MUSIC BIZ INSIGHT #32

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

Please feel free to redistribute with above credit and copyright notice.

IN THIS ISSUE - MBI #32

• NEWS & VIEWS - JINGLES JANGLED...EUROPEAN INTELLIGENCE...HOPE FOR SMALL WEBCASTERS...RIGHT ON, DANNY!...
• FEED YOUR BUSINESS PLANS: STATS FROM ENTREPRENEUR MAGAZINE
• ILLUMINATING TRIVIA: RIPPED OFF SOUL MAN
• FEATURE: WHEN TO HIRE HELP
• DE.CONSTRUCTING THE MUSIC BIZ

))) NEWS & VIEWS

JINGLES JANGLED Hold the pickles, hold the lettuce...hold the music. "Like dinosaurs," writes Brian Steinberg in The Wall Street Journal, "jingles once roamed the earth." But now, shorter ads seem to be killing them off. Spots that once ran 60 seconds now more typically run just 30, or even 15.

Because of that, "jingles don't have time to develop, just as a piece of music," comments Eric McClellan of ad agency Temerlin McClain. "It doesn't matter how many times you run it. It matters how much you can establish in 30 seconds, which isn't an awful lot." That may explain why Pizza Hut recently pulled its jingle, "Where's the cheese at?," replacing it after a one-week run with a "more routine commercial simply showing pictures of food."

Then again, a Pizza Hut spokesperson says the goal, actually, was to first capture attention with the jingle, and then "hit the consumers with pictures of food, a method that has worked in the past." But, it's true. Nowadays it seems that if there's music at all it consists of "familiar tunes from rock 'n' roll warhorses like The Who or Led Zeppelin, instead of ... original music and lyrics." Or, in more extreme cases, the concept of the jingle has "devolved" (or evolved?) "into tiny sound signatures, like the near-ubiquitous four-toned chime that alerts viewers to the presence of Intel Corp's Pentium chips inside a computer disc."

EUROPEAN INTELLIGENCE A Dutch appeals court ruled that the maker of computer software that lets people download music, movies, and other copyright protected material isn't liable for copyright infringement. The court overturned a judgment against KaZaA, which was convicted last November of violating copyright law. Because the shared files contain copyright-protected material, KaZaA was ordered to block users from downloading songs. But the Amsterdam appellate court quashed the ruling, saying that the users of KaZaA's Media Desktop software were responsible for the copyright infringement, and not the maker or distributor of the computer program. "In so far as any infringing use is being made by the means of KaZaA, these acts are committed by its users, not by KaZaA," the ruling said. It also is said that the KaZaA program wasn't exclusively designed to download copyright protected works. KaZaA called the ruling and "important victory" over music copyright organizations like the Buma/ Stemra that lodged the case in the Netherlands. "This is not only an important victory for KaZaA, but for the entire Internet," KaZaA chief executive Niklas Zennstrom said.

HOPE FOR SMALL WEBCASTERS A new bill introduced by Representatives Jay Inslee, Rick Boucher, and George Nethercutt would exempt businesses with annual revenues of less than $6 million from the recently approved music royalty of $.07 per song, per listener. Webcasters, including many radio stations affiliated with colleges and universities, had protested the royalties, saying they would put the stations out of business. The Internet Radio Fairness Act would shield most stations without connections to larger companies from those royalties. Since the royalties were approved, many small stations have stopped streaming music or have significantly changed their programming to minimize their liability for the royalties, which begin in October. Since some of the coolest music is coming out of these small stations, it's crucial to keep them alive. Write your congressman this week!!! (CNET, 26 July 2002).

RIGHT ON, DANNY! In a separate development, Danny Goldberg, prez of Artemis Records, says the label will issue royalty-free licenses for its content to webcasters. The New York-based independent record label will waive the royalty payments that would otherwise be due it for one year beginning Aug. 1, 2002. "In allowing free use of our catalog at this early stage, we hope to stimulate the Internet radio format," said Goldberg (Billboard, 8/10/02).

HOLY MARKET RISE! Sales of contemporary Christian and gospel music rose 18 percent over the first half of 2002, marking six straight quarters of growth, announced the Christian Music Trade Association (CMTA). (PR Newswire, 7/11/02).

Hmmmm...STRANGE BUT TRUE:

Fat chance and slim chance mean the same thing.

))) FEED YOUR BUSINESS PLANS

STATS FROM ENTREPRENEUR MAGAZINE (JULY 2002)

• 62% of U.S. adults own a cell phone
• 43% of small businesses say their sales leads increased last year as a result of e-mail marketing promotions
• 64% of online consumers say they sometimes or frequently don't complete online transactions due to poor image quality
• U.S. retail e-sales were $33 billion in 2001, accounting for 1 percent of total retail sales for the year
• Small businesses create 75% of new jobs
• 25% of PDAs purchased in 2001 were either bought by companies or by employees who were reimbursed by companies
• A mere 29% of consumers say they trust e-commerce Web sites, compared to the 47% who claim to trust the federal government
• By 2006, $25 billion in e-commerce transactions is expected to be generated via mobile phones
• 71% of shareholders want the companies they've invested in to e-mail them important news immediately
• Venture capitalists invested $6.2 billion in companies in the first quarter of 2002, down 24% from the previous quarter

))) ILLUMINATING TRIVIA

Did you know?...

HE'S A (RIPPED OFF) SOUL MAN Testifying before California's Senate's Judiciary Committee, singer Sam Moore, formerly of Sam and Dave, recalled learning in his 50s that his retirement fund would be $67 a month because his record label never reported income to his pension fund.

))) FEATURE: WHEN TO HIRE HELP

As your label or music company grows you'll inevitably need to hire some help. In order to assess the best time to embark on this new stage of development, use the following guidelines to light your way.

1. When the time you could spend marketing or earning income instead of doing the tasks involved covers or exceeds the costs of the help. For example:
   • Hiring someone to design and send out a direct-mail piece that will generate more business for you than the cost of the help to produce it.
   • Hiring a publicist to do public relations so you can take on an added project that will more than cover the fee of the publicist.
   • Hiring a computer consultant to train you on a new software program when trying to learn it yourself will eat away hours of time you can best spend elsewhere.
2. When the cost of hiring the staff would be self-liquidating. In other words, when the person's activity would generate as much income as, or more income than, you would have to pay them. For example:
   • Hiring someone to sell your products or services.
   • Hiring a service to take your calls when losing one call because no one was there to answer a potential customer's questions would more than pay for the services.
   • Hiring someone to publish a newsletter for you that will draw in more business per issue than it costs to produce the publication.
3. When paying someone else would cost you less than doing it yourself. For example:
   • Contracting out to print one thousand copies of a flyer instead of printing them out on your laser printer.
   • Hiring someone to oversee the production of a brochure that would cost you more to sub-contract to multiple individuals.
4. When you are bringing in enough income that you can cover the costs of hiring help to increase the quality of your life. For example:
   • Hiring someone to clean your home/office.
   • Hiring someone to do your filing, do your mailings, or develop your database.

from, "How to Start & Grow Your Own Record Label or Music Production Company" by Peter Spellman. Further info: http://www.mbsolutions.com/books/

))) DE.CONSTRUCTING THE MUSIC BIZ

WHAT THEY SAY: "Our listeners are going to be able to listen to as much music as they want, when they want." -- Michael Bebel, chief executive of Pressplay, the Sony/Universal online music subscription service, on the "significant stride forward" in what Pressplay offers consumers (CNN.com, 8/2/02).

WHAT THEY MEAN: "Our listeners are going to be able to listen to ONLY the music we put out for $10 per month. BUT, they can ONLY LISTEN to these tracks. For $8 more each month they can actually TRANSFER ten whole songs from our limited selection onto a blank CD or other format, and then pay only $2 for each additional song they may want to transfer from our limited selection. So if you want to download and burn, say, two songs per day, your Pressplay subscription will cost you a measly $68 per month."

WHAT'D THEY SAY?: "Our listeners are going to be able to listen to as much music as they want, when they want."

TO SUBSCRIBE to MUSIC BIZ INSIGHT: send email with the message in the body, "subscribe" to success@mbsolutions.com

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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--

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

Please feel free to redistribute with above credit and copyright notice.