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MUSIC BIZ INSIGHT #20 Power Reading for Busy Music Professionals Hope you're hungry! MUSIC BIZ INSIGHT is published for musicians, songwriters, managers, label reps, booking agents, entertainment attorneys, studio owners, music publishers, and all others involved in the music business. Its purpose is to help boost your business, find new markets, make the right connections, develop professionally, work smarter and improve your bottom line. "As a general rule, the most successful people in life are those who have the best information." Benjamin Disraeli Published bi-monthly by Peter Spellman, Director MUSIC BUSINESS SOLUTIONS: Turning Music Business Data into Useful Knowledge. Career and Business-building books, articles, consulting and more. P.O. Box 230266, Astor Station, Boston, MA 02123-0266, USA Phone: 978-887-8041 Email: success@mbsolutions.com Website: www.mbsolutions.com © 1997 - 2003, Peter Spellman, Music Business Solutions IN THIS ISSUE
FOOD FOR THOUGHT Marketing Jargon It's sometimes difficult to understand the difference between "advertising", "promotion", "publicity", and "public relations". Raleigh Pinskey, author of "The Zen of Hype" offers the following anecdote which beautifully and succinctly illustrates each marketing concept. A circus is coming to town and the circus administration puts up posters around town. That's advertising. They also decide to hold a mini-parade with clowns riding on a circus elephant through town. That's promotion. The elephant notices some particularly alluring vegetation growing in the mayor's front yard and tramples his fence and garden to get it. That creates publicity. The mayor and his wife cringe but decide to laugh it off and go on with the event. That's public relations. What kind of "parade" are you organizing? NEWS An Internet and music milestone was reached last month. As reported in Billboard, an artist whose music is distributed through web site TakeOutMusic.com has a song on the Billboard Dance Club Play chart, "Something ...(For The DJ's)" by Chris Cox and DJ Irene. The popularity of the cut is the first significant incident of an Internet-only artist causing a buzz in the non-cyber world. F E A T U R E WHAT'S GOING ON WITH RADIO? by Peter Spellman, Director, Music Business Solutions
You might be wondering why so many commercial radio stations sound alike. You can drive cross country today and your radio will sound the same in almost every state. Why? In the old days, radio stations were the broadcast equivalent of mom-and-pop stores--small local enterprises. That era ended in February 1996 with the Telecommunications Act, when (among many other things) Congress relaxed the rules on radio ownership. Now companies can own up to 8 stations and up to 35% of total ad revenue in a single market. Plus there was no limit to the number of markets you could enter. The new rules gave birth to national radio broadcasting companies.
FOLLOW THE MONEY U.S. radio revenue topped $15 billion in 1998. Radio advertising sales increased a whopping 13% last year according to the Radio Advertising Bureau. But mergers are responsible for the industry's real growth, as a few corporate giants buy out the smaller chains and locally owned radio stations. According to an industry report from Veronis, Suhler & Associates, acquisitions and mergers resulted in a 34.9% increase in revenues. The irony is, radio listenership keeps going down. According to a recent Duncan Radio analysis based on the Spring 1998 Arbitron ratings, radio listenership slipped slightly below 16%, the lowest point since 1981. That means that among the total population over 12 years old, six out of seven people are busy watching television, playing on the Internet, jamming to their CD player, doing anything but listening to the radio. Not unlike McDonalds, radio stations are trying to get people to try their product and to get the people who are using the product to use it more. It's called "carving out market share". As a result, commercial radio is no longer driven by great music and passion. Among industry insiders, radio is more and more about "market clusters", "format niches", and "identifying primary components of appeal." As media critic Todd Gitlin puts it, the organizing principle of corporate popular culture is the maximum REUSE of materials. So what gets played on mainstream country stations, for example, is a white, generic pop music with strong crossover appeal. Mainstream country draws one-quarter of its audience from classic rock, adult contemporary and news/talk listeners. That's the kind of crossover audience desired by radio advertisers, marketing and program executives. Safe and predictable. The radio industry is still chaotic because of the Telecommunications Act, which freed companies to acquire additional stations in the same city. The new law led to an avalanche of sales, with more than 4,000 stations changing hands in the past two years alone. In that same time period there have been more than 1000 radio mergers and some 600 radio owners have dropped by the wayside. The new, larger owners lowered costs, courted advertisers, standardized programming, and began making some real money for the first time in years. The result is a fewer number of programmers deciding what music to play and working under increased pressure to produce maximum profits because of the debt their bosses took on to acquire more stations. The 4 big players in radio now are: 1. Chancellor Media 2. Capstar Broadcasting Merged in July '99 = total stations: 465. Now called AM/FM 3. Jacor Communications 4. Clear Channel Communications Merged in May '99 = total stations: 430. Now called CCC. CCC recently made a bid recently to purchase AM/FM. This one's still being worked out. Merger, merger, merger...monopoly?
NEW REVENUE STREAMS AND THE NEW PAYOLA Radio's current buzz phrase is "new revenue streams" and the music industry is a very large and juicy target. As a result we are seeing the emergence of "pay to play" schemes: Labels are purchasing airtime from radio stations to create infomercials in order to advertise their product more directly. Some labels have also decided to buy radio stations in order to have complete control over music programming. Pay for play is done out in the open, with the money going to the station, not the deejay. And its all perfectly legal. Under FCC rules, such payments are OK, so long as the station identifies the song as paid for, usually with a brief announcement ("This record was brought to you by...") before or after the song. Back in April, Flip/Interscope signed an unprecedented contract with radio station KUFO of Portland, Ore., agreeing to pay $5,000 in exchange for 50 spins of Limp Bizkit's single "Counterfeit." Similarly, late last year A&M purchased a $237,000 marketing campaign for Bryan Adams' song "On a Day Like Today." Ominously, Adams' song fell off the radio charts after just one week, EXCEPT at four big-city radio stations. All four happened to be owned by the same broadcast group, Chancellor Media, which sold A&M Records the almost quarter-million dollar campaign. These arrangements reflect a fundamental shift of power in the music business. In the past, powerful record companies were accused of bribing deejays operating at small, independent radio stations to influence what songs were played. And payola was outlawed in the 1960s. Industry mergers have moved the balance of power to radio groups, which today have the clout to launch a song simultaneously in scores of markets across the country--or consign it to oblivion. It's a record-industry version of those infomercials you see on late-night TV. You may think you're hearing a song because a station believes it's going to be a hit, but what you're really getting is an ad. "This is not pay for play. This is pay for marketing," says John Madison, senior vice president of operations at Chancellor Media. Chancellor will soon also launch its own record label and sell music on the internet, says Madison. "We intend to turn radio show concerts into a profit center and we also plan to release ouR own compilation records," Madison said. "In the next year or so, there is a very good chance that we will begin signing artists to our own record label." "We have this giant distribution system in place. It only makes sense that we would consider expanding into the record business. Having our own record label would give us more control over the content we pump through the distribution channel." Oh Lord... GENRE SPOTLIGHT: (NEW) COUNTRY
INTRODUCTION The unprecedented crossover success of Garth Brooks in the early '90s was the sign that Country music had come into its own. A blend of new traditionalist sensibilities and the slick, pop-savvy crossover potential of Urban Cowboy, the new Country sound not only appealed to fans of hard-edged, honky tonk-derived traditional country, but also a wide variety of urban pop fans -- including both teenagers and maturing baby boomers. The music owed as much to the mainstream arena rock of the '70s as it did to country music -- Brooks himself was an avowed fan of not only George Strait, but also the Eagles, Kiss and Billy Joel -- which gave it a crossover appeal unmatched even by Urban Cowboy. Depending on the artist, New Country either sounded like an updated version country-boogie or twangy power ballads, which meant that it appealed to both rock and country audiences equally. New Country had an even more powerful impact on the country audience than Urban Cowboy did in the previous decade -- by the mid-'90s, New Country artists ruled the airwaves completely, leaving older artists in the dust. Given the ultimate result of New Country, it is somewhat ironic that its roots lay in the revival of traditional country values represented by such singers as George Strait and Randy Travis. During the mid-'80s, Strait and Travis -- along with singers like Dwight Yoakam and k.d.lang, who both functioned outside of Nashville's mainstream -- were two of only a handful of new vocalists that refused to bend to the pop inclinations of post-Urban Cowboy country radio, instead choosing to adhere to the traditions of George Jones, Merle Haggard and Lefty Frizzell. Both Strait and Travis were considerably successful, which led the industry to believe that there was an audience for harder-edged country. For a while, new traditionalists dominated the country charts during the latter half of the '80s, signaling that the genre was experiencing a kind of artistic rebirth. But it wasn't until the early '90s that this burgeoning movement broke through into the mainstream, in the guise of New Country singers like Clint Black, Travis Tritt and, of course, Garth Brooks. None of these three vocalists were traditionalists like Strait and Travis -- they adapted the rootsy tendencies of their immediate predecessors, melding them into a sound that demonstrated more rock and pop influences. Not only did the sound of New Country crib heavily from the rock industry, so did the image. No longer was the country industry working from rural roots, doing its best to hide the redneck past of their artists. Instead, it groomed a breed of attractive, good-looking vocalists that on the surface had very little to do with either the down-home appeal of George Jones and Hank Williams, or the rugged redneck image of outlaw singers like Waylon Jennings and Hank Williams Jr. New Country singers were clean, well-groomed and non-threatening -- ideal for crossover success. That crossover success happened when Garth Brooks' "No Fences" gained momentum in 1991. Brooks had enough cowboy in him to appeal to the new traditionalists, but also enough pop savvy to appeal to a generation of baby boomers weaned on the Californian country-rock of the Eagles and Linda Ronstadt. As a result, he became a pop music phenomenon -- "No Fences" went platinum 13 times over, while its successor, 1991's "Ropin' the Wind," spent 18 weeks at the top of the pop charts and sold over 11 million albums; in the process, it ushered in a whole new generation of country singers to the charts. There were both one-hit wonders like Billy Ray Cyrus and more substantial acts like Brooks & Dunn that followed Brooks to the top of the charts.
COUNTRY MUSIC MARKET TRENDS During the first half of the '90s, the New Country boom was extraordinary. In the previous decade, country artists were lucky if they went gold, but during the '90s, they regularly went multi-platinum. Country radio changed according to its new audience. Since there were so many new listeners to country radio unfamiliar and impatient with such older stars as George Jones, Dolly Parton, Willie Nelson, Johnny Cash and Merle Haggard, the old artists were removed from the play lists in favor of newer musicians. Soon, veteran artists were not heard on the radio at all, and their record sales dried up. In no time, edgier country artists were phased out of rotation as well. By the middle of the decade, New Country completely dominated the country charts and radio. Shania Twain, the biggest star of the mid-'90s, was produced by Robert "Mutt" Lange -- who made his name by working with heavy metal acts like AC/DC and Def Leppard, as well as new wave rockers like the Cars -- and her music appropriately resembled slightly rootsy AOR pop-rock. Though Twain's "The Woman in Me" sold eight million copies, it was the last of the country blockbusters. In 1996, the country audience declined drastically, partially because the music was becoming too similar, and partially because its fans had found other genres to listen to. True country fans listened to the edgy sound of alternative country-rock, while baby boomers found themselves leaning toward the adult alternative sounds of pop radio. By the end of 1996, the sales of country albums were approaching the levels of the pre-Garth days. It remains to be seen how the country industry will sort itself out. Last year Tammy Wynette died and Garth Brooks again proved his marketing acumen, selling 27 million albums by repackaging his old hits - twice. That was country music in a nutshell in 1998, a year in which the very rich got richer and everybody else fought for a smaller piece of the pie. "In Nashville, we have two businesses," veteran broadcaster Ralph Emery recently said. "We have the Garth business and the country music business. Garth is a phenomenon like we could not have imagined in the '60s and '70s - and part of the '80s. I think the marketing that has been done with him has beenunbelievable." When the final tally was done, 1998 country music sales were up as much as 12 percent. But that figure is deceiving. While Brooks and other superstars like Shania Twain had banner years, sales for other acts stalled or took a dip. "A lot of those mid-level artists were selling a million records a few years ago," said Jay Knowles, a staff songwriter at Sony ATV. "But now there's four or five that are selling 6 million records and everybody else is selling 400,000 or so." The problem is an old one.
COUNTRY RADIO Record sales are primarily the result of airplay on country music radio stations, which account for roughly one in four of all U.S. radio stations (about 2,368 of 10,394), by far the most popular format. The people who decide what music country stations play are getting more conservative as the radio industry consolidates (see this issue's feature on the state of commercial radio). There are 2500 mainstream country stations in the United States. Of that number, 400 are "reporting stations," major players that the trades recognize and who drive a significant percent of the country record sales. "If the programmers are doing their jobs, why do all the country stations sound the same?" To answer that question, return to the money trail. Listeners are important, but advertisers pay the bills. Radio is a frequency medium. Unlike television, where the typical user locks into one channel for a 30 or 60 minute time period, radio users drop in and out. They hit buttons and channel switch from song to song. They tune in when they get into their car and tune out when they reach work or home. The formulas that radio advertisers buy are based on reach (the number of people that a station can reach) and frequency (the number of times an ad is aired). An advertiser like Coke buys a schedule (18-24 commercials a week). They buy several stations in one city, different formats, different target markets, to reach the masses. The target demographic for country is ages 25-54. At least that's what the country radio chiefs want advertisers to hear. And advertisers are paying for frequency, the biggest numbers. In radio, that translates as, "how do you keep the listener from hitting the car radio button and tuning out each time a new song comes on?" In radio programming language: "How do you maximize the performance of your station? How do you maximize consensus?" In other words, how can we resist all the trends towards musical evolution and diversity and force the public into a media-created, least-common-denominator country sound?
LABEL CONSOLIDATION Label consolidation has also played its role in country's decline. Decca Records' shutdown in early '99 continues a Nashville trend of label closings that has been predicted -- even welcomed -- in many corners of Music Row. As the country boom subsided, many of the labels have faced tougher times. Among the country companies that have bitten the dust are Polygram-affiliated A&M Records, MCA firm Rising Tide Entertainment, Arista sister Career Records, Geffen-distributed Almo Sounds and Capitol sister Patriot Records, RCA sister label BNA Records was also scaled back, with the two labels under more central control. Other indie closings include Magnatone and Imprint. For many country music writers, fans, producers and musicians, consolidation has meant increasing conservatism. The more commercial success country has achieved, the further away it's gotten from both tradition and individuality. Mainstream country is mired in a mushy middle-right where advertisers and media conglomerates want it to be. If the music is disposable, who cares as long as it makes money? For those who love real twangy retro country or the cutting edge artistry of alternative country artists like Dave Alvin or Lucinda Williams, there's a new breed of roots country music that has emerged in the past three years. It's called "Americana" and it just might save country music from itself. But that's for another issue
COUNTRY MUSIC WEB HUBS General
Nashville-Specific
))) MARKET PLANNING ((( 5 TIPS TO HELP ENRICH YOUR MARKETING EFFORTS
Have you been running the same ad in the Yellow Pages for 10 years? When the ad rep from your local paper calls, do you say, "Give me the usual"? Have you been sending the same letters to your clients for a while now? I'm not saying there's necessarily anything wrong with any of these strategies. In fact, sometimes you should stick with a program if it's proven to work. Before you can make an informed decision to continue your current marketing program, you should consider every option available. The beginning of a new year is a good time to review your marketing strategy. Here are six tips to help you with this review. 1.Find time to strategize -- Set aside time each week to think about new ideas and initiatives for your company. Brainstorm with your staff or other business associates. Read business publications, visit web sites or go for a walk to somewhere you don't normally go. By challenging your mind and getting out of the daily routine, you will probably come up with creative approaches and new ways to solve problems, capture customers or just bring a better quality of life to your business. 2. Stay focused -- Know what you want, choose how you are going to get there and don't allow yourself to be distracted. Remember, the mind tends to follow what's in front of it. Share your vision with your employees, contractors and interns, and encourage them to adopt it as their own. Make sure you understand their role and the benefits they'll enjoy through their efforts. 3. Market in new media and keep the old -- Take the time to learn how to create a web site and get connected to the Internet. It's a great way to promote your business, to hot-link and be hot-linked to other companies and to conduct essential research. New software makes it possible to create a web site simply and easily. Remember, as you add new media to your marketing mix, don't abandon traditionally effective tools. One message delivered in multiple ways can grab the attention of customers and potential clients. 4. "Fusion" or "Affinity" marketing is the name of the game -- Partner with associated companies so that you can share information, clients and opportunities. For example, if you run a world music record label, think about cross-marketing with an exotic clothing store, a travel agency or world music publication. Link to each other's web sites and explore ways to market in traditional media as well. You'll increase the service and excitement you currently offer your customers. Build those relationships to build your business. 5. Stay abreast of the news -- Take the time to read newspapers, magazines and visit news and information sites on the Internet. Information is power and can affect your business by helping you to provide value to your customers, inspiring new ideas and leading to prospects. )))))) ILLUMINATING TRIVIA (((((( Did you know... ...19-year-old Barbara Streisand, auditioning for her first Broadway role, tottered uneasily onto the stage in an ungainly overcoat, spilled the contents of her handbag, scattered her sheet music across the stage, rushed to reassemble the pages, settled herself into something resembling a seated position and, finally, removed a wad of chewing gum from her mouth, sticking it under her metal chair before beginning her musical number. She then proceeded to show off the most dynamic voice to grace the American stage in a generation. After she left, the stage manager checked the bottom of the chair on which she'd been seated. There was not a speck of gum to be found. (By the way, she got the part). ))) BIZ SMARTZ (((
REDUCING CREDIT CARD FRAUD Reducing credit card fraud can save your company thousands of dollars. Here's a list of eight sure-fire strategies any entrepreneur can use to reduce credit card fraud, according to Audri G. Lanford, an Internet scams expert and co-editor of the newsletter Internet ScamBusters : 1. Take extra steps to validate each order. Don't accept orders unless complete information is provided, including the full address and phone number. 2. Be wary of orders with different "bill to" and "ship to" addresses. Require anyone who uses a different "ship to" address to send you a fax with their signature and credit card number authorizing the transaction. 3. Be especially careful with orders that come from free e-mail services, such as hotmail.com, juno.com, and usa.net. There's a much higher incidence of fraud from these services because it's easy for a scamster to open a free, anonymous e-mail account in another person's name and then send you an order using a fake e-mail account and a fraudulent credit card number. 4. Beware of orders that are larger than you typical order amount and orders requesting next-day delivery. Of course, some people have reasons for placing large orders or using next-day service - but you should still be cautious. Crooks don't care what it costs since they aren't planning to pay for it anyway. 5. Examine international orders carefully. Do everything you can do to validate the order before you ship your product to a different country. 6. If you're suspicious, pick up the phone. First, obtain the phone number that's listed with the billing address of the cardholder. Then call the cardholder so you can determine whether he or she placed the order. 7. If you have the misfortune of being scammed by a credit card thief, contact your merchant processor immediately.
MONEY-SAVING WISDOM...
Did you know that MBS offers both music career and business consulting and career-building publications? Check out the MBS website for lots of other resources. Discover some powerful tools and leads to help you grow your music career and business! TO SUBSCRIBE to MUSIC BIZ INSIGHT: To subscribe just send email with the following message in the body, "subscribe" to insight@mbsolutions.com It's not an autoresponder so feel free to include any other comments, ideas, suggestions, etc. you may have. About the Publisher PETER SPELLMAN is Director of MUSIC BUSINESS SOLUTIONS, a business and marketing consultancy to the music industry, and Director of Career Development at Berklee College of Music, Boston. He is the author of several books for music entrepreneurs and teaches music industry courses at Northeastern University (Boston) and the University of Massachusetts (Lowell). A musician since he was ten, Peter continues to spin riddims in the improvisational collective, Friend Planet and sing Cat Stevens' songs to his kids every night before bed.
BLOOM WHERE YOU'RE PLANTED! Quote of the Month-- "When spider webs unite, they can tie up a lion" --Ethiopian proverb E-mail: success@mbsolutions.com © 1997 - 2003, Peter Spellman, MBS Business Media, www.mbsolutions.com P.O. Box 230266, Boston MA 02123-0266 978-887-8041 Rise up!
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