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MUSIC BIZ INSIGHT #42 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 - 2006, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice.
Tooth Tunes. Facing decay in the toy business, Hasbro isgetting ready to fight cavities with a newfangled toothbrush/toy that conducts music through the user's jawbone, reports Joseph Pereira in The Wall Street Journal. It's meant for kids and it's called Tooth Tunes: "When pressed to the teeth (it) renders a recorded riff from a pop star that lasts two minutes -- precisely the amount of time dentists say children should spend brushing their teeth." Not only do dentists love the concept, pop stars are thinking it could be pretty cool, too. Hasbro (hasbro.com), is already in talks with Will Smith and Black Eyed Peas about a dental debut. Hillary Duff's manager is so enchanted that he's thinking his star might even write an original Tooth Tune: "Hillary's into clean living," he says, "She would like to convey to kids that, 'Hey I may be Hillary Duff, but I have to brush my teeth too." Maybe the Cowsills could make a comeback with this. Mike Bloom is also very excited about it. Mike is senior vice president of merchandising for CVS: "We plan on putting Tooth Tunes in all 5,300 of our stores," he says, adding: "That's a big risk, but I really feel this brush is here for the long haul." Nevermind that CVS already sells "116 different types of toothbrushes, including 88 manual and 28 battery-powered models." Mike is hoping for an exclusive deal with Hasbro, which is planning on bypassing toy stores and distributing their innovation through "drugstores, supermarkets and discount retailers." The brush will not come cheap, though - it retails at $10 a pop, and only one tune per brush. When the brush wears out you've got to throw Hillary or Will in the garbage and buy a new one (or maybe give it to your little brother). The "recording is stored on a microchip no bigger than a dot atop the letter i," and is transmitted via a patented, "pea-sized" gizmo called a "dental mandibular sound transducer." The sound quality is said to be "a cross between the sound of music coming out of a stereo speaker and humming to oneself." The invention actually isn't new - Hasbro previously attempted to use it in a sugar-free lollipop called "Sound Bites." But, at $10, it was a lollipop flop. Then the thought was, hmm, how about a pen? No, that wouldn't work for obvious reasons. Forks and spoons? Well, that wouldn't work either, because the music would stop between bites and "discourage normal eating." Then the toothbrush idea occurred to Andrew Filo, "an inventor-consultant to Hasbro" who was on the team that originally invented the device - yes, while he was brushing his teeth. Tooth Tunes will be made in Asia, marketed to kids three through teens, and is poised for a Back-To-School launch this fall. The Starbucks Sound. Marketing music maybe isn't as simple as it used to be for Starbucks, as the coffee-chain's "customer base is ever-widening, reflecting an increasingly young, multiethnic, transclass mix," report Steven Gray and Ethan Smith in The Wall Street Journal. "Five years ago, about three percent of Starbucks customers were between the ages of 18 and 24, 16 percent were people of color, 78 percent had college degrees, and overall they had an annual income of $81,000. Today, however, about 13 percent of the company's customers are between 18 and 24, 37 percent are people of color, 56 percent are college graduates, and they earn, on average, $55,000 a year." So, where it used to be (and maybe still is) that the "Starbucks Sound" is "moderately eclectic, often jazzy, and never noisy enough to disrupt a quiet cup of coffee," the retailer's carefully cultivated audio aesthetic is subject to change. Perhaps that's why the "Starbucks Sound" is now mixing the likes of Beck and Coldplay with Bob Dylan and Carole King. It also raises the possibility that while "Starbucks is perfectly attuned" to its current customer base, it may have a tough time adapting to "changing tastes and styles over the years." But for now, it seems the "Starbucks Sound" is a hit ... although the retailer doesn't disclose "revenue from CD sales," and CIBC World Markets estimates that Starbucks' CD sales account for "less than two percent" of "U.S. retail sales of $4.5 billion during fiscal year 2005." However, "when Starbucks carries an album, its stores often account for 20 percent to 30 percent of the record's weekly sales, and sometimes as much as 50 percent." EMI Group says that when Starbucks distributes one of its releases, it is consistently among its "top four" retailers. The record companies also appreciate that Starbucks doesn't "return unsold merchandise, as traditional retailers do." In exchange, Starbucks extracts lower wholesale prices. Does it pass the savings along to its customers? Ha! The typical Starbucks customer is more than willing to pay "full freight" for a CD that can be purchased at a discount down the street and Starbucks is more than willing to accept the premium. The "Starbucks Sound," as it turns out, is "ka-ching." MP3 Turns 10, Some Are Less Than Celebratory. The MP3 file format turned ten years old on Thursday, July 14th, 2005, a symbolic birth date that not all will be celebrating. Since its invention, the format has skyrocketed in popularity, with billions of MP3 files now traded on P2P networks. While other compression codecs have followed, it was the MP3 that provided the fuel for developments like the original Napster, and subsequent P2P generations ushered in by applications like Kazaa and eDonkey. Currently, the format dwarfs all others in digital music, with music fans slowly trickling into paid, DRM-protected formats from companies like Apple and Microsoft. For the music industry, the legacy is mixed at best. Record sales
have been steadily declining for the past few years, with widespread
file-sharing often blamed for the demise. While the advent of CDs
helped to power a prolonged sales boom in the 90s, those same
discs have allowed pristine copies of files, often in the MP3 format,
to float endlessly on P2P networks and the web. While that has
created endless headaches for rights holders, it has also spawned
new industries, including a new portable MP3 sector. The popularity
of the Apple iPod is often attributed to its ability to easily store
thousands of MP3 tracks, with a new breed of listeners forever
attached to the little devices. Now, some estimates peg portable
MP3 players to hit 60 million by 2006, part of an overall move
towards ubiquitous music and media consumption. Roadcasting could give mobile MP3-playing drivers pick of the iPod lists. KEY INSIGHT CONSUMER CONNECTION Roadcasting devices feature a programmable filter, so users can control what streams in (yea on the Prius' The Arcade Fire rock) and what stays out (nay on the minivan's Manilow). The podcast spin off, developed by grad students at Carnegie Mellon's Human- Computer Interaction Institute, was commissioned by an unnamed "major automaker" (Wired.com 5.31.05). Music is a driving Millennial force. So why not a mobile musical swap to take the show on the road? Citizen-created media, like podcasts and blogs, are riding high with young, control-craving consumers in the driver's seat. For them, music is a given the medium is their own, and sharing is a big part of the fun. RESOURCE Jerry Garcia Emporium. Ten years ago today, Jerry Garcia joined "the dead" for good, but his legacy lives on not only in his music, but also in the form of a burgeoning array of licensed products, reports Seth Schiesel in The New York Times. In addition to Cherry Garcia ice cream ("often the top-selling brand of Ben & Jerry's ice cream"), "consumers still buy more than a million J. Garcia neckties" as well as snap up "gas tank caps, incense burners, golf club covers and sandals." And have you tried the J. Garcia wine, jgarciawine.com? "They're trying to do an Elvis on him, with all the garments and merchandise and different items," says Tiff Garcia, Jerry's older brother. However, Christopher Sabec, CEO of Jerry Garcia Estate LLC, jerrygarcia.com, says the merchandising is more than a frenzied attempt to cash in on trinkets and trash. "I'm not trying to turn the J. Garcia brand into something you find at Target," says Christopher, "but I am trying to broaden it. There are J. Garcia carpets that my mother would be happy to have in her house and she's not a Deadhead. If you were to position it only for people who were fans of Jerry's music, it would be a much smaller market than what we're going for." Ah, the music. The fans. For them, there's The Vault, "a windowless, climate-controlled, heavily alarmed room built like a bomb shelter" housing "towering rows of 13,000 audiotapes, 3,000 videotapes and about 250,000 feet of traditional 16-millimeter film." Only two people hold the key to The Vault, which "feeds a continuing business based on regular releases of old concert recordings on iTunes, on the band's websites and in stores, feeding old Deadheads and creating new fans." And of course it's The Vault that goes right back to a key part of what made the Grateful Dead so great to begin with - the live performances where amateur, bootleg recordings were not only condoned, but encouraged. And, that, notes Christopher Sabec, presaged the future of the music business: " ... If you look at where the music business has been forced to go by technology, now it's not about selling records. It's about live shows and inspiring a fan base to be absolutely loyal Hello? Who did that first? The Grateful Dead." It's not known exactly how many millions the Garcia/Dead merchandising pulls down each year, but the figure was pegged at "more than $50 million in annual gross revenue ... in the years immediately following" Jerry Garcia's death on August 9, 1995 (which coincidentally was the same day Netscape stock went public, signaling the dot-com boom, and bringing with it the changes that continue to challenge the record business). Insight of the Month. "The average consumer is not motivated by arguments about copyright infringement, nor should they be. Copyright has never been simply an exclusive contract to exploit the fruits of one's creativity, but rather a balancing act, weighing the legal protection of intellectual property against the public rights of access to information and freedom of expression. And the history of copyright over the last 100 years is that it has become more restrictive, less concerned with promoting the public good. In the case of music this trend would be somewhat more palatable if individual artists were the beneficiaries. But they aren't; corporations are. Witness the "Works for Hire" amendment, which [tried to make] all master recordings the property of the record company. Indeed, it is fair to say that record companies have stolen more money from artists than all the Napster users combined. Consumers have not fared much better. Recently the major labels admitted to a price-fixing scheme, which robbed consumers of approximately $500 million in a 2.5 year period. Through its past practices, the music industry has not only created the conditions under which consumers will circumvent the record companies to get their music, they have made people feel righteous for doing so". - Reebee Garofalo, co-author of Rock 'N' Roll is Here to Pay. ))) ILLUMINATING TRIVIA
...one of Bob Dylan's first recording gigs was playing harmonica on a
Harry Belfonte album in 1960? The pay: $50. ))) FEATURE: THE NEXT MUSIC COMPANIES The following is an excerpt from an article titled "Staying Ahead of the Curve" by Peter Spellman, now making its way around the Web and also published as lead article in the new edition of The Indie Contact Bible (indiebible.com) ...METATREND #3 Unfortunately, so much of the music industry is beholden to corporate owners, itchy for quick profits, and driven by rigid corporate imperatives. This wreaks havoc with artist development; hell, it wreaks havoc with business development, and necessitates high turnover of both artists and employees. Major labels are also saddled with legacy problems regarding production and retail. Thus the geologic tempo of industry change. But the same forces undoing the larger music companies are empowering individual musicians and micro-businesses. As with most modern industries, a silent computer on a desk is the wildcard that makes so much tradition redundant. Perhaps the term "record company" itself is becoming outdated - "Music Company" might be more relevant. Many music biz execs echo the words of Steve Becket of Warp Records when he says, "I think we'll mutate into a new type of company - mixture of artist management, publisher, marketing consultant, agent and promoter." "We're a communications company," agrees Marc Jones of Wall of Sound, "and that's what we're becoming more everyday. I don't think the model for a traditional record label will exist in this environment anymore." But we don't have to solve the dilemma for the mainstream music business about which future to embrace. We're living the sidestream music movement that may inspire the majors but, God willing, will never be completely controlled by them. Unlike mainstream commercial music, the farther you get out onto the fringes, the more helpful people become. The more participants, the greater the chances that something truly interesting will emerge from the collective rabble. A new generation of music entrepreneurs is rising with a power in its corner it has never had before. The times are ripe for change and these creators are the spearhead. What You Can Do About It
))) BIZ SMARTZ Capture those ideas: Successful entrepreneurs know the impact a single good idea can have on a business. Realizing that inspiration can strike at any time, they make sure they capture those brainstorms. Consider keeping a microcassette or digital recorder handy to make verbal notes throughout the day. If you spend much time in your car, keep a recorder in the glove compartment, or a pen and notepad close at hand. Scanner Kindness: Use light-colored envelopes whenever possible. Darker colors reduce the contrast needed for post office computer scanners to operate efficiently - which means your mail could be delayed or lost in processing. Cheaper than Bubble Wrap: Try using balled-up plastic bags instead of the more expensive bubble wrap to protect fragile items when shipping. The bags come in all shapes and sizes thee days - from the dry cleaners, grocery stores, drugstores, or department stores. When balled up, the bags trap enough air to be a good substitute for bubble wrap or packing peanuts. 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--
"There is no such thing as a 'self-made' man. We are made up of
thousands of others. Everyone who has ever done a kind deed for
us, or spoken one word of encouragement to us, has entered into
the make-up of our character and of our thoughts, as well as our
success." 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 - 2006, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice.
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