Tag Archives: bob lefsetz

MORE SONGS ARE SELLING

imageLast week, Bob Lefsetz extrapolated information from the new book by Anita Elberse entitled “Blockbusters: Hit-Making, Risk-Taking, And The Big Business Of Entertainment” in a blog post entitled “The Most Important Thing You Will Read All Day”. While Bob just quoted an extended passage from the book, the intention is stated in the final sentence of the first paragraph:

The trend is clear: as the market for digital tracks grow, the share of titles that sell far too few copies to be lucrative investments is growing as well. More and more tracks sell next to nothing.

The data is pretty clear and the inference is certainly correct. The share of tracks that sold fewer than 100 units grew from 91% to 94% from 2007 to 2011. Based on the overall number of tracks released in those years, the number of tracks that sold less than 100 units more than doubled, growing from 3.55 million tracks in 2007 to 7.5 million tracks in 2011. The number of tracks that only sold one copy also increased dramatically, going from just under a million in 2007 to over 2.5 million in 2011. Clearly, the inference is that getting involved in music is a fool’s errand because the odds are stacked so much against you.

But the title of this article is that MORE songs are selling. So how can this be? The main reason is because the numbers in this article specifically favored the huge enormity of songs selling under 100 copies and the relative few blockbuster songs that sold over a million. If you extrapolate the number of titles that sold over 100 copies from the percentage data (an admittedly low benchmark), the number of songs sold also increased 37% from around 350,000 titles in 2007 to around 480,000 titles in 2011. In a lot of ways, if you know what you’re doing, the chances that you sell at least a modest something has increased as the public is now comfortable with downloading.

The odds have gotten worse, but this is largely due to the number of artists entering the game. Once again, the real barrier to success is shown to be the competition amongst releases. If it was piracy, then it would be unlikely that we’d see an increase in the number of titles that actually sold. Instead, the number of titles that sold in meaningful amounts went up substantially.

What’s also happening is that distribution outlets such as Tunecore have lowered the barrier to entry so much that the market is flooded with releases put out by artists inexperienced in marketing. The net result is an enormous percentage of titles that fail to sell. On the other hand, if you’re willing to put in some marketing efforts to get started, you’ll vault into the top 5-6% of all releases, which is a pool that also continues to grow.

No wonder people like myself continue to be bullish on where the music business is headed.

MUSIC DEPRECIATES THREE TIMES AS FAST AS MOVIES

Screen Shot 2013-07-23 at 9.06.57 PMHow fast does music depreciate? Try three times as fast as movies. This isn’t quantified by me just making a random statement. This is actually what the US government is saying.

Now, before we get to the “huff-and-puff” part that the internet likes to flame over, let’s talk about the positive. Starting on July 31st, the U.S. Bureau of Economic Analysis will be restating and recalculating how they come up with the US gross domestic product (GDP). For the first time, they will actually take into account artistic creation (defined mostly as movies, TV, books & music) as part of the economic engine of the United States. They are estimating that it all adds up to about 0.5% of the US GDP, which is $70 Billion dollars. For the government to recognize creatives in this fashion is a huge deal, and will probably result in benefits that we don’t even realize yet.
Screen Shot 2013-07-23 at 9.08.41 PM

But what really caught my eye in the deck from the May briefing and the Businessweek article is the annual depreciation value. Read More…

IS STEALING MUSIC REALLY THE PROBLEM?

Once again, the issue of stealing music and its moral/financial/ethical arguments are dredged up. And once again, most people miss the overall point, causing the collective issue to dig a deeper ditch while those who’ve moved past it (i.e.: major labels) are busy raking in the dough in the new music business.

Yeah, you heard me. It’s 2012, and now the neophytes are actually many indie artists (not all) while the smarter ones tend to be concentrated at major labels, thereby strengthening their power.

What started this was a post on NPR’s website by an intern named Emily White who admitted to buying very little music in her life but owning a lot via various levels of legality. This led to an impassioned response by Camper Van Beethoven/Cracker frontman David Lowery, who eloquently argued for the ethical and moral obligations Emily should have towards these artists and how stealing music has dramatically impacted their financial lives. This post has sprung up impassioned responses by, among others, Bob Lefsetz and a manager who is also, coincidentally, named Emily White. People have dug in their heels and have spilled many hours defending and vilifying both sides.

Yet lost in this discussion is one important element. Facts. Because if you’re going to argue that stealing has impacted your business, you should actually prove that…y’know…a lot of people have actually stolen your music.

Google, as the worldwide leader in search results, is a strong indicator of actual file trade demand. In fact, industry watchdog Moses Avalon argued such this week at New Music Seminar. Yet, when I went to look on Google Insights to see the level of demand for free music by David Lowery’s group Camper Van Beethoven, the message I get is, “Not enough search volume to show graphs.” This basically means, from what I can gather, that less than 50 people per month in the entire world are even showing intent to steal his music. Statisticians basically refer to this as essentially zero. Technically, the same search terms for his band Cracker show some potential thievery intent at work. However, if you actually searched these terms, you’d find most people were actually looking for a program to crack site passwords, and if they were looking for music they were more likely intending to steal the music of Uncle Kracker, who might actually have a legit beef on music stealers.

None of this is to say that I’m naive to think nobody is stealing music. Far from it. I just don’t think they’re stealing the music of the majority of artists bitching about thievery’s impact on their business. The statistics don’t bear it out. At my panel at New Music Seminar, Musicmetric CEO Greg Mead pointed out that file trading is actually decreasing in recent months. This echoes what fellow panelist Russ Crupnick reported in NPD Group’s “Annual Music Study” back in March when they reported that P2P site activity decreased from 19% of the internet population in 2006 to 13% last year.

Respected blogger Cory Doctorow also noted last month that a summary of over 20 different papers on file trading shows very little impact on sales from file trading. Drew Wilson, the author of the summary, got his results from such “fringe” groups as The Wharton School, The Journal of Law And Economics, and The Journal of Business Ethics. The most interesting line in the summary to me is this one:

Judging by the evidence we’ve collected, the evidence does not point in the direction that file-sharing, in and of itself, displace sales, but rather, other factors would also play a role in displacement of sales.

The primary “other factor” is the fact that there are too many artists competing for shrinking dollars, largely due to the shift from albums to singles. Despite the economic number that David Lowery quoted of the number of professional musicians falling by 25%, if you took “album releases” as an indicator, it seems like the number of pros has increased. In a decade, we’ve gone from about 30,000 albums being released to over 77,000 last year. And that’s just albums going thru legit channels. The problem, as noted by Chris Muratore of Nielsen on the previously noted New Music Seminar panel, is that 94% of those releases sold less than 1,000 units. Indicators that I have examined showed those low sales aren’t because of people stealing them. They come from too many releases causing most people to not even realize they are out. For example, 80s rocker Lita Ford has a new album that came out yesterday. As of this writing, it’s the 91st most popular new release on Rdio. How many of you have the patience or time to sift thru the other 90 releases to get to #91? Let alone decide to even put in the effort to steal it? Whether you were going to listen to it or not, I’d be willing to bet that almost everyone reading this found out that Lita Ford had new music from this paragraph. Stealing it is even further down their priority list.

And now that you know Lita Ford has a new record, what are you going to do about it? If you have a remote interest in her music at all, you’re most likely going to listen to it on a perfectly legal source such as YouTube, Spotify, Rdio, Mog, Rhapsody or Slacker. Why? Because I bet you caught yourself subconsciously saying that it would be quicker and easier to stream it and see what it’s about there than finding a site to steal it from, let alone having the downloads clutter your hard drive. Guess what? This is what most people do now. Having a download on a hard drive…single or album, purchased or stolen…this is the 2012 equivalent of “buying a CD with one good song on it”. People are smart and will legally stream something before any sort of ownership decision solely because they don’t want their hard drive cluttered with music they don’t like. And guessing by the demographic of my readership, I would also guess most people just want to check out what Lita is up to and have no intention of any sort of ownership. The music would have to be mind-blowing to shift the decision from “let’s see what she’s up to” to “I need to own this”.

So while all these independent artists argue thievery, do you know who’s winning? Major labels. This week, of the top 100 tracks on Spotify, only 6% are on independent labels. Major labels have figured out that the game is about exposure and awareness, two things that they are actually quite good at. It’s not about royalty rates, thievery, or even quality of music. It’s all about how I get people to know I exist. Major labels aren’t ignoring file traders, but they have moved past how much of their day they concern themselves with it. Instead, they focus on putting energy behind making music that the public wants and marketing the shit out of it so it rises above everyone else. While you’ve spent the last few years claiming the major labels are “dinosaurs” who are going to be “out of business”, they’ve actually become stronger behemoths who are more progressive than you realize.

As for the quality of their music, that’s a subjective opinion. And it’s no more subjective than the independent artists who have figured out how to make a big business out of the new music business. Artists like Tyler Ward, Kina Grannis and Alex Day, amongst others, are making six figures a year in the new paradigm. They struggle to get respect from traditional media because they’re not considered cool, credible musicians. Yet they run rings around the businesses these so-called cool bands deliver. Why? Maybe it’s simply because they deliver the kind of music more people want nowadays. As far as I can tell, they spend not a minute worrying about the money they don’t make and instead spend time making more money from the sources that do pay.

I agree ethically with David Lowery’s assessment. A person who spends extra to protect migrant workers in a third world country but takes money out of musicians’ mouths is a hypocrite. Emily White should stop complaining about wishing for a Spotify-like service and actually…y’know…subscribe to Spotify. But for actually succeeding in 2012, it’s the wrong argument. The biggest problem that David Lowery has to face is exemplified by Zach, the 24 year old New Media indie label guy at the end of Bob Lefsetz’ response post to Lowery’s “screed”. When told by a co-worker that David is the founder of Camper Van Beethoven and Cracker, he replies, “Not sure what either of those are…”

PATIENCE PAYS FOR SPOTIFY ROYALTIES

For several months, I’ve heard a lot of complaints on how little Spotify pays indie artists. So I was kind of surprised that very few picked up the story that Spotify is actually, well, starting to pay indies more.

Evolver.FM said that a confidential report from Merlin (the indie label trade organization rights agency) is showing strong revenue growth from Spotify. The reason is an increase in subscribers and usage overall. One would also suggest that the Facebook integration is starting to show up in royalty statements in recent months as well.

As an indie label owner, I get the pain of small micro payments. But I also get the concept of patience. We all dream that our song will be released, spread like wildfire, and generate huge instant digital revenues. Lately, Bob Lefsetz has been promoting the idea that great music finds its audience no matter what, further reinforcing a false notion that great things are instant successes.

But let’s take a look at one of the biggest songs of 2012: Fun’s “We Are Young”. This is the Google search trending for the song over the last year. The song was released in September 2011. This critically acclaimed song produced…barely a ripple. In fact, it didn’t do much until the spike in December which was the result of appearing on the show Glee. Then it dropped off, though maintained a higher popularity than before the show. But it wasn’t until the use in a Super Bowl ad that everything kicked into high gear and the upward ascent began. This popular hit did not go viral out of the gate. It took traditional TV placements for people to see it.

The success occurred because everyone was patient. In fact, the band’s manager Dalton Sim said as much in a Billboard cover story in March.

From my perspective, the success comes from the hard work the band, Nettwerk Records and Fueled by Ramen have put into the band for the last three-plus years to develop a real fan base.

So when it comes to services like Spotify, it appears that patience just might pay off as well. At one point, YouTube didn’t pay anyone. Now they are a top revenue driver for many artists. Financial success at any level is not an overnight story for artists or companies for that matter. However, working towards those greater successes can yield bright futures for all.

UPDATE: As Jim Mahoney of A2IM pointed out, Merlin is not a trade organization, but a rights agency.

MUSIC MARKETING & STRATEGY ARE NEEDED FOR GREAT TUNES

This morning, I had coffee with Dave Delaney at a Nashville coffee house called Crema. The place was unexpectedly packed. It had been open for a few years. The coffee was consistently great. What had changed to explode their business? A new office building opened across the street.

This morning, I heard an interview by Warren Littlefield about his new book Top Of The Rock. He talked about how Cheers was the lowest rated show in its first year. He talked about how Seinfeld struggled to find an audience in its first year. What had changed to make those shows explode? They scheduled them with other hit shows to give them proper visibility.

This morning, I read a Lefsetz blog post saying great music doesn’t need social networking to be big. To quote Bob, “You just have to make great music.”

Which one of these stories doesn’t belong?

Let’s pare down to the truth. Believing you don’t need to music marketing at any level of quality is ridiculous. Thinking that releasing songs in certain places at certain times is not a key idea is to live blindly. With so many choices, marketing and strategy is an essential part of any successful song. Social networking just happens to be the easiest and cheapest way to do it today. But if you choose not to tweet, be prepared to spend big in other places. Even if you’re fantastic.

At the same time, you do need to read the tea leaves to know and believe that what you created was great. NBC stood by Cheers because they knew it was great material that needed to be seen. Crema makes great coffee to accommodate the new office workers. If it’s not great, no amount of marketing, strategy or luck will change the equation.

Believing you can become successful just by existing is the worst decision one can possibly make. There are far more examples of long-lasting hit entertainment due to savvy marketing and strategic placement than examples of entertainment hits that “just happened”. Think all you need to do is make great music? Play the lottery. Think you need to put in hard, strategic work to find success? You’ve got a shot.

ATTENTION DEFICIT DISORDER

Your music is having difficulty being heard because you can’t get people’s attention. This is not a new idea, but it’s one whose problem grows exponentially daily. A few things popped in the blogosphere this week that emphasized the industry should be figuring out how to combat people’s ADD more than anything.

First, in an interview on evolver.fm, long time music blogger Sean Adams bemoaned the slow death of MP3 blogs. While bloggers took over gatekeeper influence from publications like Rolling Stone in the 2000s, these same people are finding their influence waning as people’s individual social feeds are influencing their circles. That may not be an issue for some, but for new artists looking to break, it becomes a problem. As Adams points out, he used to hammer away at an artists’ importance until the audience catches on. Social feeds, on the other hand, are only focused on talking about things that are shiny and new. As he says so eloquently, “I’d argue that an obsession with the new has been more damaging to music than piracy.” That’s a classic symptom of anyone with ADD.

This led to a reminder by Disc & D.A.T. publisher Steve Meyer of a quote made 2 weeks ago by Rio Caraeff, the CEO of VEVO. He said, “Piracy is a bit like the war on drugs, it’s an unwinnable war…but I think the solution is to provide access to entertainment to as many people as possible, through a variety of different models.” While it’s always refreshing to hear that fighting piracy is a waste of time, the solution offered is not ideal either. Providing wide access, which has been growing, seems like a great thing for many. However, this just leads to further difficulties for those looking to break in. With wider access comes larger difficulties in discoverability. Most people, faced with too many entertainment choices, will just default to what is safe or what they know. Couple this access with Sean Adams’ observation, and we just create a constant ADD assault where no new music sticks.

This assault was felt by many thru industry blogger Bob Lefsetz. After commenting on an unsigned artist that actually got his attention, he got assaulted with many more unsigned artists that led him to berate people for sending him their music. This didn’t sit well with many, including my artist friend Syd who asked, “If Bob Lefsetz isn’t listening, who is?” Syd says it’s Bob’s obligation to listen to music, where I believe it’s the artist’s obligation to effectively command attention. Whose issue is it when Bob’s ADD kicks in with the onslaught of requests?

Whatever the communication method, I always respond to the ones who commanded my attention, who breaks thru my personal ADD tendencies. Berating a gatekeeper or listener for not listening is not their fault, it’s your fault. It’s your job to figure out how to get someone to see you and keep them engaged. It is certainly harder, but that just means you have to work smarter. Bob got slammed with artist emails in the last 48 hours. Do you know how many people reached out to him via Twitter to listen to their music in that same time? One. That’s right. Only one. That doesn’t guarantee Bob will hear the music either, but I think I’ll more likely be seen when I’m the only one doing it instead of following the herd.

And whether you agree with any of the above or not, it doesn’t matter. I’m over 500 words in and I’ve got your attention. Enough to mention I help solve many of these attention problems with my latest book Hack Your Hit. I did it by providing worthwhile content. I promoted it solely by placing it on my Twitter and Facebook feeds. You didn’t have to come here. You certainly didn’t have to read this far. To Bob’s point, I didn’t force this upon you. You came to me. And I thank you for it.

To further thank you, I want to hear your stories of how you successfully got attention. Email me your stories in 150 words or less to jay futurehitdna com. In a couple of weeks, I will pick the 5 stories that got my attention the most and post them on this blog. Each of the selected stories will get an autographed copy of my new book Hack Your Hit and a free DigSin T-shirt (that’s my label that gives its music away for free if you didn’t know).

ADD is a fact of life now in so many aspects of daily life. It’s not pleasant, but it’s reality. To understand that the music fan likely suffers from it is to figure out the best way to work against it. Ignoring it as a hurdle to success just guarantees you’ll trip over it and fall on your face. I look forward to reading your successes and seeing how well you command my attention.