Orpheus with his Lute made Trees,
And the Mountaine tops that freeze,
Bow themselves when he did sing.
To his Musicke, Plants and Flowers
Ever spring; as Sunne and Showres,
There had been a lasting Spring.
Every thing that heard him play,
Even the Billowes of the Sea,
Hung their heads, and then lay by.
In sweet Musicke is such Art,
Killing care, and griefe of heart,
Fall asleepe, or hearing dye.

John Fletcher, William Shakespeare

Ahhhh the power of music. During these changing times that David, Celia, Scott, Yobie and Jeff have earlier commented on, constructed and deconstructed here, that is the thread that I see stitched through their commentaries, as we are all trying to figure out how to monetize/prostletyze/synthesize the new paradigms (please excuse the buzzword) for recorded music inherent in the evolution or de-evolution of the music industry, wrought in large part (but by no means exclusively) by the digital genie that emerged from the bottle just a few short years ago. Other factors making those darn paradigms shift: general economics, a maturing industry, immaturity in an industry, music “quality” and the effect of societal factors on forging the mores of music at certain periods of time (ex: The Sixties: Vietnam/Womens’ Liberation/Sexual and Drug Mores/Economic Prosperity and post Big War education/Civil Rights Movements, etc., etc., etc.–how could the music not have been great and crazy and captivated a generation to an extreme degree?), corporate ownership and centralization, increasing competitive pressures of related music industries such as touring and merchandising, and ever increasing competion for the fan/consumers’ dollars. Underlying David’s impassioned battle cry of “Idiot’s Unite” is his feeling, expressed and unexpressed, that the belief in the power of Orpheus’ lute may be, at this juncture in time, like Sisyphus pushing that damn rock up the hill, a futile and misguided attempt to fight daily battles in a losing war. So what keeps him, and so many others, going? On an emotional level, power and effect of the music on them, and on a pragmatic and darwinian survival level, the belief that there are still workable economic models, on scales both large and small, for selling recorded music. Or, to quote an ancient Punjabi proverb: “When their stores are full, idiots are considered wise”. Scott’s comment that he doesn’t want to see the “devaluation of the musician’s property-the song” resonated with me, and made me think of a part of the music universe that we don’t want to be a dying breed: the songwriter who is not out actively performing/making their living as a touring artist…just because someone is a great performer/vocalist/guitar player doesn’t mean that they will be or should be, or can be, a great songriter. We can create models where a music artist makes their real money from touring and merch and master/synch licenses and public performance royalties, with the recorded music being distributed only to help create the value in those other revenue streams, but that sucks not only because the artists should get paid, someway somehow for the sale of their masters and the publishing royalties that go along with it, but also because a non-artist songwriter who does not receive the mechanical royalties attendant to the sale of the master has just lost a portion of her/his income. Maybe subscription models with publishing performance revenues if deemed streams will help offset lost mechanicals. We shall see. I throw this songwriter issue out here as just one more example of the thorny issues involved in this variegated music business ecosytem.

Scott, I agree wholeheartedly with your recent posts. Last night at NoisePop in San Francisco, Celia and I began a discussion on the same topic and we largely agree on the premise that artists should be paid fairly, handsomely in fact if their work rocks.

That being all said, the challenge is how to confront the nature of digital’s inevitable rise to reality and dominance. The absence and demise of physical media is a foregone conclusion. Digital fidelity is here today. The only folks complaining about the lack of quality are audiophiles. Media is merely a storage issue. We are moving to an era where access to the internet will be ubiquitous and without wires. Quad processors for the home computer are on the horizon.

So now, where does the artist and his posse go? Technology has wrought this digital nightmare on all of us but the optimist in me also believes that technology will have us. The technology has to have key attributes ~ the ability to get paid or pay for the artists’ work, the fans have to be in the value chain, artists should be able to monitor and monetize the use of their work, provide licensing opportunities, and on and on and on…

One of my goals it to start an imagineering session on several items:

1) What do artists want in a digital world?

2) What do managers want?

3) What do labels want?

I am looking for specifics, i.e. “need the ability to monitor where my songs are being played”

I don’t promise solutions but technologists like myself work on precise functional specifications. Who knows? The idiots on this blog may be the ones to spark the elusive solution to the digital nightmare.

To be part of the solution, we need to figure out what we are solving first. There is rarely a information problem that can’t be coded. Understanding what we want is the down payment for the music industry’s future.

Yobie, I love the idea of the fan becoming a catalyst for awareness and sales. I have no problem (and even applaud) the idea of the fan sharing in the profits of selling an artists’ music. What I don’t want to see happen is the devaluation of the musician’s property - the song. I have absolutely no problem with all of the old ways of selling music going away. I personally will miss the physicalness of records (meaning vinyl) and CD’s. My first job at Sound Warehouse in Midwest City, Oklahoma was selling 8-tracks (I’m 41 now - so it was at the very beginning of my career there - but it does show what a difference 25 years makes) - so there has always been a physical side to music for me. That is changing, my 3 year old son will probably think of CD’s the same way I do the 45’s from my childhood when he hits his early teens. Already, there is a 2 terrabyte hard drive at my house over half way full of music (all from my personal collection by the way). What I’m hoping is that just because there isn’t a physical aspect to the music distribution now, that the value of music doesn’t disappear.

I wish it could all be free. I argued with WB to begin streaming (and even let people download) the last Lips record before the CD was even released. I believe that for every 20 people that download 1 or 2 will actually purchase it. But, just like people who design software, or write books, or make movies how do we decide on a value of the product that is passed on to the consumer.

The reality is just as Yobie described, “bands and musicians have to greatly expand touring, licensing and merchandising to make meaningful money.” Is that fair to the artists? Maybe it is. I don’t know. If we are talking capitalism - the consumer decides the value of the product. So, perhaps, the music is not valuable, but the business of music around it is. What does everyone else think?

As I listen to Celia, David, Jeff and Scott, I am reminded that I am the outsider techie in this august blog group. A lot as has been written about the dynamics of the industry today as the digital juggernaut continues to demolish all things physical (CDs, DVDs, etc…) in the music industry.

The emergence of bands from the social networking scenes has created a phenomenon with no clear and sustainable revenue models for the bands or their labels even as digital distribution continues to grow. There is a huge difference between the discovery of an up and coming band by some social network and the building of a financially viable industry from essentially scratch. Consumer rights forced by European Union countries are eventually going to force cross platform integration.

Bands and musicians cannot solely rely on the proverbial “check in the mail” and have to greatly expand touring, licensing and merchandising to make meaningful money. The situation is even worse for the labels who operate largely in the physical world.

One thing I do not see in the discussion threads is the role of the fan as both catalyst for distribution and real revenue. The music industry is still mired in its old ways and it seems that it will continue to do so. As long as fans are not integrated in the distribution chain in a meaningful way, the demise of the industry as we know it will continue.

Comments, my fellow bloggers or readers?

I’ve been thinking a lot about Scott’s treatise “Empowerment.
Entitlement. Partnership” – and want to throw down some of my thoughts:

There are many great bands who’ve come from the indie ranks, touched every wrung on the ladder (twice, three times, probably) and are the better for it. The business that Scott and Flaming Lips have built over the past 20 years is a shining example of this. People should study the Flaming Lips’ story – find out how they built their business before, during and after the band’s success at radio with “She Don’t Use Jelly.” How did that set them up for the kind of artistic freedom at Reprise that allowed them to – gasp – take more chances creatively, and garner more success at radio, retail, touring, etc.?

In my world, I constantly talk to the artists and producers I work with about the idea that we are building a business - the same as the guy who has the coffee shop on the corner, or the entrepreneurs who started YouTube. Hell, just getting everyone into the head space that what you are doing is a BUSINESS, and that a band is an entrepreneurial enterprise, is a HUGE step. And that can empower everyone on the team. I recommend books to bands (more on that later)….

We have to see what we do as a partnership with our bands, managers, publicists, distributors, agencies - everyone pitching in to work toward the common goal - or we will falter. It’s imperative that artists see their team as an actual team, and that they, too, find a way to pitch in, communicate with everyone and keep everyone on point. The information superhighway has made this a lot easier for bands - “pitching in” can mean writing and sending an email blast to announce a tour, or just getting back to the agent about the support act for the tour, or approving artwork in an hour instead of a week.

A lot of people who have immense musical talent can’t shake the fantasy that “someone else” will handle all the heavy lifting. It’s easy to understand this. You never read a rock bio in which the hero (Robert Plant, Jim Morrison, HR from Bad Brains) lined up the meet and greet backstage, or hustled extra money out of the label for special foil print packaging. Indeed, we have been taught - hypnotized into thinking - that the people who write all deep lyrics, wicked guitar solos and insane drum turnarounds should be able to F off all day, turn up drunk to the show and “just play, man.”

I have a feeling that in 20 years when the rock bios of today’s giant bands (Arcade Fire, The Killers, Fall Out Boy, Panic At The Disco) come out, there will be plenty of talk about hands-on band activity. From what I know of these bands, they are all heavily involved in the daily operation of their enterprise. The personal touch is recognized by their fans and appreciated by their partners at the label, booking agency, etc.

What Celia is talking about with this statement: “The model of merging indie labels and creating a label services central hub makes a lot of sense to me. Most labels can’t afford to finance full production, royalties, accounting, merchandising, synch licensing and related services so amertizing the risk with many labels creating a hub makes the most sense.” is exactly what World’s Fair is trying to do. We are empowering labels to be able to work together and save money doing it. It’s a relatively new model of doing business and (while it’s been a struggle - like all new businesses are) it seems to be working. We are constantly trying to find more affordable ways to do business for everyone involved - which also helps the artists.

I find one seriously debilitating problem is that many artists have a sense of entitlement. That they feel just because they make great art (music) that they deserve to make a great living from it. As a manager, I have to remind artists that this is the “business of music” and that to make money - one must earn it. Sounds like a simple concept, but for many it’s hard to accept. I wish it worked differently, but it doesn’t. And, frankly the more successful an artist, the harder the work becomes - there’s more pressure to succeed and it’s harder to get people to pay attention again (as opposed to pay attention the first time). Wayne (from the Flaming Lips) is simply the hardest working person I know in the show business and this is how he’s been able to survive the ups and downs of being in a band for the last 20 years.

Fortunately for myself - the Lips and myself have formed a great partnership over the years. A partnership of business and art. This is how artists and record labels are going to survive into the 21st century. Even if the means of distribution is purely digital, there still is the cost of recording (and even if that goes down next to nothing due to digital recording abilities getting better and better) you still need man power to help promote the music to various sources through either licensing or the press. A band most likely won’t have the time to deal with the business side as well as the art side - so they need a partner. Perhaps the labels will become that partner - more like a manager that helps distribute the artists albums than a stand alone entity paying for the recording and then sending it out to the world.

Dave - I think you’re right. We do have to think differently to make up for the immensely changing times. That is one dense post.

I think the silence since you originally wrote it only underscores the difficulty people have in finding solutions…everyone I know is trying to figure out how to make it all work.

Yesterday, XM and Sirius announced a merger. Two billion dollar companies are having difficulties making it work on their own, and so it’s not that surprising that small indie labels find it tough as well.

The model of merging indie labels and creating a label services central hub makes a lot of sense to me. Most labels can’t afford to finance full production, royalties, accounting, merchandising, synch licensing and related services so amertizing the risk with many labels creating a hub makes the most sense.

I like the idea of becoming more involved in the artists’ career.
So do booking agents.
So do publishers.
So do the lawyers.
So do the accountants.
No one wants to give it up, but everyone wants to earn enough to keep motivated. It’s an interesting challenge. I’m not sure we’re all going to be sitting in the same room further down the road. I imagine a lot more will fall by the wayside and those with flexibility and drive will survive…if only because they are “idiots” - foolish for valuing their passions above their wallets, but satisfied to be working in a world they honor. Last night a dj saved my life was not just a good song lyric. It was a creedo for many.

Most of the indie labels we look at closely have a few known artists to keep up the volume of trading. Thank God. I wouldn’t want to be an indie starting out with a brand new roster right now. Unless you had famous friends, it would be tough.

So if joining forces is the best way to manage change, shouldn’t the indies created joint resources for production, health services, royalties, and basics to help everyone spend more time working with bands and less time behind a computer managing numbers?

At the end of the day, only a few artists rise above the masses, and those artists have one thing in common. Great records. (There are lots of great records that don’t get noticed, but not a lot of mediocre records that do).

Get rid of the admin that keeps us focused on the pennies and turn attention to brilliant music that blows you away. It’s the best medicine for the problem.

And isn’t that why we all got involved in the first place?

My mind was blown yesterday. For some reason, while the EMI collapse hit me, and the V2 castration winded me, hearing that MUTE UK is winding down to 15 people (from many more) and leaving their long-stayed building on Harrow Rd for the corporate boredom of the EMI offices…that hurt. For the unaware: the Mute Building, architecturally and intrinsically was just another type of Mute release…a STUMM if you will…cold and concrete like a Fad Gadget record, while filled with warmth and expectation, like the inside of the cabin adorning the cover of Nick Cave’s Murder Ballads. Inside, the staircases were loudly wall-papered with the industrial sounds of Mute music, heading upwards to the Mute recording studio which shared the floor with music legend Andrew King (see the history of: Pink Floyd, T-Rex and The Clash) behind the Mute publisher’s chair. A one-stop-shop. Mute kingpin/hero Daniel Miller had mastered the art of breaking bands big while keeping to the ultimate in aural esthetics, with a team of people who worked so well to support a noble and winning cause.

The cause remains. And while Mute thankfully still exists, it will never be the same.

These are tragically exciting times. Labels are being completely redefined. For the major, it is about bailing out the ship with as many bodies as needed until they can float past the next stockholders meeting and pop hit. For the indie, the changes are more morphic, and undefined. Sub Pop, a corporate owned label with a simulated indie feel, is having huge success with the Shins. Last week, more than a handful of indie releases graced the Billboard 100. But for many labels, sales are ebbing and it is about cutting costs and getting ready for lean times. Record sales are getting harder to come by, and kids these days are pressing Jeff C’s RECORD button (see his last post) with and increased amount of ease.

So what is to become of the record label? I own one and have Muteish visions of working sucessfully with music that I love. I actually partake in several others as well. And my big questions are everyone’s questions: how can one get the physical CD sales back up? Is it worth while signing new talent? Since an indie label has the benefit of being flexible, how does one maximize on today’s opportunities? What are the ways of making money/growing the band/securing a future. Hard questions to be sure, had by an idiot, asked with sound and fury.

Unfortunately, none of the answers are simple, none of them defined.

Record labels are still relevant. Artists need them. Most, I find, need a structure to help with the making/manufacturing and marketing of a record. So they need to survive, albeit change. The deals between the artist and the label need to be redefined. It seems to me that the only way to work in the 21^st century is to go into business with the artist as a partner: less front end costs, more back end money making potential. The risk is bigger than it has ever been, and thus to survive, it needs to be levied as much as possible.

Some executives out there, like Steve Pross, think that record labels are almost purely promotional vehicles for the bands to grow their touring/manufacturing and publishing businesses. The concept for years has been that bands will not make money from their record sales and instead will make money from the momentum the sales incur (i.e. the touring, merch, etc). BUT WHERE DOES THAT LEAVE THE LABEL OWNER WHO MAKES MONEY LAST IN THE CHAIN?

It is my experience that the label owner is left with having to think “out of the box” (sorry for dropping that line, Celia) about how to increase the revenue stream cut short by the low sales expectations. I started by changing the type of deal I was doing. After, I redid the website and explored outreach tactics to the people who were already fans of the label. Then, I started a publishing wing, where we co-publish a certain amount of songs on every record, songs the artist gets to choose. Artists’ lawyers are generally fine with the deal, because the artist is free not to pick the potential hits. Meanwhile, the label gets to help the artist set up their publishing business and, now that I have grown it and hooked up with a bigger publisher-Bicycle music-gets to have the benefit of a new team pushing the recordings for new opportunities.

I have also started a download only section of the label, which allows me the flexibility to work with both known and unknown artists on a less-risk basis, but still allows me to grow the label brand and catalog (we have not even talked about branding, which is also so important). With friends, I am also working on high-end box sets that are set to appeal to a certain type of consumer.

I feel that the record label has to distance itself from being the focal point of the band’s career. Mark Geiger once discussed how the label is just one finger in a hand of the band, used to grasp a career; but for some reason, it has always been the label that must jump start the band’s various activates, more often than not, with money. There is always a time to press the MONEY button, but not too soon and, when done, with great care and thought. The record label SHOULD be responsible to the band for getting the record out there, making calls to the appropriate people, and supporting the band’s touring and other efforts through publicity and radio outreach and by always looking for an opportunity to present itself.

Indie stronghold In The Red records is a one man powerhouse that, for the most part, does all its marketing in-house. Some of the records do well (In The Red has an amazing brand identity within it genre, making all the releases do pretty well) and others do brilliantly. The reason is not because one marketing campaign was different than the other: the reason is that some music tends to stick better at a given time, an eternal fact that will never be understood or can not be counted upon.

Yes, record labels still perform a major service, but unless there is ample funding involved, I would dissuade someone from starting a traditional record label. The word traditional is key here. There needs to be a more three dimensional approach, which could include: PUBLISHING songs on a record, a DIGITAL ONLY platform within the paradigm, a MERCHANDISE platform that the artist and label can venture into together, a way of CHANGING THE MUSIC BUYING EXPERIENCE by bundling music with other related commodities, and finally a FORWARD THINKING, INTERNET EMBRACING, daily changing way of marketing records. And we have not even approached the concept of WHAT WE DO WITH THE CD FORMAT WHEN IT FALLS APART and HOW DO WE BEST APPROACH FOREIGN MARKETS IN THESE TIMES (panel, feel free to jump in).

The collapse of EMI, V2 and Mute simply demonstrate dramatically how the model is changing-not going away. The fact that indie labels such as Jagjaguar, In The Red, Kemado, Rounder and Drag City still exist prove the sustainability and prowess of the indie model. In these times, there is no room for decadence, high budgets, and lethargical movements. But there is room for new ways of doing things and taking different types if revenue streams and running them through a bigger river.

I am sure the other panelists will have much more to say, and rightly so the floor is theirs….

In the book “Exploding - The Highs, Hits, Hype, Heroes and Hustlers of the Warner Music Group,” Stan Cornyn brings us back to the Consumer Electronics Show of 1976 - the place and date where the electronics companies unveiled a tiny square orange button on the already ubiquitous portable cassette player.

Every kid in the country had a portable cassette player. And every kid in the country loved to crank his own personal soundtrack on the neighbohood basketball court. In my hood, BTO or Edgar Winter or Ted Nugent or that new song “Eruption” by some new band called Van Halen could be heard echoing off the blacktop at all hours. And every kid had to buy two copies of his favorite album: vinyl for the bedroom, and a cassette for the walking around times. They had no other option. And this double-down scenario was a boon for the record business.

Until the dweeby, greedy engineers at Nakamichi, Sony, Toshiba, et al, wheeled out a little orange devil: the RECORD button. The button was in-set on the ordinary PLAY button of the cassette player. And to every record company CEO, the RECORD button was like a nuclear launch button aimed directly at his year-end bonus. This little button packed one hell of a punch: it would allow people to steal music–anywhere, any time. And, long before the days of SoundScan, Big Champaign or BDS, the execs concluded that the RECORD button could erode, and eventually destroy, the prerecorded music industry. Now, all you had to do was buy the LP version of the new REO Speedwagon album, and tape it. No need to purchase the cassette version.

Music execs believed that the RECORD button was a Big Threat to Big Music. And so they stepped up interest in the shiny circular music data carrier being developed by the Philips Electronics lab in the Netherlands - the Compact Disc. The CD was meant to be the ultimate antidote to the cassette duplication problem. And it was, for a long time, but more on that later….

Far away from the executive washrooms of record honchos - on the south side of Milwaukee to be exact - my older brother, Scott, was making pause tapes direct from the airwaves of WMSE, the local college radio station. My brother would hover over the cassette player for hours - PLAY and RECORD buttons in the active position, his index finger covering the PAUSE button, ready to be depressed, ready to record - STEAL - a song. Right. Off. The. Airwaves.

Here’s the thing: from my brother’s pause tapes (many of which I still have), I heard, for the first time, some of the most incredible music: the Clit Boys, the Dead Boys, Die Kreuzen, Bad Religion, REM, Bauhaus, Modern Lovers, The Police, The Smiths and on and on….

Thanks to the RECORD button, I was introduced to, and fell in love with, Tones On Tail, Revolting Cocks, Love And Rockets, Jesus And Mary Chain, Shriekback, Violent Femmes, Gang of Four, and a hundred other bands that formed my musical framework. From ‘stolen’ music, I made sense of the world, and caught the music bug – big time.

Flash forward to today: thanks to another so-called dangerous threat to Big Music – file sharing and disc ripping - kids today are catching that bug. But today’s RECORD button is a bit different, and doesn’t require a stack of Maxell C90s.

Today, as we famously know, kids are sharing song files, ripping CDRs and treating the shopping mall music stores as if they are some sort of Byzantine vitamin shop. While this is surely a sizeable problem, and has undoubtedly cut into everyone’s slice of the pie, the function of falling in love with music has never been better. Or easier. I’m sure of that. And if kids are ‘stealing’ music from us – but falling in love with bands and songs, and making sense of their world via music - it is a massively good thing for all of us. We need people to keep falling in love with music. No matter what. No matter how.

And that is the music business that I suit up for every day.

Why am I a qualifying Idiot? My partner Peter Walker and I co-founded a label in 2004. We named it Dangerbird Records - after a Neil Young song from 1975.

I bet if I looked hard enough, I could find that song on one of Scott’s mix tapes….

I love music, I love being around artists who make it and I love helping those artists make a living, creating. I grew up in Oklahoma working in record stores from the age of 15 to my early 30’s. That’s how I met the Flaming Lips - and began an even longer and more intricate voyage in this crazy business of music. The leader of our illustrious panel is David Katznelson - he’s in a lot of ways responsible for where I’m at now. He was the guy who convinced someone at Warner Bros. to sign the Lips.

My name is Scott Booker, I’ve been lucky to have a band like the Flaming Lips to be my entrance into the record industry. When I started working with them, they were seasoned veterans of the road warrior variety. Over the years, I’ve worked with many bands/artists and few have had the will to continue on like the Flaming Lips. That will is something that you can’t teach a band to have - they either do or they don’t. When they do - you can move mountains… and we have.

I also run a company with two friends called World’s Fair. We manage record labels, much like you do bands, we run them for the owners.

Our roster consists of the following labels: bbe || bella union || definitive jux || echo || fabric || great society || jeepster || pias || rough trade || unfiltered

World’s Fair has been in existence for about three years. We are currently working with dozens of artists ranging from Midlake, El-P, British Sea Power and the Postmarks to artists like Alice Smith, J Dilla and Snow Patrol. We’ve had to become experts in how to sell different genres of music as well as selling catalog items instead of new material. It’s been quite a learning curve - but it’s been exciting. I’ve watched us grow from 6 people to nearly 20. That I think is why I do what I do - it’s fun to build a new business and even more fun to help promote artists and music I really care about. I’m not a musician and never will be - so this is my niche and it’s the best way I can serve society - by bringing art to our culture - and helping shape our culture by getting as many people as I can to care about this art.