here: It discussed the challenges artists were facing back in 2002 (sounds so long ago now right?), and where the music industry is heading. The term “mafia” was not not a literal term I used , but more a conceptual, metaphorically speaking way to reference certain control, monopolies and bribery that existed within the music industry, whether legal or illegal, between artists, radio, promoters and record labels. I talked about how artists signed to major record companies, who then spent their money negotiating airplay or retail end cap space to sell the CDs they needed to sell, to keep the ball rolling. I talked about pay to play, buying radio hits, and playing the “game” of the major record company system. Ah,… the music industry. Such an evolving subject these days. It's like a revolving door, with nothing that sticks.

Wikipedia defines the "music industry" as such:

The music industry is the business of music. Although it encompasses the activity of many music-related businesses and organizations, it is currently dominated by the "big four" record groups, also known as "the major labels"/"the majors" — Sony BMG, EMI, Universal and Warner — each of which consists of many smaller companies and labels serving different regions and markets.

Well, they’re a little outdated aren’t they, now that EMI and Sony are one. So basically, there are the big “3”.

I find it fascinating that the music industry definition is still defined as run by so few entities. But back in the day.. oh just a few years ago... artists would play the game with the majors because it was the only way to get a look in. Basically, worldwide exposure was “bought” , it has been claimed, and that any artist trying to get a look in had a fat chance because you’d have to sign up to the devil, really. The "devil", so to speak, were these record companies, apparently, who signed their artists to 5-7 album deals in order to get some kind of life expectancy out of them, be able to push their music through their styrophome towers and through all that, constucted binding 60 page contracts that left little room for artist independence, let alone the real opportunity for them to ever make their investment back or artists to make any money..

"the music industry mafia is pimping girl power sniping off their sharpshooter singles from their Styrofoam towers..." - Ani DiFranco

Playing the devil’s advocate, independent artists, those who were setting themselves apart from the machine of signing deals (or flogging themselves to the Labels to get signed), became silently, discreetly and effectively (to the major public eye) more in control of their business. I was one of them.

The cold hard fact was that Artists needed to become more in control of their careers and less beholden to the deep pocket, the stifling un-creative rigidity, and possibly (probably) get screwed, shelved, or bankrupt in the process. We all know, and knew then, that the "empire" was about to unravel. While independent artists began a surge of self-empowerment and the “indie” world ignited, so did the empire begin to crumble… as expected, and much needed. We all need Rome to fall in order for something new and exciting to transpire. Since my first article, Pandora’s Box has indeed opened and whilst label executives had kept their jobs for fifty years, since 2002, the majority have lost them. There is no more “status quo”. This is the movie The Terminator, except instead, the artists are the ones taking over the world.

What has happened is quite remarkable: the consumer started making decisions about what music they wanted to listen to. Instead of Corporate Music America deciding what we were to hear on radio, see on TV or watch live, consumers, with their ipods, napsters, myspaces, limewires, and youtubes, searched music content of their own choosing. Just google something and you can find it, and usually for free. They didn't want to have music forced down their throat anymore, especially when so much more interesting and abundant music was and is floating on the Net.

The indie artist quickly stepped up to the plate before a Major Record Company exec could write their next marketing plan. How exciting for an indie artist, who has always had to think outside the box and find other ways to get to the masses: the masses at their door step. And the "front door", with people banging loudly, became the artists' own websites, and Myspace profiles and anywhere an artist can upload, blog, ping, splash on the Internet. The indie artist began to take control of not only their careers and future income potential, but take control of how music is being marketed.

Meanwhile, the Major Record companies have had to think fast. Their CD sales plummeted, because consumers began to buy on the Net (downloads) direct from artists, and Cds were where their income had purely come from in the dinosaur days (that's just a few years ago by the way). They let off thousands of employees. Music retail chain stores began to close (Tower was the bedrock of Cd sales history. I was sad to see it go on the Sunset Strip, Hollywood). Recordd companies were closing down, merging, disappaiting, watching and waiting. The Majors realized they had to had to come up with marketing strategies and new revenue streams to survive, compete with the indie artist model of guerilla street and internet marketing tactics, that was thriving. The indie artist's model was now the model to go by. Who would have thought?

The Grammy Nomination systm is still a frustrating experience. Out of the hundreds of nominated artists, with some worthy albums and songs, the large percentage is trash. The best music to find is outside the traditional commercial norm: online blogs, word of mouth, iTunes, podcasts. Music television like MTV and VH1 rarely play a music video, what with lifestyle shows eating up the programming. It's partly the consumers' fault. We want reality... for some odd reason we want to get into the lives of real people and watch it on a daily, hourly basis. That's why American Idol works so well. Those artists that win each series become hugely famous in nanno seconds not just because it's rigged (um, I mean calculated programming by TV execs in cohoots with the record company ready to release an album by whoever wins). It's also successful, and the execs know it, because consumers WANT to be PART of an artist's development now. They don't want to buy an album by someone that is unknown and just lands on our airwaves (which is the old routine, payola and all that to get it there). No, consumers want to live and breath every moment, every tear, every laugh, every wrong note along the way to winning the contest that they have had a hand in voting. And then, when the record company releases the single only weeks after the last program of the series (weird how the timing is so perfect, huh?!), then the consumer is ready to buy, buy, buy, because they feel like they were part of the process of making that artist successful.

I’m not sure if I like the idea of American Idol being the barometer of talent, but it's true to say that the cream will always rise to the top, no matter how much sh-- you need to swim through.

I’m swimming as hard as I can…

The current shift

The new artist entrepreneur grew out of the ashes, like the phoenix, of dying Rome. It's just plain and simple. No one should be at the mercy of a large corporation when they don't even know the way. Many celebrity "major" artists once signed to major labels, have left them, and became indie, starting up their own labels (Radiohead, Simply Red to name a few). This is not just because they chose to. In some situations, the majors no longer have the power to keep up the level of promotion and finance, that these artists needed in the past. While there is still a "system" in place that the majors seemingly think they are in control of, because they still have more money to play with, it's a daunting future for them, because the income streams are so fleeting and ever changing.

Where we’ve arrived at is a slow shift of a quagmire – that is, it is seemingly unmoving and we don’t know exactly what the next phase is, but at the same time, there are shifts happening where artists are becoming more empowered, and labels are starting to change their face in order to meet the new business models, working with and by the artists’ playing rules. It’s a really exciting playing field, and not just for indie artists: but for the labels too. Everyone has had to change the way they do business and now we are all on the same playing field with bat in hand.

Artists have been able to control their sales & distribution, as well as their public awareness campaigns, themselves, and easily through internet interfaces. I'll explain further down about that. The record companies, in turn, are almost modelling their marketing tactics off indie artist ideas. For example, Marie Digby. Apparently she was so successful on promoting herself from her living room, playing raw, passionate original songs direct to 2.3 million friends, that she became an instant star, following that landing songs in TV shows and filling stadiums. Indie artist? Seemingly. But not really. There was no mention that she was signed. Just a girl with guitar. What we discovered later was this was a calculated marketing tactic by her record label, Hollywood Records, owned by Disney, to reach the new consumers who want to discover their own talent instead of being force fed. It worked. We all loved her Youtube site, and thought this 24 year old was a self-made success, and we were all discovering her. But the label was behind the ploy the whole time. You can read more about that here, and read other people's thoughts:

Personally, I think it's great. It's a clear example of how independent artists are offering the way, AND it's a solid affirmation that we are now all on the same playing field: artists and labels - we all can reach our audiences without having to "play that devlish game".

Where does it leave the independent artist? Well, I still think that although the "new model" is REALITY music, independent artists are more REAL in their marketing than anyone else. We are the first to let our fans into our worlds: our websites, our blogs, our free downloads. We want to interact with our fans, and we want them to be part of our development. Some indie artists invite fans to become investors in their CD production which is a great new way of including them in the early days, as well as helping to fund the album and it's eventual marketing.

I listened to a panel of record company execs recently at the Durango Songwriters Conference, that included reps from Warners, Curb and Atlantic. I felt it was a healthy discussion because I realized that the Labels now know they need to work WITH the artists and not just force feed their agendas on them, and everyone else. Reality is, as at March 2008, digital sales have plateued. Only 10-12% are legal downloads and Companies need twenty indicators to go off at once, not just a few Cd sales as ducks in a row, to see if their artists are going to "make it". There is a trend to go for the more organic music that shows realism rather than plastic, manufactured bland pop that represented an era that is dead. Music needs to be real, alive and shows the story of the artist that consumers so desperately want to interact in.

On another tangent, the younger generation are so distracted with all the available "toys" in their lives, that music is becoming a lesser "want". Gone are the days when a 16 year old would sift through vinyl records in their local music store for 3 hours trying to hunt down their favorite Grateful Dead album. These kids of today are plugged in introveniously to their ipods, cell phones and portable laptops, and are scouring the internet just for a quick, short term fix of a tune they heard on reality TV. Then trashed forever while they grab another quick hit song to engulf. They don't care if it's 5.1 Surround sound, 64 channel mixed. Nothing. They take it as it is, compressed, squashed and lifeless. They are also distracted by video games (hence that is now a great music marketing area to place your songs in), blogging, Instant messenging, social networking and all that is unrelated yet related to music. They love to chat, all day long, on their little digital interfaces, and if music happens to be involved, it's fast, furious and disposable. Preferably free to them.

Where to next?

So how do we hold onto our fans and create a career, then, if we are so disposable? What is the future for us Artists who love to make music, real music, that sounds big and fantastic and used to come with glossy visual CD covers that told our stories?

Well I see it is two fold: It’s about concentrating on two areas of our lives, and forgive me for asking artists to be a little business savvy here, but it’s absolutely vital to understand business and marketing. There’s no way out of it anymore. If you think you’re going to be in the music “business” without being business savvy, then get out now and make way for those who can do that part, because that’s the only type of artist who is going to “make it” (however you want to define that). I’ve spent a whole book speaking about artists as business people. Check it out: It’s called “I AM A Professional Artist – the Key to Survival and Success in the World of the Arts”. I also addressed the concept of “success” in that book, and I believe you need to define success on your own terms, not by some commercial token of reward, because these “tokens” are changing. Once a dream may have been to be number one on radio. Well, my friends, I figured that smoke and mirrors out long ago, and it had a lot to do with payola, timing and what deal you had in place. Nowadays, a token of success could be that you land the front page of MySpace. However you see it, and whatever you want, it can all be real, but don’t lose sight of the bigger picture – the longer path. Tokens come and go. Artistry is life long. Anyway, you can read the book to get the jist of my take on success.

So, for an artist to think business-like, it needs to be broken down without all the bells and whistles and ambiguity that Record Labels have done in the past. I see it in two ways:

1. Sales & distribution, and 2. Public awareness campaign

1. Sales & distribution centers around all the avenues that you can make money. These days, you make money from diversity, not just one avenue. Gone are the days when you wait for your royalty cheque for record sales. You can have record sales (CDs) but they will slowly die out. Don’t worry, something else will take it’s place in a tangible form, I promise. We still like to hold things in our hands, at least for now. So you have CDs, that you can sell at gigs, or in stores. When it comes to bricks and mortar distribution, you’re far better off just having your CD in the system rather than shipping them to the stores because if they don’t sell… if you’re not in that little town pushing the heck out of it, you better get your cheque book out to cover the return shipping. Still, retail is minorly tangible and doable, but touring is a real asset for any artist. Getting out there, being on the road and selling your products is so valuable. Remember, fans want to see you and feel you. It’s a cash business, an impulse business – they see you perform, they buy your Cd. I I think of myself as a door-to-door salesman ready to sell anything I have available (“Wanna buy a watch?” she says, as she opens her invisible trench coat). I sell CDs, my book, t-shirts, caps, mugs, posters… whatever I have that is about me. Fans love to grasp onto anything that’s about the artist.

Other areas of revenue include the now lucrative, but soon to be densily populated, film and television music placement market. Did you know that this is the number one marketing plan for record companies these days? That’s right. It’s lucrative if you’re ready to play the game hard and get on the phone. But it’s there for the taking, and artists and labels alike are equal with their foot in the door. While labels may have “ins” with the film companies (example, Sony Music and Sony Pictures), indie artists also get a look in because their original songs are usually easier to clear, and that makes it much easier for the music supervisor who needs to get the song in the film fast (music is always the last thing placed in the film by the director which is sad because there’s less of a budget, but we can capitalize on the opportunities fast).

Anything where you can think outside the box, and expand your revenue sources from all the creative aspects of yourself, will bring in opportunities and money. The focus should be about expansion and not the pennies. For once you start thinking abundantly, and expand your horizons, the money will flow in.

Capitalizing on your fan list is the most important avenue, because in business the most important thing is to take care of your current customers. So if you can work hard at building a relationship with your fan base, and tease them with new products for sale, and some giveaways, such as music downloads and ringtones, you’ll find that they will keep buying from you forever. Now, this theory works well for indie artists who are personally in touch with their fans. For the majors, they’re finding in this new era, that their targeted consumer base: young, hip, distracted, internet teenagers (I mentioned them above) will usually buy the first Cd or download, but can’t guarantee even 10% of sales for the next one. Poor Labels. I sympathesize with them as they “move through this rough period”. Believe me, an A&R executive actually said this on the panel last weekend. “We are assessing it as best as we can, as we move through this rough period”.

Rough period: What! Are we in the dark ages? Hell no. This is the age of enlightenment, of empowerment, of artist growth and global change. Just watching the U.S democratic primaries just makes me so invigorated about the future, no matter who gets in as President. We need this diversity, and change, and new thinking. I’m so excited to witness the evolution of artist empowerment and people empowerment before my eyes, while old mainstream corporations tumble.

2. Public Awareness Campaign – while those who are dependent on the nickle and diming suffer in their “rough period”, the second avenue of focus for artists is critical in order to support the sales and distribution: developing your public awareness. We have all the tools at our fingertips now: the Internet is our friend. Building relationships, everywhere, with everyone. Using social networking sites to draw attention to your website is the masterful plan.

Your website it the hub, the home for everything. No matter where you are on the Internet with your music or information, make sure that it always links back to your website, as that is the one thing you can control, and the one area where you want your fans to embrace your music and artistry. THIS is the new place to show everything about you, taking over the old CD Cover. You can bring your visual form to life with the way you design your website, and allow fans to enter into your world, and hopefully, live and breath it on a constant basis.

Build your fan list, one fan at a time (I now have over 25,000 on my list from doing every gig in the land… it takes time, but it’s so worth it.) Send really cool and insightful newsletters. Get to know your local media, which includes the traditional radio, tv, newspapers, magazines. And know that internet promotion is equally if not more beneficial: cross linking, adding comments, blogging, banner ads, discussion lists and networking.

Be out in the world. Just get out there. That’s the title of my next book I’m currently writing. Go to music conferences, play at festivals, get on compilations, host artist nights… where you can gather like minded individuals and help promote each other’s music. Podcast, webcast, Youtube, Myspace, Facebook. Gosh by tomorrow there will be 50 more sites to be on. Every day it’s evolving and growing.

Most importantly, nurture your current contacts and build formidable relationships. Most of my opportunities come from people I already know, and sometimes years down the track. And even if you’re 35, 45, 55, 65 years of age,… it doesn’t matter how old you are. I write about this often. There’s no age limit to artistry. You just need to know your market. Market yourself to the audience that loves you for your music, not how high your skirt is at age 18.

Have a plan. Have a dream. Dream big. Everybody should have their own plan. Don’t rely on a Label to provide you with the answers, because they’re right there with you wondering what the answers are too. You don't need a label, and the labels know you don't need them. But because everyone knows the same thing, there is no harm now working together on new models, deals and visions where EVERYONE benefits.


OK so here’s the crux of it. Listen good: there is no “us” and “them” anymore. There is no fight and there are no sides to take, anymore. You can be indie, and you can be signed. You can be self-released, and you can be commercially distributed. There is a “we” that we need to recognize now, in order for the music industry to survive, and for the “music” that we make to be respected and protected.

There is the overly used term “DIY” – Do it yourself. Sure, go ahead. But here’s my new theory. DIT: Do It Together. I am quite invigorated with the state of the music industry because artists and labels now have an opportunity to work together on a new future. Labels are making new deals where artists are more in control. Joint ventures are cropping up, and 360 deals are a buzz word (basically labels are taking a share of all revenue artists’ make, not just CD/music sales.) It might sound a little fishy, but in reality, it is asking for Labels to work harder now on the other areas of an artist’s life, not just on recording their album. Labels can help with their web presence, their merchandise, their touring, and be accountable too.

DIT means that indie artists don’t have to feel like they’re doing it alone. They are independent, yes… building their business as any entrepreneur should. But you can’t do it alone. You do it with people who support you: your team. We are in this world to work and be together.

I’m inspired by the opportunities at hand. They are what you make of them. You can either go back to your coffee and TV after you read this blog, or you can get on the Internet, turn the music up loud and take advantage of the sea of possibilities awaiting at your fingertips.

"We live in a time where entrepreneurial excellence is paramount. it's time for artists to take control of their own destiny..."

- gilli moon