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MUSIC BIZ INSIGHT #27 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 Written and published bimonthly by Peter Spellman, Director of MUSIC BUSINESS SOLUTIONS: Turning Music Business Data into Useful Knowledge. Career-building books, articles, training, consulting and more. P.O. Box 230266, Astor Station, Boston, MA 02123-0266, USA Phone: 888-655-8335 Email: success@mbsolutions.com Web site: http://www.mbsolutions.com © 1997 - 2003, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice.
Watch for the 11th issue of MUSIC CAREER JUICE, coming mid- September to all MUSIC BIZ INSIGHT subscribers! HOW TO DEDUCT UNSOLD INVENTORY. Did you press 1000 and sell only 200? Unsold inventory of CDs, tapes, sheet music, instruments, and related products can be worth a federal income tax deduction when a business donates them to charity. Regular (C) corporations may deduct the cost of the inventory donated, plus half the difference between cost and fair market value. In other words, deductions may be up to twice cost. S corporations, partnerships, and sole proprietorships earn a straight cost deduction. A free guide is available that includes step-by-step instructions on the donation process, as well as a formula for calculating your company's potential tax savings. To receive a copy, call the nonprofit National Association for the Exchange of Industrial Resources: 800-289-4551. ON SECOND THOUGHT... Why people most often abandon online transactions, from a survey of approximately 1,000 consumers (Since each respondent could mark more than one reason, the percentage will not total 100 percent.)
My forthcoming book, "THE MUSICIAN'S INTERNET: ONLINE STRATEGIES FOR SUCCESS IN THE MUSIC INDUSTRY" (due out from Berklee Press this winter) explores how musicians, bands and songwriters are using the Net to create success for themselves "under the radar", that is, outside the headlines of the musical industrial complex. What follows is excerpted from chapter one of that book. It's meant to be inspirational, especially in light of this past year's demoralizing battles fought around music industry and Net interests. I feel the Net is enabling the rise of the "musician business" right along side the "music business". This book chronicles some of this story and provides the tools and resources for you to create Net results too. Enjoy! CH. 1 - NET BASICS The Internet is the fastest-growing communications network on the planet and the most effective at delivering multimedia content globally. In essence a network collapses distance. From my desktop in Boston I can connect with a guitarist in Zaire, a promoter in Australia and a fan in Poland simultaneously. For musicians, these developments bring tools to their cause that allow an extended reach on a playing field growing increasingly more level and accessible. On the Internet you can appear side-by-side with multi-million dollar companies twenty-four hours a day, seven days a week, accessible by tens of millions of people around the globe. What makes the Internet especially suited to the music community is the navigational and viewing tool called the World Wide Web. Some have described the Web as "the Internet on steroids". Why? While the traditional Net (say from 1969-1992) was primarily a black & white text-based system, the new Net (via the World Wide Web) opened the door to full-color graphics, Cd-quality sound and real-time video. Gene deRose of Jupiter Communication offered this insightful comment on the possibilities of the Internet for music: "For the music industry, the Net is a blender that will shatter and enmesh the compartmentalized mini-industries that are dominated by traditional type cast players. Today, the business and logistical dynamics of concert tours, TV and radio stations and record sales are entirely separate. But over time, the Internet will render, as artificial, the distinctions we see today between performance, broadcast and distribution and this will have dramatic implications." The blender image is an appropriate one and will reappear in this book again. The Internet turns every owner of a computer, a modem, and a telephone line into a publisher, a radio station, and soon enough, a TV studio. As Gareth Branwyn comments in his fabulous Jamming the Media, "A personal computer, bought at your local Akbar and Jeff's Computer Hut, can now be wired up to act as a full-color publishing house, a broadcast-quality TV studio, a sound recording studio, or an island in the digital oceans of cyberspace." Hey folks, we're talking 'bout a revolution! Personal and commercial empowerment at its finest. Here are some statistics regarding the Internet circa mid-2001:
It is one of the great historical ironies that the Internet arose out of a Dr. Strangelovean plan to create a communications system that could survive a nuclear holocaust. What was to have been a communications system for the surviving elite of a military-industrial complex has mutated into a subversive neo-democratic (more precisely, anarchistic) cyberculture. The unique technological character of the Internet has endowed it with a fundamentally subversive nature. It is not subject to privatization, centralization, or control and therefore stands in direct opposition to the historical dynamics of corporate capitalism. This, we will see, is fundamental to understanding the effect the Internet is having on the traditional music business. Needless to say, we are not merely experiencing a brief shudder in the economy. On the contrary, the organizational structures of the last century are being torn apart. We are in the middle of a global restructuring of the economy that calls for relentless intelligence, agility, and creativity. And Internet technology is a primary driving force of this restructuring. DIGITAL DEMOCRACY On a grassroots level the Net is opening up vast possibilities for anyone with a bright idea. With the Net, the information explosion of the past few decades has finally found a technological partner. Publishing in all its forms has been revolutionized by the Net. It's often been said that freedom of the press belongs to those who own one. The Net enables everyone to own the press. Rather than competing with other media outlets for the public's attention, the media is suddenly competing with the public itself. Individuals can decide on their own what's important and what's not, set up their own information "filters" (rather than rely on the editorial judgment of faceless media conglomerates), and get closer to sources of information than ever before. As Chuck D (from the rap group Pubic Enemy) writes in the Forward to Bruce Haring's, "Beyond the Charts," 'The Internet makes it possible to get the art from the artist to the public with as few middlemen as possible. For the first time, musicians are able to have an artist-to-world contact point.' Thanks to the Internet's evolution, web sites are becoming their own self-contained promotional vehicles, and every media and marketing outlet that was previously closed off to the artist can now be transplanted to the artist's site. This means artists and indie labels can, and do, have their own radio stations, their own performance venues, their own video channels, their own magazines and their own music stores, all centered on a desktop. Take Chris Florio, for example. After graduating from Berklee College of Music in 1984, Chris played any gig he could find, but always felt the constraints of the performer's erratic income syndrome. "This was an extremely fun time but I never had any money and I was unable to put enough time and energy into my own music because I lacked the capital to record, buy equipment and put large shows together." Finding he had an aptitude for music technology, Florio developed his digital music chops and began taking on corporate clients needing CD-Rom and DVD projects done. It was a good education but lacked the creative challenges Florio yearned for. Then the Internet hit. It was like a thunderclap in Florio's ears. "I realized that by using my computer skills and leveraging the Internet, I had everything available to me at home to do the work I wanted to do and get it out to the world." Taking some of the cash he earned doing corporate work, Florio converted the first floor of an old Victorian house and equipped it with a 24-track digital studio, G3 and G4 Macs, a couple of DV cameras and a projection system. "In this relatively small space with a relatively modest investment, my collaborators and I are able to compose, rehearse, record, edit, mix and perform music. We can shoot video, create and edit visuals and animation which can be projected during performances, recorded to video or burned on to DVD discs." Once the work is produced, "it can be broadcast onto the Web using QuickTime streaming." Florio muses on the impact of the Net on his work: "Instead of having to convince an executive at a large record company that people will want to buy my music, I now have the tools to get my music directly to anyone who is interested. Only a small percentage of them have to like it enough to make a purchase in order for me to be able to continue to do it. This freedom to control all parts of the production and distribution process is truly a revolution." Part of the revolution mentioned by Florio is the opportunity to expose music to a wider and wider audience faster and with more creative energy than ever before. Whereas a handful of radio conglomerates may have dictated which songs got exposure in the past, there are now thousands of music web sites that are also exposing people to a variety of music unheard by the vast majority for many years. The Net presents the opportunity also to nurture artists who may not have mass market appeal, but who can appeal to narrower but enthusiastic audiences. Such artists as Nick Currie (aka, Momus), Kristen Hirsch, Prince, Aimee Mann, Jonatha Brooke, Roger McGuinn, Christine Lavin and Todd Rundgren have each galvanized their fan bases into support vehicles for their careers. Hundreds of others are doing the same, and their numbers grow daily. Breaking the band Korn was something the band attributes to their grass root efforts on the Internet. Korn's manager, Jeff Kwatinetz has said, "Many label people do not understand how we did so well... and still don't understand. He continued: "The thing that makes the Internet so powerful is the control of information. Record companies love to control information... but by using the Net, managers and bands can find out their own information." For instance, he said bands can now go back to the record companies and say, "Here's the single we want, and here's our own research to back that up." Information empowers people and artists are using this power to leverage better deals and strategies for themselves and their teams. Distribution has always been the weak link in the chain of independent music. Currently, if you want to get your music into every record store in the nation, you've got to have a record contract with a major label, or at least a contract with an indie that's distributed by a major. This seriously limits who makes it into record stores. But, if you set up your own jukebox on the Internet, and spend some time promoting yourself in the right places, you can attract a potentially international audience. If people like what they hear, they can order it directly from you, either via conventional mail or over the Net itself. Many artists have decided to use the Net to market their music and forego record company involvement altogether. For example, Canadian alternative rockers, the Tragically Hip have repeatedly failed to break into the U.S. market, so the band left its U.S. label, produced its own Cd, and sold it through online retailer, Music Boulevard. Only 15,000 Tragically Hip Cds were sold, but half of the proceeds went to the band, about four times the standard artist's royalty. Back in August of 1997, well before the world was talking about music on the Internet, Prince - then known as the Artist Formerly Known as Prince - made an odd announcement. Recently released from his recording contract with Warner Bros., he declared that he was going to sell "Crystal Ball," his upcoming five-CD set, over the Web. At the time, it was easy to see the move as yet another eccentric twist in the career of a musical maverick. Today Prince seems like a visionary, not simply because he was the first major pop star to sell an entire album on the Web, but also because he has devoted so much of his career to fighting the recording companies' stranglehold on the distribution of music. It's now possible to see these actions for what they were: some of the first shots fired in the war against the recording industry, a war that continues to rage among fans, executives, and artists, with controversies over copyright, Napster, and CD price fixing. Though Prince's sales have come no where near those when he was at Warner Bros., he nets more per record than before and is very happy to finally have full control over his own recording career. "I am the creator of the product and now I'm dictating the terms." Besides individuals, the Net is also revolutionizing the way companies do business. Business is all about money and ideas. Anything that gets in the way of marrying the two - such as a middleman - makes business slow and inefficient. That's why the Internet is drubbing the old economy: it's hyper-efficient - fast, open, and direct. And it's cutting the middleman out of many businesses. This makes the Net a good match for entrepreneurs. If you're launching a company, you don't need to hire a focus group to try out a product concept - you can test it with an online newsgroup. You don't need to hire a lawyer to do a patent search or incorporate your company - you can do both on the Web. A well-designed presence on the Internet can bolster a startup's market image, helping it to appear much larger than it really is. A professional Web site is the great equalizer. It gives a company a much more substantial market presence than it could ever achieve through traditional advertising or distribution channels. END BTW, THE MUSICIAN'S INTERNET will be a "hypertext" book, meaning it will have a complementary web site where more net success stories will be shared and updates provided. Please send your own stories or ones you've heard of to me as they develop. It's free publicity for you and inspiration for your fellow musicians!
Did you know?... ...that the Mamas & Papas made their breakthrough with a song ("California Dreaming") first recorded by Barry McGuire; in fact, they used the exact same backing track as McGuire, just erasing his vocals and adding their own.
))) BIZ SMARTZ TRACKING BUSINESS TRENDS To track emerging trends that can affect small businesses in general and your business in particular, you need to stay informed. To do so:
TO SUBSCRIBE to MUSIC BIZ INSIGHT: send email with the message in the body, "subscribe" to success@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-- "Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity. But the dreamers of the day are dangerous men. For they may act out their dreams with open eyes, to make it possible." -T.S. LawrenceWritten and published bimonthly by Peter Spellman, Director of MUSIC BUSINESS SOLUTIONS: Turning Music Business Data into Useful Knowledge. Career-building books, articles, training, consulting and more. P.O. Box 230266, Astor Station, Boston, MA 02123-0266, USA Phone: 888-655-8335 Email: success@mbsolutions.com Web site: http://www.mbsolutions.com © 1997 - 2003, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice.
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