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MUSIC BIZ INSIGHT #48Power Reading for Busy Music ProfessionalsHope 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 - 2007, Peter Spellman, MBS Business Media, www.mbsolutions.com Please feel free to redistribute with above credit and copyright notice. IN THIS ISSUE—MBI#48:
NEWS & VIEWS U CAN USEMOG TV A new online social-network called Mog (mog.com) not only enables members to meet other people with similar musical tastes, but also view music videos based on the songs in your music library, reports Wilson Rothman in The New York Times (3/29/07). “Imagine if YouTube knew what songs were in your music collection … it’s the ultimate mash-up,” says David Hyman, Mog’s CEO. It’s actually just one of a number of online services that promise to build communities—and sell new music—based on what your music collection says about you. You’ve probably already heard of Pandora (pandora.com) where musicologists suggest other artists you might like based on those you identify as your favorites. Or perhaps you’ve stumbled across Last.fm (lastfm.com), which is premised not on expert opinion but rather “the wisdom of the crowd.” You download software that first analyzes the songs on your computer, and then creates your own personal “radio station” by correlating your collection to some “65 million tracks by 8 million artists” worldwide as found on other people’s computers. Last.fm then takes things a step further, by creating a community out of its 15 million users, who can “contact others whose musical tastes correspond significantly” with their own. A newer entry is Slacker.com, which offers a free software player and sells a portable device you can use to take your personalized music with you. Slacker’s future plans call for a satellite to “blast” song files to the portable device, which will then decide “whether the song is a good fit for its particular user.” Copyright royalties is, of course, an issue for these many ventures. Some bypass that problem by relying “strictly on music the listener already owns or new track donated by publicity-hungry independent artists and labels.” Slacker actually has “made its own licensing deals directly with the four major music groups plus several hundred independent labels.” But the big idea, as Last.fm founder Martin Siskel notes is this: “Interest in new music flags when you don’t have an infrastucture of informers around you … This is community-driven.” BLURRING MUSIC BUSINESS CATEGORIES: Victory Records Broadens Into Touring, Mints Booking Agency Divisions between different aspects of the music industry are becoming increasingly blurry, a trend that is likely to accelerate over the coming years. A major shift towards digital consumption is driving the upheaval, though changes are happening on the physical side as well. Just recently, big-name independent Victory Records created an internal concert booking division, a move designed to better nurture and control the artist development cycle. “All of the best selling artists in our history started off by playing the smallest of clubs, VFW halls, people’s basements, coffee houses, etc.,” said label head Tony Brummel. “Touring and performing at that level is the catalyst of artist development.” The touring unit will craft tours for artists that lack booking agent representation, and maximize touring receipts from more developed artists. The division will be headed by Josh Lacey, a former agent at Lucky Booking and Face The Music. At this stage, it remains unclear just how Victory will get involved in the live concert revenue picture, though the expansion could easily diversify financial sources. From an artist level, touring often represents a more lucrative avenue than the sale of CDs, which continue to face downward pressure. It also allows groups to cultivate fanbases within an intimate setting, though artists like Terra Naomi are finding better success reaching audiences online. For Victory, the added expertise may also attract promising artists, many of whom may otherwise have difficulty securing a booking agent in their developmental phase. Driver Side Impact, 1997 and On The Last Day will be the first artists to benefit from the new division, according to the label. Other artists on the Victory card include Hawthorne Heights, Atreyu, and Endwell. Story by news analyst Alexandra Osorio. CLEAR CHANNEL LOSES LIVE RECORDING PATENT—YEAH!!! NEW YORK (CelebrityAccess MediaWire)—The U.S. Patent and Trademark Office has announced that it will revoke a patent on live concert recording technology owned by Clear Channel Communications, following a successful challenge launched last year by the Electronic Frontier Foundation (EFF), a digital civil liberties advocate. The patent had been awarded for a process used by Clear Channel’s Instant Live unit, which captures and mixes live music concerts and immediately burns them to CD for fans to purchase at the venue following a show. The EFF petitioned the Patent Office for a re-examination of the patent last year, resulting in the recent announcement. “The patent covered a system and method of creating digital recordings of live performances,” the EFF said in a statement. “Clear Channel claimed the bogus patent created a monopoly on all-in-one technologies that produce post-concert digital recordings and threatened to sue those who made such recordings. This locked music acts into using Clear Channel technology and blocked innovations by others.” The EFF said its own investigation found that a company called Telex first developed a similar technology more than a year before Clear Channel even filed its patent request. TWO SIDES TO THE FORCE In a Billboard guest editorial, Billy Bragg begins by noting the ability of “social networking sites” to distribute music to millions of potential listeners without entanglement with a record company. “Yet there are pitfalls,” Bragg writes. For instance, MTV’s Flux site invites artists to post their material in the hopes of getting on the parent network. Yet MTV Flux claims the right to exploit (and even edit) that content any way it wants to “without payment to you” and, more brazenly, claims ownership of the content, even if the artist removes it from the site. Bragg quotes Robert Amlung, an executive at German broadcaster ZDF: “If someone puts images up on our site, they are giving their rights away.” Bragg, who single-handedly forced MySpace to alter its onerous terms of service last summer, concludes: “If people begin to feel that they are unfairly exploited by companies whose only interest is to make money, none of which is passed on to the content creators, then this community is savvy enough to take its material to a place beyond the reach of corporate exploitation.” Go Billy! HOT LIVE INDIE ACTION MP3 Blogs tend to exhibit shark like behavior: Too many sites join feeding frenzies over too few worthwhile (and most illegal) songs that stream like they’re been downloading off an answering machine. Day- trotter is the exception. Influenced by the late, great John Peel (whose legendary BBC radio show boosted many a budding career, from Bowie to the White Strips), Davenport Iowa-based music critic Sean Moeller and engineer Patrick Stolley launched the site to showcase MP3s of live, in-studio session with some of indie rock’s hottest acts, including recent guests French Kicks, Vietnam, and Of Montreal. Daytrotter’s recordings are known for their warm, fluid sound, the result of the studio’s candy shop of vintage gear, including a Rhodes piano, a Lowrey tube organ, and a dozen Spectra Sonic preamp. “We record straight to quarter-inch tape,” Moeller says. “There are no overdubs. No Pro Tools. What you hear on the site is exactly what happened that day.” Since it’s launch in March 2006, Daytrotter has become a favorite destination for a music fans (with half a million downloads) and a welcome tour stop for hip hop bands. “I love our recordings,” Of Montreal frontman Kevin Barnes, says. “The way they approach music is a cool reaction to the digital, overproduced sound that you usually hear on the web.” Source: Wired.com OPPORTUNITY: KEEPING SCORE Microsoft is inviting un-signed artists to create music-inspired Xbox 360 videogames. Participating artists in the Xbox Sound-tracks program will be able to download and score music to a variety of game trailers in May. Completed works will be uploaded to a dedicated Web site and rated by fans. Winners from different countries will receive studio time recording time with universal Music Group. Although the contest does not officially start until May, Scissor Sisters Kicked off it’s promotion by reworking their song “she My Man” as inspired by the trailer for the much-anticipated videogame “Halo Wars.” Further info: http://www.xbox.com/en-us/live A LITTLE TAX TRIVIA: The top 50% of wage earners in the U.S. pay 96.5% of all taxes. The bottom 50% of wage earners pay the remaining 3.5%. The top 1% wage earners pay 1/3 of total taxes, and the top 5% pay more than 1/2. Mercy!!!
))) FEATURE (((CHALLENGING THE STATUS QUO Someone once said, “Remember that the great wise men of the past held no respect for today’s conventions, and neither will the great men of the future.” If you desire to improve your world—or even your own situation—then creativity will help you do so. The status quo and creativity are incompatible. Creativity and innovation always walk hand in hand. When singer Elvis Presley died, he left everything in a trust for Lisa Marie, his young daughter. Soon, however his estate was in terrible shape. In 1997, Lisa Marie’s mother, Priscilla became a co-executor of the trust and found that if she didn’t do something, and quickly, the estate was on the road to ruin. During his lifetime, Elvis received less then half of what he earned. Colonel Tom Parker, his manager, had a contract that took 50 percent of everything right off the top. That and a lifestyle of free spending, meant that Elvis often found himself strapped for cash. Several years before he died, Elvis sold off the rights to most of his recordings to raise money. Consequently, his estate receives no royalties from his music, even though Elvis recordings earned more revenue for RCA than any other artist even after 25 years after his death. Add to that a huge inheritance tax imposed by the government, and an empty mansion, Graceland gobbling up money through taxes and upkeep, and you can imagine how bleak the situation looked. Priscilla Presley was not about to allow her daughter inheritance to be eaten away—but how do you earn income from Elvis’ estate without Elvis? Whenever he needed money, he would simple perform at another concert, make another album, or appear in another movie. Priscilla started to think creatively. First, she took the little remaining cash from the estate and invested it into Graceland. Rather than selling it, she opened it to the pubic as a tourist attraction. It was a great risk, but it paid off. Just thirty eight days after it opened in 1982, it earned back its investment. Next, she severed ties with Tom Parker so that 50 percent of the estate’s earnings would not continue being funneled to him. Finally, Priscilla began to treat Elvis as a brand, She even promoted legislation in Tennessee to make his likeness intellectual property, which would belong to his estate. By using creative thinking, Priscilla Presley turned what looked like an impossible situation into a business empire that earns tens of millions of dollars each year. People speculate that Lisa Marie Presley’s net worth today exceeds $250 million. Without the creative thinking that shattered the status quo, it likely would have been nothing.
))) ILLUMINATING TRIVIA (((Did you know… James Brown ignored record contracts when they got in his way? For instance, in 1959 he went to Dade Records when his label, King Records, wouldn’t allow him to record instrumentals. The result was “Do The Mashed Potatoes, Parts 1 and 2,” a Top 10 R&B hit issued under the name of Nat Kendrick and the Swans. Brown did it again later when he recorded a brilliant jazz organ album for Smash. He built a business empire of radio stations and real estate in pursuit of not just wealth but his own vision of freedom. Source: Rock & Rap Confidential
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: We are now at one of those historic moments when a scientific itch is just beyond the reach of scratch, and it is a particularly maddening time, especially for those who stand outside the sciences in the humanities and can only sense what they cannot know. For those of us who lack the mathematical tools and scientific knowledge to articulate what they intuit, one sane way to compensate for our individual inadequacies is to think in an ensemble devoted to a kind of intellectual chamber music, or, perhaps, it would be better to consider it a more informal kind of mind-jazz that through theme and variation seeks to explore the limits of the given mentality of the historical epoch. — William Irwin Thompson, Imaginary Landscape: Making Worlds of Myth and Science (an amazing and challenging read by one of my favorite authors) 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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