Recording Industry sales sink to a new low.

I’ve compiled a selection of some of the most important music industry news of the past week, along with a few of my own thoughts. Let me know in the comments section if you think I’ve missed anything notable.

Music News from Around the Web

Album sales at lowest point in decades

The good news just keeps rolling in!

For the week ending May 30, the U.S. music industry sold a total of 4,984,000 albums, according to Nielsen Soundscan. This figure, which includes new and catalog releases, represents the fewest number of albums sold in one week since Soundscan began compiling this data in 1994.

By comparison, album sales for the week ending May 31, 2009, totaled 5.76 million. The highest one-week tally recorded during the Soundscan era is 45.4 million albums, in late December, 2000.

Let’s not kid ourselves here, this is grim stuff. However, as anyone who has been reading this blog for a while knows, this is not the whole story.

Record sales continue to decline – rapidly – but the music industry as a whole continues to grow and show incredible potential. So, independent musicians take heart. These numbers are only one piece of the puzzle that continues to add new pieces each day. That means that it is growing more complex, but also more diversified. Which is good news, especially when we are watching the flagship go belly up into the water. Read the full report at Billboard.

ArtistData acquired by Sonic Bids

ArtistData acquired by Sonic Bids

Sonicbids has acquired ArtistData, a popular platform that many musicians and labels use to simultaneously update their content across the web. The move signals an expansion for Sonicbids beyond its popular electronic press kits and gig opportunities to also helping artists promote their shows after they’ve been booked. ArtistData founder Brenden Mulligan has been named Vice President of Strategic Development for Sonicbids.

This came as a bit of a surprise to me, only because last year I met with ArtistData founder Brenden Mulligan near his home-base in Chicago, and he seemed pretty excited about other plans he had for the service. It sounded at the time that his play would be data analytics, and perhaps that’s part of what made ArtistData so attractive to buyers. Sonic Bids was not the first suitor to approach Mulligan, but it looks like he was finally made an offer he couldn’t refuse. Read more at Hypebot.

Social works for Spotify.

Spotify goes social and watches premium subscriptions double

More evidence that the power of the social graph in music discovery:

The daily number of people signing up for Spotify’s paid Premium service has doubled since the update to its desktop client in late April that added Facebook-fuelled social features and the ability to play a user’s locally-stored music.

That’s according to Spotify’s UK managing director Paul Brown, in an interview for the latest Music Ally Report. “As we put Social and Local out there, Premium subscriptions doubled on a daily rate,” he says. “For us, it’s increased consumption, it’s brilliant for discovery, and we’re getting a net positive increase in people stepping up the ladder to pay.”

Read more at Music Ally.

MySpace Co-President latest to walk out the revolving door

In a shocking turn of events, MySpace has confirmed that Co-President Jason Hirschhorn has left the company a mere four months after accepting his co-leadership role with Mike Jones. Who would have thought when MySpace announced it was appointing Co-Presidents that it would end badly? Read more at Billboard.

Reports claim AOL to sell Bebo

…and the world asks, “What’s Bebo?”

In the scale of huge corporate mistakes, AOL’s acquisition of Bebo in 2008 ranks pretty highly. AOL paid $850 million for the social network, then watched it fade into mediocrity as Facebook left it for dust. Now a series of reports have suggested that AOL has agreed a deal to sell Bebo to a private investment group for a mere $10 million. Ouch.

Read more at Music Ally.

More Music Industry News:

Record sales for week ending 6/13/10 at the Lefsetz Letter.
Music publishers file suit to shut down LimeWire – HypeBot.

Flava Flav may soon have to downgrade to some smaller bling.

I’ve compiled a selection of some of the most important music industry news and commentary the past week, along with a few of my own thoughts. Let me know in the comments section if you think I’ve missed anything notable.

Public Enemy Cut Their Sellaband Target to $75k

Hip-hop legends Public Enemy burst onto the crowd-funding scene a few months ago with an ambitious $250,000 target. Since then they’ve been having a bit of trouble reaching that goal…

“We have learned that the fan funding model is still not fully developed and, as a result, a $250,000 fund raising effort, while possible, will take too long to accomplish,” explains a new post on their SellaBand page. “We now believe that a $75,000 fund raising target will fulfill the needs for a new recording project and is much more appropriate for the strength of the existing SellaBand model and the current economic climate.”

The language of their announcement is careful not to accept too much blame for their failure to raise the amount of money they originally hoped for, but I also think they have a point. So far, fan-funding seems to be working most effectively with smaller projects and more reasonable goals.

Could it also be that fans are hesitating a bit to fund a legacy act like Public Enemy that has a) already seen much success and b) lacks relevancy for many of today’s hip hop fans? Read more at MusicAlly.

Canadian Copyright Laws May be Getting a Reboot

Ah, the endlessly complex world of copyright law. The Canadian government is debating a bill that would effect the way its citizens are allowed to interact with the digital music they have purchased.

The bill, which was introduced in Parliament yesterday (June 2), is intended to modernize copyright laws that were last updated in 1997. At present, it is illegal for Canadian citizens to copy CDs onto digital music players.

“Simply put, our law governing copyright has not kept pace with the breakneck speed at which digital technologies are moving,” Industry Minister Tony Clement told a televised news conference in Montreal.

Read more at Billboard.

More Details Surface About Google’s Music Services, Including a Really Creative Name

Google announced it’s second foray into the world of digital music a couple of weeks ago (the first being music streaming and download results within Google search.) In very Google-like move, they have apparently selected to call the service ‘Google Music.’ A little on the nose, maybe, but it certainly get’s the job done. The real question is, will their product be compelling enough to steal some of Apple’s thunder as they most likely reveal a seriously revamped iTunes next week? Read more at TechCrunch.

But is it worth the fee?

Rdio.com is Like Lala, but Without All the Fun?

Skype and Kazaa founders Janus Friis and Niklas Zennstrom unveiled more details this week about their cloud-based music service Rdio.com.

It compares people’s music collections to its own catalogue, then lets them stream the songs that match to any device, including web browsers and mobile phones.

Sounds a whole lot like my favorite music service Lala (RIP), except:

The service will cost $4.99 a month for web-only access, and $9.99 a month to include mobile access via iPhone, BlackBerry or Android handsets.

Also, no mention of anything similar to Lala’s 10 cent cloud-based music purchases, or what kind of recommendation engine it will feature, if any. So far it looks like the world may have to wait a bit longer for a real replacement for Lala. Will Apple deliver? Read more at MusicAlly.

More Music Industry Headlines:

The ‘Nuts and Bolts of Touring’ is a great case study from OneWorkingMusician.com.
Lady Gaga, Justin Bieber managers talk tech and social media promotion over at Hypebot.
Gorillaz replace U2 at Glastonbury festival via Billboard.

Record Store Day 2010

Even as many in the music world continue to trumpet the death of the physical release format there is growing evidence that these claims have been grossly exaggerated.

There is no denying that digital has taken hold of the music-listening market. Digital sales continue to climb, and new records are set every few months by artists such as Lady Gaga, The Black Eyed Peas, and others.

However, there is also no denying that the revenue being driven by digital sales pales in comparison to the figures the recording industry once saw during the ages of vinyl and the CD. The new artists might not notice the deficit, but the old-timers and record label executives have certainly felt the pinch in a big way.

The album post-iTunes

At a recent conference in the UK called ‘Never Mind the Box Set: The Album Post iTunes,’ participants bemoaned the negative by-products of the new digital world.

“We have cheapened music so badly,” admitted Paul Conroy, formerly of Virgin Records U.K. and one of the panelists. He pointed to the inflated prices of the past decade as one cause of the CD’s decline. “It was greed and short-termism because we wanted gratification today and we screwed up.”

The participants acknowledged what the DIY music world has understood for years now – that relying on digital downloads as a primary revenue source is very risky due to the ease of digital copying. “If one CD ends up on 10 different iPods, how do we make money?” asked Steve Bunyan of Union Square Music. (Please join me in welcoming Steve to the 21st century…)

Physical releases in the 21st Century

In response to the uncertainty surrounding the recording industry as a whole, there was some interesting data presented that sheds a positive light on the sale of physical formats such as vinyl and collectible box sets.

The most interesting information came from a report by the IFPI, which is based in London and represents the recording industry world-wide.

The report was described as the ‘first ever industry-wide segmentation of the British music-buying public.’ It concluded that revenue from music sales was not behaving the way the industry pundits and analysts were predicting it should. In 2009 73% of music sales in the UK were from physical formats such as CDs and vinyl, with only 19% digital, and the remaining 8% consisting of performance rights.

The report itself doesn’t appear to be online, but you can read Billboard’s coverage here.

Not all consumers are the same

73% is a big deal. It means that while many have shifted their music consumption habits to digital downloading (whether legal or illegal) there is still a healthy subsection of consumers looking to spend their money collecting physical formats, particularly vinyl.

This data might be surprising to many new music industry pundits, but it’s encouraging news for musicians and record labels.

The IFPI report actually breaks the total physical spend down into different categories, including Physical Fanatics, Traditional Physicals, and Digital Dabblers. Each category, as the names suggest, exhibits a different blend of music-purchasing habits. I think these are great distinctions, because they avoid the kind of blanket generalizations that cause artists and record labels to throw all their eggs in one basket – the way so many have done with digital.

Musicians and labels would be wise to pay attention to these demographics because they could provide useful insights into how their particular audience wants to consume their music.

For example, if you are only selling (or giving away) digital downloads, you may be missing out on a significant number of fans that would be interested in purchasing physical products such as vinyl records. Those vinyl record sales mean revenue. It doesn’t take an MBA to understand that if your fans are willing to give you money for something, you should be offering it.

Vinyl is alive and well

It may sound like common sense to offer multiple formats for your fans to choose from. Unfortunately, the DIY movement has been so zealous in declaring digital the Savior of the Unsigned that many have forgotten that there are still many, many people out there who want something physical to purchase.

It’s all part of a natural progression. Something new arrives on the scene and the industry watches as it begins to take hold of the market. They see that nice upward trajectory and the projections begin to grow more and more fantastic with each passing month. Digital is going to take over the world! The CD is dead! Physical releases are dead! The ALBUM is dead!

Is the CD dead? If it’s not it certainly seems to be on its last breath. But physical releases in general? The album itself?

I wrote an article a few months back about a resurgence of vinyl records that continues to grow even as CD sales – and recorded music sales in general – continue to decline. That data, along with the information collected by the IFPI report, suggest strongly that we all jumped the gun a bit in our doomsday projections.

More people are buying vinyl records. The majority of these vinyl releases seem to be special editions with unique packaging, or box sets that give a new depth and design edge to an existing catalogue. These types of releases use the sonic advantage and nostalgia of the vinyl format to give fans something of value. And, so far at least, fans have proven that they’re willing to pay for that value.

Artists – are you taking advantage of this?

Photo credit: Tom Mcshane.

Nice to see winter hand over the reigns to spring. Mind you, winter here in Toronto was mild, some might even say non-existent. It is even nicer to see people trading their hats, mitts and down-stuffed jackets for sunglasses, short sleeves and beers on the patio. Along with spring renewal comes a slew of new album releases, concert announcements, music conferences and meet-ups.

I had a chance to attend Canadian Music Week mid-month which I wrote about here. I found it quite interesting and fascinating to sit in on a variety of executive level music panels to hear ideas & opinions being vigorously discussed which is quite different from reading blog posts and news releases. I think generally there is more optimism than you would expect but it’s also because more people are coming to realize that time, energy and resources are being misspent in ways that haven’t proven productive and never will.

Clay Shirky in his latest think piece, “The Collapse of Complex Business Models” fittingly describes what happens when stress hits complex societies and/or industries as they become far too inflexible to respond. It’s not that they don’t want to change, it’s because they can’t. There is more than enough historical precedence that shows countries, empires and industries who, after years of domination and success, find themselves quickly unraveling and never able to maintain their former glory.

He ends his piece by describing what happens to institutions when they collapse. If we consider the music industry today which is facing monumental technological, economic and cultural shifts, the battle raging between the old system as it fights to preserve the status quo and the people who have broken away from the industry is a clear indication that we are in the very early stages of an industry refresh.

When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.

We have the likes of Apple, Pandora, Spotify and hundreds of other music startups, artists, even new music labels/companies, who are shaking things up by building new business realities. For any student of history and economics, this is very interesting to witness firsthand.

Investments and Funding

March was a quieter month with much less investment activity compared to January and February. Q1 2010 closes with an approximate investment amount of $99.6m. As I have noted in past recaps, this isn’t a comprehensive list and the numbers have been pulled from public sources but it still gives us a sense of general investment activity in the music tech space. If I missed any investments, please don’t hesitate to comment below.

• Sonos Confirms $25 Million Investment From Index Ventures
• Beamz, maker of interactive music products, raises $2.48m
• The Echo Nest Gets $500,000 Grant From National Science Foundation
• Regen manufacturer of solar-powered audio products, raises $1.6m in funding

Billboard has been tracking the hottest music-based startups, which have predominately been music service based companies, meaning pretty much anything but streaming or download services. Billboard has tracked 136 deals in 2008 and 2009, with 49 deals involving 45 companies that provide music services. 36 deals amounted to $417.5 million with $101m of that being VC based. Very interesting stats!

Music Services and Apps

Rootmusic- This is a slick little music add-on for artists who want to build a MySpace-like band page in Facebook. It lets fans listen to streaming music (using a Soundcloud player), view tour dates, photos and read a band’s bio. Rootmusic joins a list of other Facebook band apps like LP33 and My Band.

Immitter – A new music delivery service that is aiming to help unsigned, indie bands get heard. Bands can enter details/keywords specific to their music (genre, location, BPM) which helps users to discover new music, Pandora-style (as some are describing it). To be really effective as a music discovery tool, this service is going to need a massive infusion of artists to make it worthwhile for fans.

Project Playlist Seeking More Funding, In Talks with AOL- $23m in funding so far, legal troubles with two out of four music labels and the company is looking for more money? Tough pitch. I didn’t know that Owen Van Natta, former Facebook exec and former CEO of MySpace was CEO of this startup. He wasn’t there long enough (5 months) for anyone to really notice?

IMHO is a new music, video, radio and TV cloud-based multimedia service and reading the press release makes your head spin. Bleeding-edge? Watershed moment? Next generation? I gave it a spin and IMHO, it’s not very good. The service is slow, cluttered, not very user-friendly and tries to shove too much in a tiny widget.

CBS hopes for Last.fm profit in 2010 – It took me a while but once I really gave the service a chance, Last.fmhas become my go-to music service. They linger in the shadow of Spotify, Pandora and MOG and claim that subscriptions make up 25% of their revenue. It certainly helps having the muscle of CBS behind them, because Last.fm may not have survived independently. I’m definitely cheering them on. Check out my music Last.fm profile hereand lets connect! In other related Last.fm news, they have just published their long-awaited API update. It will be interesting to see what kind of new and updates apps developers might start working on.

Q+A with Claes Loberg, CEO of Australian music service Guvera- With Guvera’s US beta launch on March 30th, this is an interesting interview that provides deeper insights into this new ad-support music download service.

Muziic for iPhone- The desktop version of this music service is now available for iPhone/iPod Touch letting you search for music and videos on YouTube, tune in to hundreds of internet radio stations, build a playlist or browse featured tracks and albums.

Ultimate Guitar Mobile App- My favorite guitar tabs site now has an iPhone app! It is currently the number one paid app and a top fifty overall app in iTunes.

Snowtape- Do you remember the days sitting beside your cassette machine that was hooked up to your radio, waiting to record your favorite top 40 hits of the day? Well, here’s another internet radio player app but more interestingly lets you record individual tracks from the radio stream. Given the amount of music that can be downloaded (legally or otherwise) or accessed, not really sure why anyone would spend much time recording streams on the run. This experience will never compare to the early days of home taping.

Venue.FM- A web mash-up with a simple and clean interface powered by Songkick. Pick your city and pick a period (limited to current day, next 7 days or next 30 days) and a list of concerts is presented to you. Beyond the usual information (date, venue, location), a batch of songs from each touring artist is available for you to listen.

BYO.FM – Michael Robertson (of MP3.com and MP3tunes.com) is at it again with his latest idea that lets people program their own radio station with news, weather, traffic sports and music. CNET provides a good description of the service. I gave it a try and I really like the overall concept and I believe this is an idea that commercial radio should explore further.

Mflow- Another music recommendation platform that follows a Twitter approach. Music fans follow each other, recommend music along with a tweet size comment, each recommended song allows for a full first time listen and subsequents listen are 30 second clips (similar to Lala). When someone buys a track you recommend, you get 20% of the purchase price. This is similar in concept to Blip.FMbut mFlow has partnered with a number of music labels and is focused on getting people to buy music. Currently in beta and only available in the UK.

Universal Music Group has just released their version of Guitar Hero/Rock Band/Tap Tap Revenge called Six String. Includes six songs, they offer twenty additional tracks available for in-app purchase.  I gave it a try and it is a very well designed app, the first to be released directly by a major label.

MOG showcases iPhone and Android apps- Expected to be released in Q2, will allow users to download tracks for offline listening, which is something Spotify currently offers in their iPhone app.

Song.ly, Twitter Music Sharing Service Up for Grabs for $50,000 – A much simpler, no-frills version of Blip.FM, Song.ly is a service that lets you search for and share songs on Twitter. It appears that someone has put in a bid for $50k, although I am wondering if the bid is legit and whether a deal will go through.

Interview: Zach Zalon On Hello Music’s Opportunity Engine For D.I.Y. Musicians – Hello Music combines technology with professional A&R to identify artists and connect them with career opportunities. This type of music service proves that technology is only a part of overall effort in building a music career.

22 students + 10 days + Echo Nest = 7 mobile apps!- A group of mobile development students at Olin college just completed the mid-semester #mobdev contest. 10 days to create a compelling product prototype on the Android platform using the Echo Nest APIs.

Opinions, Insights and Analysis

Music 4.5was held in London on March 4th, that brought together tech start-ups, serial entrepreneurs, investors, artists, band managers and key industry players to talk, strategize, and debate the direction of the music industry. Musically has provided great insights into the panels and discussions that went on:

• The communications gap between music and tech companies
• A lot of music services, but where are the businesses
• 10 music startups pitch their wares
• Music startups pitch to teenagers

Dave Kusek on The Cloud, Topspin, Hype Machine, SoundCloud, and the death of MySpace – “Great music is more important than anything else”. True. Very true!

The Human Recommendation Engine – Algorithms have come a long way in automating music recommendation and discovery, but nothing will ever beat talking to a passionate friend or trusted source about new bands and new releases. It’s about the conversation and slowing life down a bit so we can actually enjoy and connect with the music in more than a drive-by fashion.

The Truth About What We’re Paying For Content- People love to debate the merits of free vs. paid content. But overlooked in all this is the cost of access to that content, that’s where the action is. We’re paying more than we ever have to receive our movies, news and music, according to Forrester analyst James McQuivey.

5 Reasons I’m Still Not Paying for a Music Subscription Service – Hard for most people to justify paying for something when so much of it is already available online and which will remain that way. I do always wonder had the labels initially came together to combine their catalogs and hired the best music technologists to build a solid, user-friendly application, would the story be different? Would they have got it right? Can it even be done today?

How Important is Gaming to the Music Industry? – According to a games developer, “Industry insiders are learning that video games are the radio and distribution channel of the 21st century”. I don’t agree that gaming is a primary music distribution channel because how many people buy games because they want to hear the music first? Music is an add-on that enhances game play.

Upcoming Events

• Replay: Symposium on Sound Sampling – Syracuse, NY, April 9th, 2010
• NAB Show- Las Vegas, NV, April 10th to April 15th, 2010
• Envisioning 21st Century Music Business Models- Berklee College of Music, Boston, MA – April 15th, 2010
• ASCAP “I Create Music” Expo – Los Angeles, CA – April 22nd to April 24th, 2010
• Music Hackday- Amsterdamn, Netherlands, April 24th to April 25th
• Musexpo 2010 – Hollywood, CA – April 25th to April 28th, 2010
• NARM – Music Business Convention – Chicago, IL – May 15th to May 17th, 2010

Gabriel Nijmeh is a software business analyst, passionate music lover and guitar player. He currently advises a couple of music startups, including Mediazoic, a real-time social DJ platform and co-founded the Toronto edition of OpenMusicMedia which brings people together to openly discuss the intersection of digital music, media and culture.

Ok, we're back now.

As you may have noticed, things have been a bit quiet around the site lately. There is no shocking top-secret reason for this – I have simply been moving across the US and haven’t had the time to post. Contributor Rich Huxley has also been holed up in an underground crypt (yes, a crypt) recording his band Hope and Social’s sophomore album ‘April.’ About the only person around here who has been doing his job lately has been Gabe Nijmeh whose excellent Music Tech Recap for March will run Tomorrow.

Thankfully, things should be getting back to normal-ish soon. There are a lot of exciting things going on in the new music business and we’ll be doing our best to break it down and continue the conversation over the coming months.

Here’s what you can expect from Creative Deconstruction in the immediate future:

• Music and Technology Recap March Edition – More excellent news and analysis from Gabe.
• The Barriers of Music Consumption: Past and Present - The first in a series of three essays co-authored with Kyle Bylin of Hypebot.
• The Deconstruct – Expect a new issue of our monthly newsletter to hit your inbox in a few days. Unless you aren’t signed up for our mailing list, in which case you’re out of luck (hint hint…)

Thanks for sticking around, and I’m looking forward to getting this content out there and digging into your comments!

A good old fashion sing-a-long.

Digital technology continues to transform the music industry. Most believe that this transformation is causing the industry to evolve into something new that will resemble nothing that has come before it. Others are beginning to suggest that perhaps the music industry is instead reverting back to a state closer to how it all began. What will all of this mean for musicians?

I hope all you wonderful readers have had the opportunity to read through the comments of last month’s Can Music Stand On It’s Own piece. If you haven’t I highly recommend that you do yourself a favor and spend some quality time reading through them. There’s a lot of great insight in there from some truly bright folks.

One subject that kept surfacing is the changing role that fans may eventually play in the creation and performance of music. The idea is that as technology improves it will become easier and easier for ‘non-musicians’ to create music and become instead amateur musicians.

This has already begun in a big way. Garageband comes preloaded on every new Mac. Samples and loops exist for every instrument, timbre and sound imaginable. Auto-tune can whip even the most tone-deaf of voices into a presentable shape. Electric guitars can now tune themselves and a single synthesizer has the versatility to replace every member of the band.

The future that some are predicting takes these advances even further, imagining instruments that essentially play themselves and computer programs that turn music theory into an automated process.

What does this mean for music? When anybody can participate in music the gap between the capital ‘A’ Artist and everybody else eventually evaporates.

Is Fan Participation something new, or something old?

Before getting into what all of this may mean for professional artists and the music industry, it’s important to get some perspective.

There are those who talk about this idea of fan participation as though it is the next evolution of the musical experience. The coming ‘amateur age.’ Some see it as an opportunity – for example, artists who encourage their fans to participate in the creation and performance of their music can potentially cultivate loyalty and buy-in that can lead to greater exposure and increased revenue.

Others see it as the final nail in the industry’s coffin. The amateurs will, by virtue of their much larger numbers, eventually overtake the professional musicians. The mystique of the artist that has prevailed for centuries will fade when greatness no longer comes at the expense of thousands of hours of practice and sacrifice. Business will grind to a halt. If anybody can do it who’s going to pay for it?

Another group of folks sees this possible future as simply an inevitable normalization. According to blogger and music teacher Ethan Hein (who is also one of the lovely commenters from last week,) “The specialization of music to professionals or highly dedicated amateurs is a historical and cultural anomaly. For most of world history, music was something that everyone participated in as part of daily routine.”

In other words fan participation is not an evolution, it’s a kind of primal baseline. It’s a center that music culture is forever drawn into no matter how far out it may venture at certain points throughout the course of history. Everyone is supposed to participate in the musical experience – the professional musicians of the 20th century are the outliers, the exceptions. The very idea of a ‘music industry’ is based on the inaccurate assumption that this ride we’ve been on for the past four decades would last forever.

Is the professional musician really a historical anomaly?

If music as a viable business is destined to be nothing more than a glittering speck in the sands of time there are some serious implications. With substantially less – or even zero – money to be made the music industry as we know it will effectively cease to exist. This goes beyond creative deconstruction – this is essentially just deconstruction.

Yet before we all resign ourselves to this fate and toss out the practice routine, I have some issues with this conclusion.

First of all the idea that with the exception of the 20th century music has always been “something that everyone participated in” is flawed. Sure, over the centuries taverns have been filled with rousing choruses and prison lines sang spirituals to the slow beat of the pick-axe. These were community experience – there was no training or discipline required to participate.

However, there have also been for centuries traveling musicians and performers playing for tips or food as a bartering tool to acquire goods or crafts. There is clear evidence of highly trained musicians in ancient Greece and Rome. There are even Old Testament references to skilled artists and musicians who spent years honing their craft. In other words, there has always been a division between artist and amateur.

Don’t give up – but don’t get comfortable either

With that in mind, I  don’t think there is anything wrong with working hard to ensure that musicians continue to be able to earn a living for the art they create. In fact, I think that to do anything else would be irresponsible. Of course, I’m not trying to suggest that good folks like Suzanne Lainson and Ethan Hein are suggesting that we just give up on music as a profession. I do see how easy it might be for many musicians to consider their version of the future and get discouraged.

Music will remain a viable business as long as artists and those supporting them continue to find creative solutions to new market challenges. Whether it signals the pop-pocolypse or not, the ever-shrinking divide between the artist and the amateur poses a challenge. But it also provides a whole new world of opportunities for creative artists to find ways of engaging with fans and driving revenue.

This is certainly not the time to give up on the dream of creating and performing music for a living. It isn’t an easy dream to realize, and it isn’t getting any easier, but the opportunities are there for the taking.

At the Millenium Music Conference 14

This past weekend I attended the 14th annual Millennium Music Conference in Harrisburg, PA. Fourteen years is a long time for anything to last in this business. I would imagine that panel topics have changed quite a bit since the conference first appeared on the scene in 1996.

This year members of over 300 bands were in attendance on Friday and Saturday, each hoping to return home with some new strategies for their music careers. I spent most of my time at the Live Music Machine booth, where I had a great view of the throngs of musicians as they moved from panel to panel. There were more than a few dazed looks.

On Saturday I sat on a panel with David Sherbow, Co-founder of Live Music Machine and veteran record promoter. We spoke to an energetic room packed full of musicians, artist managers and other members of the business. Lou Plaia of ReverbNation was in attendance and added a few of his own insights to the discussion.

Also notable were the two Brits who ended up in our room. They just so happened to be former bandmates of Creative Deconstruction regular contributor Rich Huxley and nearly burst when I used his band Hope and Social as an example. Of course, I made sure to catch them afterward to get a few embarrassing stories about Rich out of them.

A different kind of 360 deal

Kingsfoil performs at the MMC14 showcase

Our panel was ever-so-tastefully titled “Grabbing Your Music Business By The Balls – Do a 360 Deal with Yourself  and Get Paid.” (Anyone who has met both Dave Sherbow and myself should have no trouble guessing which one of us came up with that one.)

Much of what we talked about came straight out of the pages of this blog, as well as a new e-book of Dave’s which we gave out to everyone in attendence. We tried to provide practical, realistic advice for emerging artists to take back home and apply to their careers.

Everything we covered centered around the idea that artists now have the freedom to take control of their business. The term ’360′ has been thrown around a lot in reference to deals that some labels and promoters are offering that entitle them to a piece of each different revenue source available to their artists. We wanted to promote a different kind of 360 model, one that put the artist at the helm.

Artists no longer need the major record labels to run a sustainable business. The freedom exists now to build their own team and make their own decisions about what to sell, what to give away, where to play and who to partner with.

Online engagement begins offline

Lou Plaia of ReverbNation, Aaron Burton of FizzKicks, Chip Schutzman of Miles High Productions and others.

We also tried to balance the web-heavy message that seemed to be dominating the conference by focusing on the importance of real-world fan engagement. The most valuable fan relationships begin offline. Live performances, real face to face conversations, taking pictures with fans – these activities create a connection that you just can’t get with someone you’ve never actually met.

That doesn’t mean that online tools such as social media, blogging and email campaigns aren’t important. In fact, it’s more important than ever to maintain these fan connections and tend to them consistently to keep people engaged. There is really no better way to do that than to keep the flame alive online.

Nevertheless, we deliberately stayed away from discussions of social media because we knew the conference-goers were getting that information elsewhere. Instead, we made a point to revisit a much more traditional tool – the mailing list. And in the spirit of practicing what we preached, we also took down the email addresses of each person in attendance to add to our own mailing lists. By now everyone on that list should have received an email containing the free e-book I mentioned earlier as well as a couple other goodies as a thank you for signing up. Don’t underestimate the value of an email address!

All in all it was a great conference and I’m grateful to have met a bunch of talented emerging musicians and members of their teams. For more info on the event and some exclusive videos and downloads make sure that you sign up for the new Creative Deconstruction newsletter, The Deconstructionist.

Chi-town, host of the New Music Seminar Oct. 09

The music industry has gone through significant changes in the past decade, and many of the major players have been slow to understand or embrace the changes. Fortunately there have been many encouraging signs recently suggesting that’s slowly beginning to change.

I attended the New Music Seminar in Chicago yesterday and had the opportunity to hear some good discussions about the past, present and possible future of the industry. The seminar, which was put on by Tom Silverman of Tommy Boy Records, seeks to be an incubator for new ideas and strategies to help artists and music professionals navigate the changing business. Panel members included Lou Plaia of ReverbNation, Ariel Hyatt of CyberPR, Bryan Calhoun of SoundExchange, Amy Phillips of Pitchfork and Martin Atkins, author of Tour:Smart.

I have tried to distill the main messages of the seminar into four bite-sized chunks. Much of this won’t be new to you if you’ve been reading this blog for a while, but these concepts are worth repeating. I’ve also put together a collection of the most interesting and entertaining quotes of the day.

Continual streams of creative output

Just about all the panelists seemed to agree that artists need to shift their focus from the traditional one-album-every-two-years mentality and embrace a more consistent schedule of individual track releases. I’ve written about this a few times, most recently here. It was good to see a few industry leaders recognizing the role that an artist’s music can play in fan engagement.

One analogy that was made compared the traditional album model to hardcover book releases, and new release strategies to subscriptions and periodicals. One you read once (though you may enjoy it immensely) and the other you develop a long-term relationship with.

The seminar’s co-founder Tom Silverman also had some good data which projects that single track downloads will be 5x higher than full album sales by 2012.

1,000 True Fans

One buzz phrase that popped up in just about every panel was the ’1,000 True Fans’ concept popularized by Kevin Kelly. For those who are unfamiliar, the idea is that a True Fan – the kind of fan who buys everything the artist puts out – will spend about $100/year on their favorite artist. Once an artist amasses a base of about 1,000 of these they’ve built a sustainable career.

Silverman countered objections that $100,000 isn’t enough to support a four or five piece band by pointing out that the total should be closer to $255,000 once the ‘non-true’ fans spending is counted. This makes a lot of sense, because the True Fan category is likely just a small percentage of an artists overall fan base. So even though less committed fans spend less, it adds up due to their higher numbers.

Fan Relationship Management

This was arguably the most important theme of the seminar. As social media continues to dissolve the middlemen artist have the opportunity to cultivate authentic, long-lasting and ultimately profitable relationships with their fans. Ariel Hyatt of CyberPR was a fierce proponent of social media throughout the panel she participated in. She pointed to several artists who have built profitable careers as musicians through online networking alone – without going on the road at all.

Several panelists also repeatedly admonished bands to take advantage of their merch tables as an opportunity to connect with fans. This kind of face to face engagement goes far beyond selling more merch (though I’m sure you’d be ok with that, too.) Meeting fans and having real conversations can significantly deepen the fans’ buy-in and increases the chances that they will come back to see you next time you’re in town. Maybe they’ll even bring a friend or two. Basic stuff, but so often missed by touring bands.

By the numbers

During his opening remarks CEO of Tommy Boy Records and New Music Seminar founder Tom Silverman went through some eye-opening statistics. He laid out how drastically the music marketplace has changed over the past several decades through a series of graphs,  and used the data to project where the current trends might take us in the next four years. There was quite a bit there, but I’ve included what I thought was the most interesting. The statistics below help to explain why album sales can no longer be the primary means - nor the primary measurement – of an artist’s success:

• There are 5,000,000artists with active MySpace pages.
• 105,575 albums released annually.
• 1,515 artists selling more than 10,000 per year.
• Just 200 of those artists are new artists.
• Only 110 artists sell more than 250,000 albums per year.

Quotables

“These days there might be 5 people in your band and only 2 at your record label.” Martin Atkins on why artists need to learn the skills necessary to run their own affairs.

“There’s a place for fantasy, there’s a place for playing dress-up.” Amy Phillips of Pitchfork on authenticity.

“Rock bands want to keep a little mystique, often a disdain for the merch table. I don’t recommend that for anyone.” Steve Gerstman, head of Cut Merch.

“If somebody on the street says, ‘Buy my CD for $5 – it’s dope’ I don’t want to buy that! What if it’s blank?” Emerging hip hop artist Hollywood Holt.

“Make an event of every performance – do something weird.” Joe Carsello, talent buyer at the Metro.

“Pour gasoline on the sparks that exist. What if your fans are in Tacoma? Go there.” Martin Atkins.

“If I was a big fat ugly dude I would rap like a big fat ugly dude.” Hollywood Holt on authenticity.

“Touring is warfare – never take your country to war unless you are sure of the outcome.” Martin Atkins.

“Those Forrester Reports are bullshit.” Tom Silverman.

Questions? Comments?

Let me know if you found this summary helpful. I’ll be expanding a bit on more of the concepts presented at the seminar in later posts, so if you have any questions or comments please speak up so that I can make sure to address them. And by the way, if you attended the seminar and we didn’t get a chance to meet up make sure you send me a message so that we can do something about that.

Here’s a recap of what went on in the music industry over the past two weeks. Make sure to check out anything you might have missed and leave your comments. Know something we don’t? Submit a story.

Most Popular:

• Copyright and music – do great artists steal? – In light of the Coldplay vs. Satriani settlement we ask the question: is it ever ok to copy another piece of music? Where is the line?
• Head of Australian recording industry on the new music business - A  perspective from the major label side of the industry.

This Week:

• New music releases – September 22, 2009 – Pearl Jam’s Backspacer, new U2, Castanets, Müm, and Monsters of Folk.
• Is your release strategy driving fan engagement – or preventing it? – A “continual stream of creative output” will help keep your fans more engaged, longer.
• New music releases – September 29, 2009 – Cymbals Eat Guitars with Why There Are Mountains, new Avett Brothers, Ghostface Killah, and the excellent soundtrack to Where the Wild Things Are.
• Album review – Sufjan Stevens ‘Run Rabbit Run’ - A surprisingly engaging string quartet re-imagining of Sufjan’s all electronic sophomore album Enjoy Your Rabbit.
• Why music still needs the underground – Market cycles have compacted making it possible for music to go straight from the innovator to the mainstream. Does this mean the underground is dead?

Music Video Picks:

• Kings of Convenience ‘Boat Behind’

This Week in Music History:

1973 Phonogram announced they were increasing the price of their albums from £2.00 to £2.18 and de-luxe albums would go up from £2.29 to £2.38. Oh how things have changed… (This Day in Music.com)

There has been an explosion of choice in music. Technology has made it easier and cheaper than ever before for just about anybody to record and distribute their music. An unprecedented number of new artists and new albums flood the market every week, every day.

Not only is there an abundance of choice in new music, but listeners now also have increased options for acquiring and enjoying that new music. CD’s, vinyl, digital downloads, torrents, online streaming, radio, satellite radio, etc.

In spite of all this, music as a driving force in culture appears to be on a steady decline. Recorded music has clearly lost value in the eyes of consumers – the dominant mentality today is that music should be free.

The product of music is also losing market share to other forms of media and entertainment. Games are quickly gaining ground, as are mobile applications. Music is often a large component of these mediums, but as a stand alone product – or as a pure art form – it’s losing prominence.

This bugged me for a while. It seemed to me that when it comes to music the guiding principle should be ‘the more the merrier.’ Perhaps in a perfect world it would be. But the market just doesn’t seem to support this idea.

Instead, it appears that the music industry is suffering from what psychologist Barry Schwartz calls the ‘paradox of choice.’

Barry Schwartz has made a career of studying morality, decision-making and the relationships between science, economics and society. His book, The Paradox of Choice (Ecco 2003) deals with the way that societies with great abundance are witnessing a “near-epidemic” of depression. He argues that a surplus of choice in western culture is actually making us miserable.

Conventional western wisdom says that the way to maximize the welfare of citizens is to maximize individual freedom. Free individuals are able to maximize their own welfare, taking the burden off of the larger society. The best way to maximize freedom? Maximize choice.

Schwartz disagrees.

He argues that the explosion of choice that the western world has seen in just about every corner of society – retail, healthcare, identity, family, music – has actually had very negative effects on individuals. We experience paralysis – with too many choices to make, many people become overwhelmed and make none at all. When we do make a choice, we end up less satisfied. There’s always that nagging feeling that one of the other options might have been better.

And finally, the more options we are given, the higher our expectations rise. The feeling is that with 100 options, one of them had better be perfect. Of course, no choice is ever perfect, so we’re left with the feeling that we could have done better if we had just looked harder, or done something differently. The old adage proves true: “everything was better when everything was worse.”

In the music industry, the explosion of choice has had similar side-effects. Last year my wife and I each received thirty dollar gift cards to iTunes. Sixty bucks worth of free music – not bad, right? You’d think that we would have run right to the iMac for a downloading spree. But we didn’t. In fact, it took us six months to use up the sixty dollar credit on our account. Why? Because we just couldn’t decide what to purchase. There was always the feeling that there was something out there that we’d rather listen too. There was always some new album that was going to be released the next month that we wanted hold out for. The shear number of tracks we had to choose from paralyzed our ability to make a decision.

One of the benefits of the massive amounts of new music in the market today is that there’s a lot more room for experimental and niche artists that never would have made it past the old gatekeepers. So everyone should be able to find that perfect artist, right? Well, no. But the expectation for many has become that they should. All this serves to do is ensure that these listeners will be a little bit more disappointed in the music they do find.

It remains to be seen whether this abundance will be a long-term issue for music industry, and the western world as a whole. My guess is that systems will emerge to regulate the flow of new music somewhat – new gatekeepers. Until that day, we as artists and listeners should enjoy the benefits that do exist as a result of this explosion of choice. We should also do our best to support quality artists who are producing quality music. It’s still possible for talented artists to cut through the noise, but they’re going to need all the help they can get.

Schwartz did a presentation for TED Talks back in 2005 that is worth giving a look-see if you are interested in going into a bit more depth on this subject. It’s a great presentation, if a bit long – about 20 minutes.

Do you agree with this theory, or disagree? Can you relate to any of this? Let me know – I’d love to hear your comments.