While I’m at SxSW it gets a little hectic, so unfortunately I didn’t have time to do a full post. Instead I wanted to share the wise words J. Cole shared on a SxSW panel today. Many musicians still live in the mind state where they complain about lesser talents being more famous than they are, while waiting for the hand of God (or Perez Hilton, or Warner Brothers) to come out of the sky to make them a star. Waiting for someone else to make you a known entity works just about as well as trying to find short cuts to success. It doesn’t. Talent is key, but drive, commitment, having a great team and working hard are equally important, if not more. That is why you’ll sometimes find “lesser talents” having mainstream success. Because they worked harder and for longer than those artists that have a sense of entitlement based on their (perceived) level of talent. Or like Donny Goines says: “If you don’t know my name, I’m not working hard enough.”

“In this day and age, when you have so much control, you don’t want to be the [up-and-coming artist] relying on [TV Stations] to notice you and put you on TV. Coz really, they don’t need to do that. It’s the TV business so they could just be like “we’re gonna put the stars on tv all day and that’s that.” To even have a “somebody save me” mind state is wrong, in this day and age when you have so much control and power. Talent is important and it will get you far, but talent almost doesn’t matter if you don’t have vision and marketing and something different about you.” – J. Cole

Offering free downloads should be an integral part of any musician’s strategy, especially for up-and-coming acts. The democratization of the music business has led to a growing level of noise that is increasingly difficult to cut through for a new artist. Interestingly enough the same things that make it easier for an artist to get out there, make it harder for them to actually get heard. Recording costs have dropped so it’s cheaper to make an album, and online distribution has opened up so it’s easier to make it available for sale, but the sheer amount of music being put out makes it less likely than ever before that someone will take a chance by spending money on a new artist. With an overwhelming amount of new artists available to them, people instead end up listening to the ones they know already, the ones their friends tell them about, or the ones that are force-fed to them by the media. There is too much noise to break through.

We can learn from video game companies, magazines, and rappers. Rovio doesn’t expect you to drop your hard earned $0.99 on Angry Birds just like that. They offer a free version with just a few levels. Just enough to get hooked, or in Jay’s words: “just a breeze, not enough to catch a real vibe.” The same goes for magazines with short-term test-subscriptions, or free issues included with other magazines. Rappers are of course the subset of musicians that have understood the value of this method for decades. Give them a taste, and leave them wanting more. First expose people to what’s so special about your music, and if it’s something they dig, they will be back and ready for you to close the sale and convert that into purchasing behavior, whether it’s a shirt, more music, or a concert ticket. We see this behavior all the time at Family Records, and are excited to share some music for free with the confidence that people will love it so much that they’ll be back for more and to support the artist. Below is a pretty common message we come across, and one that keeps us excited about sharing more free music. We even present an entire free section front-and-center in our store.

One way an artist can enhance the free download is to provide context and package it with free downloads from other popular artists that are related in style or aesthetic. We do this with free roster-wide Family mixtapes and playlists. One of the most satisfying aspects of what we do is seeing people come into our store through one particular artist they’re a fan of, and then come back a few weeks later to pick up an album by another artist they learned about through the free mixtape that came with their previous order. See below.

Anyone can do this. Take the initiative to gather up a bunch of talented artists, including ones in other regions you plan to tour in, pick some great tracks and put them together with some nice artwork (it counts!), and encourage all the artists to have their network help to spread the mixtape. It could also be a playlist on Rdio or Spotify of course. When putting a mixtape together respect people’s time by keeping it relatively short. You may think you’re a bit of a genius, and that giving away your music alone should make people want to listen to it, but keep in mind the aforementioned thought on the overflow of new music. People don’t care if you’re a genius, until they care to begin with. And that brings us back to the start of this post. Break through the noise by providing people with context, and an easy way to sample your music for free.

Update: Today I came across another great case in point for this article. See here.

Making it as a musician or a music business person takes a lot of patience, an incredible work ethic and the gift of being able to handle delayed gratification. Artists often put in a lot of time, and many years may pass before they move from a crappy apartment in a bad neighborhood, to a decent one in an ok neighborhood, to eventually a comfortable environment.

To make the choice to be an artist or a creative business person, is to accept that it will take a long time. There are no short-cuts, and when there are they tend to backfire in the long-term. I gave some examples on the myth of an overnight success, and artists being branded as such, in an interview with MusicianWages. When faced with a choice on whether or not to pursue the music business, you have to ask yourself the question whether you really want it, and if you are going to be able to handle all that comes with that choice. If not, then that’s perfectly fine, and you can make music as a hobby and to express yourself, record albums, give them to your friends and family, all while pursuing one of the many career paths that are more secure, more comfortable, less stressful, and more stable. You do have that choice, and it’s one that any would-be entrepreneur in any field needs to make for themselves. Remember that not choosing is a choice too, and usually one that doesn’t work out so well.

Without commitment, patience, and a work ethic to stick with it until you achieve your goals, it will be that much harder to do so. It’s ok to feel discouraged or overwhelmed for a minute or two, but you have to shake it off, keep your eye on the ball, and keep going. Show up to work every day (it is a job after all), and work your butt off until you get to where you want to be. And finally, remember to enjoy yourself! It’s a blessing to be able to affect and connect people in a way that only a music can.

To drive the point home, and get the perspective of a person who’s been there, I wanted to include this great video. Songwriter/producer Rico Love speaks up, and doesn’t sugar coat it much. #Truth!

I am spending a week in the city of Memphis, TN, where I’m attending the International Folk Alliance Conference. We don’t really do too much “folky folk” at Family Records, but we really respect the song writer tradition and it’s not hard to see our artists have been inspired by the second wave of folk singers from the 1960′s. The highlight so far was meeting Mr. Jac Holzman, one of my top music business heroes, founder of Elektra and author of the amazing book at the bottom of my  ”Recommended Reading” list. For this week’s post I wanted to share some lessons from a panel discussion in which Mr. Holzman, celebrating 60 years in the business, dropped some knowledge. Mr. Holzman not only is one of the greatest music men and creatives of all time, he is also one of the very few senior executives in the music business that always thinks and moves forward as both a technologist and a futurist. I’ll include some by Jim Olsen of Signature Sounds as well.

Comments by Jac Holzman:

• On Motivation: One of the thing that kills staff at an indie label the most is having to work a record that the head of the label doesn’t believe in. Just don’t release it.
• On Clarity and Communication: It’s very rare, but some artists can do it on their own. However, generally artists needs some help and guidance. A mutual understanding on what the capabilities and responsibilities of the label are, and an understanding on what the artist needs to do to keep the engine running needs to be defined early on and made clear.
• On Touring: Some artists don’t want it badly enough to go out and do the roadwork. And yet that is so essential, and it’s where an artist hones their craft, learns to be a better writer, listen to their audience, and sell their music.
• On Patience: Build your base. Without a slowly and strongly built foundation, you will fall down much too hard after a the initial moment of a big break or hype. There are no short cuts.
• On Noise: There is more noise today with anything to do with music. Hundreds of thousands of things are coming out these days. That is an incredible level of noise, and you suddenly have to create a lot of noise yourself to get recognized and heard. And people don’t buy music that they haven’t yet before heard.
• On Indie Labels: The job of an indie label especially, is to do something that is very difficult to do: take an artist from nowhere to somewhere. That is the first step, and if you can’t take that first step, you’re gone.
• On Customers and Piracy: In a world where most everything is flat now, the users are smarter than the people running the company and you can’t control what they do so you might as well make use of it. These days our customer is smarter than most peep running the labels.
• On Napster: Take a look at where the labels were prior to Napster. Singles were coming out as CDs with the original track and some alternate versions. By shutting down Napster we lost the opportunity to sell singles in real quantity and keep track of it. The original technology of Napster was a central server, which means you could keep track of everything. We had the opportunity to do so, but since it was about control and not about the future, the approach thing was to set fire to it and put it out of business. So what happened? The next generation of Napster was peer-to-peer and we lost the ability to track things.
• On Going Public: I don’t think a music company is a proper public vehicle. You need a tremendous amount of flexibility, which you don’t have as a public company.
• On Pricing: The people that ran the record companies did a lot to degrade the music. The cd was an incredible cash cow and they were making a ton of money, but the records got poorer. People these days don’t resist buying a kindle book for $9.99, but they won’t spend $0.99 on a song.
• On The Music Biz: You cant call the music industry an industry, because its a really just series of individuals that cannot collaborate on anything and will fight over everything.
• On Relationships: The distance between artist and listener is going to be condensed dramatically.
• On The Future: We’re gonna go through a lot more pain, but I think we’re gonna come out with something where more people will be able to access more music more quickly than ever before.

Comments by Jim Olsen:

• On Access To Music: I keep discovering fantastic new music. One of the things I find incredible about the online music age is that I’m working with very young artists with a full working knowledge of folk music that I had to work a lifetime for to obtain. Nowadays it is all out there and you can track all the links between albums and records and learn.
• On What Matters: We look for artists that have fun doing what they do. If it’s all ambition to be big and famous, then it never works out for anyone.
• On Touring: At this point what matters most is road work: touring. For the artist to sell the CDs on the road, from stage, because they’re sure not selling anywhere else these days.

Mr. Holzman and I

The Harvard Business Review recently posted an article with the catnip title “Fire Your Marketing Manager and Hire A Community Manager”. Community Managers are vital and valued members of social and tech start-ups like Tumblr, Vimeo, or Skillshare. There they engage with customers in a pro-active way, stimulating them to interact with each other and the company, to answer questions and share knowledge, to monitor conversations with the purpose of learning about customers’ wishes, and then report back to the company.

You can probably tell from the description above that record labels and other traditional music companies haven’t employed people in that role, and typically still don’t. If they did, we would see a more forward-thinking response to our customers’ behavior changing. Rather than suing their customer base, music companies would have pivoted and adapted to the changes. Rather than disregarding their customer’s wishes and suggestions, they would have listened. Rather than marketing what they thought the customers should buy, they would have had a conversation with them to see what they would buy.

Not only have music companies not pro-actively reached out to their customers in the manner that a community manager would, they typically don’t even provide an easy way to get in touch with them so they can at least be in a position to react. If you buy the new Lil Wayne album you won’t find a customer service number to call, and if you buy the new John Mayer record you might see a url to his website and twitter, but that’s about it.

A Community Manager is an actual human with a name that you can talk to, not the faceless corporation that we’re used to, all walled up to avoid pesky interactions with customers. Your customers, when happy, are your biggest and most committed marketing force possible, and delighting and empowering them should be your main goal if you want to spread your product and grow your market. Failing to understand this is what got the music industry in trouble.

Fans are the reason a musician is able to perform and record music for a living, and they are the reason music companies can exist. Listen to them, engage and delight them, involve and empower them. Use Tweetdeck to follow conversations people have about you or your artist, and reach out with a free download to surprise them. Monitor Facebook comments to see if people have extra tickets to a sold out show, and match them up with other fans that are still looking. At Family Records we have countless numbers of first hand experiences with customers responding to this kind of engagement with joy and surprise. It’s one of the most satisfying parts of the job. We are here to make people happy, and this is a great way to do it. Build a community around music, and give. You will receive more in return than you ever imagine if you’re used to the old way.

Recommended Additional Reading

• To gain a thorough understanding of the responsibilities, goals, and personality required from a Community Manager read this post by Erin Bury, and this one by Connie Bensen.

Sidenote

• We are looking to hire an additional Community Manager at Family Records.
  

A few years ago the famous Tower Records stores in NYC shut their doors for good. I remember it being described as a big blow to indie artists, as Tower was the only chain that would take a chance on putting some indie artists in their racks. Last week when I was over in London I read an article that discussed the big chain HMV closing down 60 of their stores in the next 12 months.

A few quoted lines:

The retailer today announced a 14.1% drop in like-for-like sales at its UK and Ireland stores for the 10 weeks to January 1 2011, blaming the bad weather and weak sales of entertainment products.

“My message to the music industry would be, I appreciate your support,” [HMV CEO Simon Fox] tells Music Week. “We needed to take steps to make sure we are a profitable, long-term business. We think the sales impact [of these closures] will be minimised by our actions.”

Physical music retail, in the mainstream brick-and-mortar sense, has been in a downward spiral for about a decade now, and it will not recover. If we can accept that fact, we can move forward and focus on places where we can sell physical music products. Note that I didn’t say “cds” or even “vinyl”. We’re going to have to be more creative than that, but “what” to sell is a topic for another post altogether.

Chain stores never really were that great of a place to sell music as a non-mainstream artist to begin with. The retailer takes a big cut, demands a lot in return for good placement and is not invested in your career or even the music business in general. Best Buy’s business plan does not have a little section on breaking a great new artist like an indie store might be interested in doing. Best Buy focuses on profit-per-square-foot and if video games or plasma screens deliver better numbers, they won’t think twice about booting music out altogether, like they will at some point in the next few years. This is not something to feel resentful over as a musician or music person. It’s just how it is, and that knowledge can be used when you’re choosing who you work with as far as retail partners go.

As an indie artist, you have a very simple and clean set of options in front of you as to where to sell your physical products, whether it’s t-shirts, cds, usb sticks, vinyl or posters.

1. Direct-To-Fan - Your Website - The number one spot for artists to sell their physical wares should be through a website controlled by their own team, ideally both on their own site and their label’s site (see next point). Selling product on your own site is perfect to cater to existing and passionate fans. They already know where to find you and visit regularly (if you’re doing a good job), and it’s your job to present them with interesting and cool new products on a continuous basis so they can support the cause, feel involved and are enable to share their love for your music with their friends.
2. Direct-To-Fan – Your Label Site - Where selling from your own site targets existing fans, selling from your label’s site will provide more exposure to groups of fans of like-minded artists and allow for cross-promotion and the organic growth of your own fan-base. You will never make any new fans from your own website, as all visitors are likely fans already. We see this all the time through our own Family Records store, when orders come in from familiar names that might original find us to buy a Wakey!Wakey! t-shirt, then also end up downloading a free Pearl and the Beard song, and return later for a paid PatB album or shirt purchase. It’s a model successfully employed by Fueled by Ramen, the Wu-Tang Clan and quite a few others in the past.
3. Direct-To-Fan – At Your Concerts – See point one, without the shipping charges! In addition, having a great merch booth will keep you better connected to your fans as it’s a great excuse to meet everyone and have a chat. The ultimate way to make a fan is to hang out at the merch booth and talk to the nice folks that just saw you play a set. Remember, artists are connectors. Benefits of selling direct (points 1-3) include a higher cut of the profit, a better understanding of the fans, the ability to gain valuable data and ways to contact fans, and controlling the quality of the service your fans receive.
4. Third Party Online Retailers  - The CD Baby’s, Insounds and Amazons of the world. Trusted sources to buy from for people that are a bit new to buying online. They take a bigger cut, but they also handle all the logistics involved. It’s a bit trickier to get your products on Amazon than on CD Baby, but it’s totally an option.
5. Independent Record Stores - The few that are left can be your friend, especially in the territories that you tour in. They know the market, they know their clientele. Make an effort to research local stores, get in touch, see about putting up a poster on your first time around, and if you’re already drawing quite well in their market there might be an opportunity to partner up and get them involved handling the cd/vinyl sales at the show. I shared some thoughts on how these stores could evolve and flourish with some changes here.

In the past, record labels chased down the holy grail of the massive group of casual fans beyond the original group of hardcore fans, and to reach them you needed the chain stores. The casual fans were the ones responsible for taking a record from selling modestly to a multi-platinum success. As the mainstream world slowly follows the early adopter from buying physical music carriers, to music files, and finally to streaming all their music consumption, this group of casual fans will be streaming a record for pennies only. We will once again have to zero in on those fans that truly matter, and there we will find a strong market for higher end physical products that focuses on the inner circle of hardcore fans. These fans can be served well from any of the above options.

Throughout the ups and downs on the music business there is one positive that is always there. The fact that we all listen to music. How we listen is ever-changing. We’ve seen changes in carrier formats, and we’ve seen changes in the publicly available channels. The former has seen us go from vinyl to 8 track, cassette, CD and now MP3 players. The latter has moved us from terrestrial to satellite and internet radio. The next change that is coming will be a merged evolution of both the carrier as well as the channel, as we’ll move away from ownership, and towards on-demand.

In the world of TV and movies we are seeing a massive consumer shift from ownership to on-demand, illustrated by the successes of Netflix, Hulu, iTunes movie/tv store, and devices like Boxee, Apple TV and Roku. Why clutter up your house with DVDs, or even your hard drive with downloads, when you can watch nearly any movie or tv show on-demand as a stream whenever you feel like it. The same goes for books and magazines, since the introduction of the Kindle and iPad. There will always be people that will prefer the physical format of the past, or ownership in general, but the mainstream carrier format will inevitably move towards digital and on-demand. Exceptions can be made for limited edition items or even particularly engaging or beautiful physical packaging, but this will become a niche-only element of the media business.

While the music business was on the forefront of the shift from physical to digital ownership, albeit it unwillingly, we are now a bit behind on the next move from digital ownership to digital on-demand. Interestingly the reason for both the original edge as well as the current lag is one and the same: major rights holders being asleep at the wheel. Where Steve Jobs was able to take advantage of this by getting the majors to agree to digital distribution deals with iTunes, progress is now held back while they fail to strike deals with companies like Spotify and others who are able to deliver the next massive shift in user behavior.

The world of movies and TV shows have taken the lead in customer-focused innovation that utilizes on-demand delivery of their products, and they are thriving because of it. While I have pointed out before that income from on-demand services is a mere fraction of that of downloads, we also can’t deny that this (r)evolution will be happening and it’s the consumer rather than the producer that is in charge. Whatever the best value proposition is for the consumer will become the dominant form in which the artist and her team will have to offer her product.

Venture Capital investor Fred Wilson posted the following on his blog, and it mirrors my own experience. Of course Fred is not Average Consumer #1, but I believe it won’t take long until this moves from an early adopter to a mainstream attitude.

I’m going to the gym in a few minutes. I’ll bring my android and stream some music while I’m on the treadmill. Maybe I’ll listen to my soundcloud dropbox, or maybe I’ll check out the popular tracks on hypem, or maybe I’ll listen to some fredwilson.fm. I stream music on my mobile phone all the time. I don’t have a single mp3 on my android and I don’t have any desire to put any on it.

This is the future. We won’t be buying files, moving files, and listening to files. We’ll be streaming audio from the cloud onto our connected devices in our homes and offices, and onto our mobile devices at the gym, on the bike, in the car, etc. And I think mobile streaming audio is going to be huge.

I’m in London at the moment for some shows with Family artists Casey Shea and Wakey!Wakey!. One of the biggest challenges being out of the country has been dealing with our partners and third party content providers’ attempts to keep me away from their product, simply based on my location rather than common sense.

When It Makes Sense To Put Up Walls
There is no question that when sensitive details and security are involved it makes sense to put up walls. For example, when we wire Family artists their monthly sales income via our bank’s website, they need a confirmation code that is delivered to my cell phone right before the transaction. Great system, except my cell phone doesn’t work in the UK (gah!). I had to jump through some hoops to make last month’s payments happen, and luckily our bank was so kind to cooperate so it worked out in the end. I didn’t complain, because really in this case, the wall keeps those with bad intent out, and the customer and provider of sensitive date safely inside the bank’s city walls.

When It Doesn’t Make Sense To Put Up Walls
In other cases, putting up walls seems awfully counter-productive to the end-consumer, the content creator and the retailer. I just followed a link to an MTV article with a new music video, and was kept out because my current IP is in the UK. (See screencap below.) I’m also not able to buy music or a movie from either iTunes UK or iTunes US right now, because I need a UK credit card for one, and a US IP for the other. I have neither, so I’m treated as the bad guy, rather then the faithful and legit customer of theirs I really am. I can’t watch anything on Hulu either, and I can keep going. In this case, who is winning, if anyone at all? The customer has a frustrating experience, the content creator loses money, the advertisers lose eye balls, the retailers lose out on customers.

This is not rocket science. Work out the rights, improve the customer experience, increase sales across the board. Content that wants to be spread, will be spread. When you try to lock down the legitimate way of getting the content by putting up walls, people will find an illegitimate way to obtain it. In this case your walls don’t keep the bad guys out, but they do lock up the good guys. You might have set out to build a wall, but instead you built a prison.

Brene Brown‘s TED Talk last summer was on the power of vulnerability and connection, and it was powerful. A quote: “Connection is where we are here. It’s what gives purpose and meaning to our lives. This is what it’s all about. Shame [on the other hand] is very easily understood as the fear of disconnection. Is there something about me, that if other people know it or see it, that I won’t be worthy of connection.”

“Connection is why we are here.” Now that’s a truth that cuts deep. Songwriters and performers should be aware of the important and powerful position to connect to more people than most others on this planet will ever be able to connect. And in your absence, your words and sounds can still connect many others to each other. Something to review in those moments when it seems that it’s too much work, when it feels impossible to “make it”, when you’re playing in front of only a handful of people. You’re a connector of humans and feelings. It’s important.

And of course, you should also keep this in in mind when designing strategies around your art with the purpose of spreading it and making a living. To connect is both the goal, and the reward. Best case scenario, you’ll be leading a tribe.

Related Reading:

• The Artist As An Entrepreneur – Pt. 2 – Who are your customers and what are their needs. (read)
• Transactions Vs. Relationships (Or What Kind Of Artist Are You?) (read)
• An Ongoing Relationship With Customers (read)

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Jan

06

12:43

The Year Of The Insurgents (Or A Quiet Revolution)

1.1.11 looks pretty cool, doesn’t it? A brand new year for us all challenge the music business status quo, and work towards a quiet revolution in service of both the artists and their audience. We are starting, literally, at day one, of month one, of a brand new decade that will change the way we create and share art with others. Exciting!

Seth started the year by writing about incumbents and insurgents:

Incumbents compromise to please the committee and bend over backwards to defend the status quo. Insurgents have the ability to work without a committee and to destroy the status quo. The game is stacked in favor of the insurgents, except– They’re under pressure from boards, investors and neighbors to act like incumbents. It takes guts to be an insurgent, and even though the asymmetrical nature of challenging the status quo is in their favor, often we find we’re short on guts. … and then the incumbents prevail.

Being on the attack for progress means benefiting from momentum and inevitability. Being on the defense against progress never works out. Whether you are fighting for something as big picture as civil rights, or as small as a new distribution method for music, the principle remains. Incumbents will win some battles, but as long as insurgents do their job well they never win the war against progress for the end-user. Major labels succeeded in shutting down Napster, but it was a Pyrrhic victory. Looking back I’m sure they realize it was a missed opportunity to be ahead of the curve and embrace the inevitable rise of online distribution.

On the other side of the equation, artists have to have the aforementioned guts, vision and patience to embrace their insurgent status. In 2010 we saw two new artists powerful enough to force change that ended up not pulling through and going for the more traditional approach, again. Drake had a radio hit, a strong management team in place, top artist endorsement, momentum, fans, tour history, but in the end he still did sign a major record deal with Universal Motown. He could have been the first true mainstream artist to go the non-major route, but he didn’t follow through, or maybe it was never his plan in the first place of course.

We saw a similar opportunity for the innovative rapper Jay Electronica who had the whole industry chasing after him, top producer Just Blaze servicing him with beats and a team that gave him the opportunity to embrace non-traditional release schedules. I was almost certain he was going to continue on this path, but in December he signed to Jay-Z’s Roc Nation. And in 2011 even Pink Floyd resigned to EMI, after years of litigation.

I wish these artists the best, and I love their music, but I sure wish they would’ve joined our quiet revolution away from the status quo. Or even to go the Taylor Swift route where you’re developed by and signed to an independent label, that then sets up a joint venture or distribution deal with a major, with retained rights for the artists. Perhaps we’ll see an artist step up in 2011, embrace their insurgent status, and show other artists a new way on the mainstream level, whether it’s an established band out of contract, or a new star. I’m crossing my fingers for others, and working on it myself as well for Family artists.

(PS Starting in January 2011, I will post weekly on Thursdays.)

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