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MUSIC BIZ INSIGHT #38 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 - 2004, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice. SPELLMAN ONLINE! If you"re at a crossroads in your music career and are looking for new ways to express your musical desires, then consider signing up for my online course, "The Self-Promoting Musician." Built from my book by the same title, this 6-week journey will help you discover your particular niche in the biz and then build a career marketing plan from it. You"ll also get plenty of individual attention from yours truly. Sign up now! Get the skinny at berkleemusic.com. APPLE’S RAZORBLADES Imagine this: Microsoft accusing Apple of limiting consumer choice! That's what happened after Apple announced a "surprise alliance" with Hewlett-Packard that will make every HP personal-computer compatible with Apple's digital devices, reports John Markoff in The New York Times (1/19/04). For the moment, "digital devices" is pretty much tantamount to saying "Apple's iPod," but over time it will likely mean any number of "i-Pod-style" devices ... "whether for music or other media" it "may create in the future." Significance is, Apple has "managed to inject" its DNA into the PC world and Microsoft apparently does not like it one single bit. The larger story, however, may be that Apple is leading a trend into a "post-PC era in which silicon, not software, will be king." If Apple gets its way, the traditional (i.e., Microsoft) model in which hardware is sold at a loss and profits are made on the software will be replaced by a new approach that is exactly the reverse. Apple's iPod is the test case for this new approach -- and a highly successful one, so far. In Apple's fiscal quarter of 2004, it sold a quarter of a million iPods for about $400 each, in addition to some 30 million songs for about 99 cents each. Apple ceo Steve Jobs has made it clear that profits are made on the hardware, not the software. So the old razors-and-razorblades notion that you lose money on the "razors" and make it up on the "razorblades" has effectively been scotched by Apple. Some observers see this new reality as "likely to bring wrenching changes to the technology world, largely dominated by Microsoft for the last decade. Richard Wallace of Electronic Engineering Times recently wrote about the implications of Apple's new business model: "The irony is that while software gets the glory, it's silicon that's at the heart of the industry's next darling..." He went on to buzzword that "darling" using an intriguing term: Pervasive Media, which he defined as: "... the electronic extension and expansion of the human senses through the ubiquitous presence of intelligent software and silicon systems." Yeowzer. NIRVANA NOSTALGIA Big news out of Seattle -- grunge is back, reports Chris Nelson in The New York Times. Both KNDD-FM (otherwise known as "The End") and KYPT-FM (previously known as "The Point", but henceforth as "K Rock") announced format changes to "classic alternative," which is the Generation X equivalent of the "classic rock" formats foisted upon baby boomers back in the mid-1980's. The changes are considered significant because these two stations are believed to be "bellwether outlets." Says "Radio and Records" columnist Max Tolkoff: "For them to shift in this direction is like the shot heard 'round the world." And so it's out with the "rap rock" and "modern metal" bands and in with the likes of "Nirvana, R.E.M., Weezer and Beck, as well as predecessors like the Clash" and Johnny Rotten's old band. Some so-called "retro-alternative" bands like the White Stripes and the Strokes "will be thrown into the mix" as well, to keep those graying Gen-Xers feeling young. Oh, dear. Emphasis also will be placed on matching playlists with locales, so that Seattle will hear more Alice in Chains and Soundgarden, for example, while Southern Californians will be treated to more Offspring and Bad Religion. The thinking behind "classic alternative" is in part driven by fresh competition from "satellite radio and TV, along with the internet." It also has to do with alcohol advertisers, who have a vested interest in raising the average listening age for rock stations. Both the Beer Institute and the Distilled Spirits Council have revised "their self-imposed advertising guidelines," requiring advertisers to restrict media buys to stations reaching audiences that are "at least 70 percent over the age of 21, instead of the previous 50 percent." Max Tolkoff of Radio and Records thinks the net effect will be "less-exciting" radio that gives short shrift to new music, just like the "album-oriented rock stations of the late 70's." Of course, "being a compelling station and a successful station are not always the same thing." As Max puts it: "No one will go broke playing Nirvana..." MORE DATA, BUT NO LESS PAPER A study by the University of California at Berkeley shows that during 2002, 5 billion gigabytes of data was generated around the world. That amount, which is the equivalent of about 800 megabytes per person, is enough to fill 500,000 U.S. Libraries of Congress. The university conducted a similar study in 1999, and the new results indicate a 30 percent rise since the first study in the amount of stored information. The amount of data stored on hard disk drives was up 114 percent from the earlier study. According to Peter Lyman, a professor at UC Berkeley, those involved in the 1999 study expected that use of film and paper would drop as users moved those media into electronic formats. Although film-based photographs have dropped 9 percent since 1999, paper documents, including books, journals, and others, have grown by as much as 43 percent. Lyman said that much of the content is accessed on computers, but users print it out. RANDOM FACTOIDS
Did you know...? Ahmet Ertegun sold Atlantic Records to Warner Bros. in 1967 for about $17.5 million and then sought to buy it back a year later for $40 million. (from "Exploding" by Stan Cornyn) ))) DEDUCT FUN FROM YOUR TAXES What"s even better than spending wonderful weekends and evenings out on the town? Legitimately deducting the costs from your business taxes. You can do this if you have your own business (even if it is only a sideline) and it shouldn"t increase your risk of an audit. MEALS & ENTERTAINMENT You can deduct half the cost of meals and other entertainment that has a business purpose. There is no limit on the amount that can be deducted, and receipts are not necessary for expenses of $75 or more. IRS requirements
Caution: All five items must be recorded in a timely manner near the date on which the entertainment occurs in order for the deduction to be allowed. HOME ENTERTAINMENT Expenses incurred while entertaining at the home are among the most overlooked deductions. The IRS considers your home conductive to business and costs often are less than the $75 minimum for receipts. Regulations don"t require you to spend a specific amount of time discussing business, so it is easy to qualify everyone attending an event as a business guest. Example: You invite a guest and his/her spouse to your home for a dinner party, during which you have a one-minute discussion with the guest about obtaining referrals for your business. This lets you deduct half the cost of entertaining both the guest and the spouse. Large parties can make it difficult to talk business with every guest and record each conversation in your diary. Better: Demonstrate a business purpose for the party by announcing it in the invitation and having some form of display showing a business intent or discussion. Example: Celebrate your businessős anniversary, and put up a business-related display. For proof, take pictures of it with the guests milling around. Also, save the invitation.
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 PublisherPETER 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-- "A candle loses nothing by lighting another candle." - James Keller, founder of The Christophers 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 - 2004, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice.
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