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.

When I think of the music industry, I think of 2 great works of literature: “El ingenioso hidalgo Don Quijote de la Mancha” written by Miguel de Cervantes Saavedra and “A Confederacy of Dunces” by John Kennedy Toole. Like Ignatius and Don Quijote, I feel that many of the events, cultural phenomenon, human frailties and technological advances around the music industry are imagined windmills brought by what we are led to believe or just blindly accept as fact.

The truth is all of us have the capacity to change great things. I have witnessed the overthrow of a supposed invincible imperial and ruthless dictator by “mobs of nuns and priests, parents wheeling kids on strollers and university students”. I also remember quotes like: “Who would ever need a computer in their homes?”, “Why would we ever need more than 640K in RAM?” and “Illegal file sharing would never happen”.

The fact is we have the capacity to lead change. It does not take a Steve Jobs to tell us that DRM is wrong or that DRM never really prevented illegal file sharing. To focus on DRM as one of the fundamental problems of the music industry is short sighted. Jonathan Swift seemed to be talking about the music industry when he said: “When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him.” I believe that the true genius is in the wisdom of the masses and the dunces are those who continue to confederate to thwart the inevitable sea change in the music industry.

On a self promotion note, I am the CEO and founder of GoodStorm.com. Our tagline is: “Capitalism Done Right” . In the spirit of GoodStorm, we will be unveiling new business models that we hope will positively affect the future of the music industry. I invite all of you to watch our launch during SXSW music week. Because you’re all part of genius of the masses, you’ll be able read between the lines in our current website: http://goodstorm.com . I think the dunces will not be amused.

This will be a great discussion. Stay tuned.

Of course, I too am an idiot for not getting out when the golden parachute opened its doors to me. For not choosing my lifestyle above my passion. For ignoring the path of so many of my favorite associates,who now yearn to find a life in music that doesn’t exist anymore.

I stand in a pretty odd place - having had 14 years in independent label life, and another 14 in corporate label life. I am reminded daily to adjust my thinking to the events of today, not the past.

The future belongs to the youth, the adventurers, the innovators, the creators and the fools.

I run One Little Indian for North America – a label that defies definition and is fiercely independent. There, it’s all about the music.

I also write, produce and record a weekly radio show on KCRW (On The Beat). The radio show is about the record business.

I sit in the Idiot’s box with some pretty great talent.

Reading the Billboard headlines these days, for many of us, is like reading a pre-death industry obituary. Sales are down (hell, it looks like iTunes, the digital savior, is even taking a dip right now). We find out that it is harder for bands to tour, making it harder for bands to be written about and discovered. Rent and gas and everything else is going up up up and meanwhile marketing costs, if anything, are on the rise as well. The music industry seems like an elephant-sized monkey breaking the backs of those who it should be inspiring and accepting: those who work with music because of the LOVE of music, who care and respect both the idiom and the artists who create the goodness.

Needless to say, I…a compulsive record man…reared by the last wave of those behind the classic music industry renaissance…I many times feel like and IDIOT. Why bother even following up on the music heard and seen at the random club on that random night…even if it produced goosebemps in the shape of Mount Rushmore’s Presidents? What is the point of engaging in this constantly morphing and black-lunged industry?

But there are some facts: 1. Artists more than often, need to have an outsider helping with the creation and marketing of their art. They need a business plan. 2. Any economist will tell you that the best time to invest in an industry is at its darkest and most uncertain hour 3. With the ability to follow trends with agility and forwardthinkingnes, it has been shown that certain models work in the short term and might even have a potential for survival in the long term.

Last year there was a dark moment where I felt like a complete idiot. It was between releasing one record that I thought was genius and another record that was coming out shortly after. The label was getting more known and some of the bands were growing, but there was this voice…that same voice present in The Rocking Horse Winner…the one that breathed the words NEED MORE MONEY…and it sat on my shoulder and bit my ears. Those words can be damaging…almost heartbreaking. But they also can be ass kicking…in a good way…and some of the ideas and goals I came up with in that time changed the way I do business and reinvigorated my industry drive.

This is not some kind of bullshit self help seminar. There are no clear answers or formulas for success. But part of my thought process was that, now more than ever, all of us idiots who cut and scrape around this sick beast called the music industry should unite with our ideas, motivations and frustrations. Discuss the environment and seek to discover a way out of our dessert to find a land of milk and honey. My personal answer was to seriously diversify my business model, while maintaining a roster of musicians that I love. Other people I have talked to have different ideas.

This will be the forum for discussion, a discussion led by mavericks who have decided to re-invent the paradigm instead of giving up or selling out (unless a form of selling out permits buying in as well). Thanks to South By Southwest, which is admittedly one of the biggest meeting places of industry minds in the world (the biggest in America for sure), the energy of the conference can be fueled into maybe the most important discussion needed to be had today: how to survive, thrive, and be happy working with the universally loved art form called music.