Usurping Artistry

Dec 10 2011

Artists are one of the fundamental parts of the music industry. So much so they are the chicken to the egg of the business itself; no one knows which came first. This exact question or rather confusion has crafted the current climate of music today. Who is the artist? The term itself is styled in such a cursory manner that anyone who walks within five feet of any medium is in danger of being titled so. No industry is more subject to this phenomenon than the music industry. We live in an age of instant fame, where attracting tabloids supplements talent more so than garnering admiration for their craft. It seems that “artists” are now those who create a buzz as opposed to creating anything substantive. It’s for that very reason the music industry has become complicit in the dilution of the term artistry and its function.

In the past, the term artist held enormous weight to a musician.  No matter what genre, anyone who dared to take up that mantel had to prove themselves worthy. That was made especially clear when it came to the music industry. To be an artist, one had to be undeniably gifted. Although those who simply performed had similar functions, those deemed “artists” provided the rare glimpse of vocal and musical perfection that all others sought in their craft. The likes of Edith Piaf, Frank Sinatra, Shirley Bassey, and The Beatles set the standard for the artistry we revere in the likes of Anita Baker, Elton John, Prince, and Celine Dion. There is no doubt that these people have actively embodied and expressed a unique and individual talent. The music industry served to foster and amplify these artists. There was no serious need to augment, manipulate, or create the perception of talent through production. This is not to say that the industry did not have any direct impact on the development of their talent, but it was a tangible product that was easily ready for distribution.

Being informed of the historical markers of true artistry, how have we found ourselves in this current predicament? The title of “artist” is doled out almost indiscriminately. It very well seems that anyone who so chooses can be an “artist”. The music industry recognized the desire of the masses to be uniquely creative as an untapped market. It shifted its model from promoting ‘exceptionalism’ to feigning accessibility. With the use of advanced technology and a well-oiled public relations machine, “artists” don’t have to be skilled. Couple this with the viral video and social networking craze almost anyone can stake their claim to fame. This has produced a crop of recording artists who cannot sing, write songs, or play a single musical instrument. They simply possess that “it” factor that for whatever reason garners the attention which generates sales. Now, the rarities are the child singer we watched progress or the café singer who got a lucky break. A career in the music industry is now an option for every celebrity and public personality regardless of singing ability.

Read more about Usurping Artistry

Considering the vast array of music services that were launched this year, including Amazon Cloud Drive, Spotify, and Google Music, it seems a new order for the consumption of music is taking shape. Indeed, legislation is being reformulated to facilitate new forms of music consumption, with consumers substituting piracy practices and moving to legal services. However, the existing music rights management architecture is being challenged. The difficulty is to know exactly who all the copyright owners of a song really are–and where they can be located. Transactions for the appropriate licenses cannot happen without this knowledge.

For each song recorded there are two copyrights involved: one for the composition itself (©) and one for the sound recording (℗). The first one is owned and controlled by different songwriters and publishers, while the other is usually owned by record labels and performing artists. When each of those rights are owned by a significant large group of people, someone needs to locate all of them in order to obtain licenses that need to be negotiated on a case-by-case basis. Additionally, many popular artists are now emerging outside traditional corporate structures, and not having them in the current databases of copyright ownership impedes the legal consumption of music. Two recent examples are Choruss and SoundExchange. Choruss, an experiment meant to allow college students across the country to download an unlimited amount of music in exchange for a small fee built into the their tuition, was not able to gain traction because of the difficulty in finding out exactly who it had to compensate. SoundExchange, a Performance Rights Organization created to collect royalties from digital music services, has had millions of dollars stuck in its accounts for some time now because it simply cannot find the appropriate right owner.

CONTINUE READING

By Evan Kramer

Social media, in all its varieties, is making a big impact on consumer buying habits and becoming a legitimate promotional medium for businesses of every size. Yet, traditional marketing sometimes sits uncomfortably with social media. In particular, the six elements of the classic marketing mix, i.e. advertising, personal selling, public relations, publicity, direct marketing, and sales promotion, have to be reconsidered in the light of this new paradigm shift. It requires marketers to keep their products and, more importantly, their brands relevant and ever present in the minds of consumers.

A traditional marketing mix allows marketers a high level of control over the content that is communicated, and more importantly withheld, from their consumers. For example, paid advertising can be crafted and molded down to the finest detail while placement and volume of the content can be regulated on seemingly infinite parameters, such as income level, location, and gender, just to name a few. In addition, coverage in newspapers and television reports, while not completely under control, can be heavily influenced.

Continue reading about talking through social media…

In December 2010, Peter Spellman, head of Berklee’s Career Development Center, produced a listing of salary ranges for US music positions in performance, writing, business, audio technology, education, and music therapy. Here we reprint, with permission, the business salaries. The complete report can be found HERE, in PDF format, or below. The MBJ staff has not ascertained the accuracy of the data. Sources are listed at the end.

Music Industry Salaries

Rebecca Black, Music Business Journal

Without dispute, Rebecca Black and the song “Friday” have taken the world by a storm. The video was made in January and uploaded to YouTube on February 10th.  Up until mid-March, the video hardly drew attention, receiving only about 4,000 views. The success of the video took a drastic change when comedians Daniel Tosh and Michael J. Nelson posted it to their websites, and overnight, it received more than 200,000 hits. As of April 13th, “Friday” surpassed 100 million views– a feat that has been achieved by less than 50 videos on YouTube.

“Friday” was created by vanity record label Ark Music Factory (AMF). The LA-based company was founded by producer Patrice Wilson, in an effort to give aspiring singers a taste of life as a superstar: working with a songwriter, recording a song with a producer-engineer, and shooting a professional music video. AMF charges $2,000-4,000 for their services and keeps the publishing rights, while the singer retains the master recording rights.

While it may seem innocent to provide young dreamers with this opportunity, the glimpse of fame comes accompanied by all of the negative aspects associated with being a celebrity. Black, who is only 13-years-old, was certainly not prepared for the serious cyber bullying and emotional trauma that resulted from “Friday.” During an interview on Good Morning America, she revealed the most hurtful response: “I hope you cut yourself and I hope you get an eating disorder so you’ll look pretty, and I hope you go cut yourself and die.” Ultimately, Black is not a professional, and neither are the rest of AMF’s juvenile clients.  They are teenagers who are unprepared for the media attention that could result from their relationship with AMF. “I feel bad that Rebecca has been getting so many people criticizing the song because it was me that wrote it,” said Wilson.

“Friday” is only one of several productions by AMF. Each song utilizes a typical formulaic pop structure, with its main focus on achieving “catchy” quality. Each video strives to create a glam star aesthetic. Most of the other videos have received thousands to millions of views, but nowhere near the 102 million that “Friday” has amassed. If each song and video is based upon the same structure, then what set “Friday” apart?  Read the rest of OUR ESSAY ON REBECCA BLACK

by Evan Kramer

Muisc Business Journal pic, Emi, Citigroup, by Evan Kramer

Ever since private equity firm Terra Firma purchased the EMI Group in 2007, the label and publishing giant has been caught in a proverbial purgatory of sorts; too substantial and progressive to falter, yet too financially uncertain to move forward.  Having finalized the acquisition on the eve of that year’s economic credit crunch, Terra Firma quickly found itself pulling rabbit ears out of its pants pockets in the face of a $3billion loan from its lender, Citibank.  Terra Firma Chairman, Guy Hands, then filed a lawsuit with Citibank claiming that his loan officer, David Wormsley, had misrepresented the label and effectively duped him into purchasing the company.  November 4th 2010 saw the conclusion of a four weeklong battle in the New York Supreme Court that favored Citibank. Guy Hands’s Terra Firma was made responsible for the full amount of EMI Group’s debt. Now, to stay in control of EMI, Guy Hands had to find the necessary funds to pay the debt—an improbable occurrence.

EMI and Citigroup

Following the New York Supreme Court’s decision, therefore, the transfer of EMI ownership had an air of inevitability.  However, at the time of ruling, it was assumed by most that the transition would not take place until EMI’s March 31st, 2011 fiscal year-end, the time when Terra Firma was expected to default on its final loan payments.  In an effort to expedite the process, and seize immediately control of the record label and publisher, Citibank asked for a solvency test that it expected EMI to fail. It did. As a result, Guy Hands and Terra Firma were removed early from the company and lost any stake they had in it. Research by Private Equity News would put Guy Hand’s Terra Firma’s loss at $2.7 billlion—perhaps the largest ever in the history of private equity.

Continue reading about the Music Business (references list available)

The Music Business Journal is proud to present our newly designed official website!

Music Business Journal

Happy Reading, The MBJ team

The rebirth of venture capital, originally fueled by the equity related collapses of the early 2000s, is in the air. Publications like Fortune and the Wall Street Journal seem fixated on the notion that large-scale venture investments are poised for a major take-off. But interest in independent music-related startup companies is not altogether evident yet.

According to the National Venture Capital Association, major venture capital is directly responsible for over a fifth of Gross Domestic Product. Moreover, every year, more than two million companies apply for VC funding, representing about a-tenth of businesses nationwide. Less than a thousand of them actually receive funding, and less than fifteen are in the business of music. It is estimated that about one out of every hundred dollars invested in music comes from venture capitalists—which is probably higher than the proportion of music-related revenues in US GDP. This, as well as a dearth of traditional funding for music, suggests there is much potential for VC activity.

The majority of companies that receive venture funding are technology-based businesses that have introduced new products that revolutionize the technological world. Skype, for example, received funding from Draper Fisher Jurvetson, a VC powerhouse out of Menlo Park, CA. Skype was started in 2003 by the same entrepreneurs behind Kazaaa and with the support of DFJ, grew to its partial sale in 2009 for $2.75 billion. Skype serves as a perfect model of what VC businesses typically chose to invest in. Skype was an Internet based business that was trendy, had a lot of consumer appeal, and did something that had never done before. Skype was a successful VC investment that proved to be well worth the risk. In fact, most music startups are web-based businesses attempting, like Skype, to turn a traditional industry on its head. Aderra, Eventric, Bandzoogle, Mozes and many other recent innovators tend to integrate technology and open more markets for smart phones, tablets and other devices.

The presence of constantly changing charts, plummeting album sales and the decline of the major labels do little to help the stability of the music market. Often, non-traditional approaches to business discourage traditional investment practices. Despite the great opportunity for profit that comes with inherent risk, only small boutique-like firms and angel investors may be willing to enter the market. Major investment firms and VC companies are yet absent, but there are examples of smaller investors. Harmonix, a company out of Cambridge, MA notable for creating Guitar Hero received $100,000 in funding from small-scale investors interested in their development. Harmonix has created innovative music video games, often using trial and error methods to determine what the consumer wants. After previous unsuccessful attempts to break into the video game market, they were swiftly bought out by Viacom on behalf of MTV for $175 million in 2006, and created Guitar Hero. Recently, Viacom put Harmonix up for sale after weaker than expected sales of the Rock Band 3, but the company, apparently, was able to engineer its own independent repurchase. Overall, Harmonix’s success can be accredited to the company’s experimental development methods and the unwavering help of small-scale investors. The same could be said of Grooveshark, an ever-growing web-based popular music streaming service, originally made possible by small scale seed funding.

Perhaps the best example of a startup that defies old notions of doing business is Topspin, a private venture financed by ex Pro Tools founder Peter Gotcher and managed by Ian Rogers. Topspin gives artists the tool to record, and release recording product and other merchandise directly to fans. It empowers creators by making them less dependant on the traditional cash advance, for money can be made sooner through the website, whose platform is optimized to pinpoint targets rather than blanket fans. Brian Eno, among others, has become a user. Topsin’s model caters especially for young aspiring independent artists and, though still not fully proven, seems to point the way forward. Gotcher and Rogers, incidentally, are a marriage between an industry pro and angel investor (Gotcher) and a Young Turk (Rogers).

By Kiefer Wells

Read more articles about the music industry.

By Sahil Mehrotra

China’s music industry is immense and has enormous potential. It has over six hundred million users of mobile phone and counts nearly five hundred million web surfers. Its Internet market is the largest in the world. Yet digital distribution is largely unmonitored, and in general the market is so unregulated that illegal downloading of music is rampant.

In spite of its vast usage, China does not rank among the top five digital markets. By share of value, the US (39%), Japan (19%), UK (16%), France (12%), and Germany (9%) far exceed China, which is aggregated into a Rest Of World category that represents half of one-tenth of all digital music sales. The International Federation of the Phonographic Industry (IFPI) estimates that nearly 99% of all music downloaded in China is done so without proper clearance.

In an attempt to take advantage of a later correction in the sales of digital music, Google Music Search was launched in March 2008. Released exclusively in China, this new service is a platform that offers free, unlimited music downloads from most major labels. Google seems to be saying, “let’s join the pirates”—and so gain a foothold in a market that is likely going to be ebullient as time goes on. Ironically, since Google’s service is only available in China, music consumers around the world have been highly vocal about bringing the same service to their respective countries.

Music Business Journal, China's Road Forward

Google Music Search and Baidu

In fact, Google’s Music Search was launched to directly compete with the number one local search engine, Baidu. Baidu grants millions of users access to illegal downloads. Instead, Google Music Search also allows users to download unlimited free content, but it is completely legal. Google’s music catalog is limited, however, with only 1.1 million songs. Since Baidu has been in operation for longer, it can offer hundreds of millions of songs to download, which is much more enticing to music consumers. Furthermore, Baidu’s search engine gives users multiple download links of the same song, as well as different file format options (wav, mp3, aiff). Baidu’s advantages have made the site hugely successful in maintaining its large Chinese user base and trumping Google Music Search.

Continue Reading on the Music Business Journal’s Website…

by Luiz Augusto Buff

More than ten years have passed since the debut of Napster shook the record industry. The file-sharing software gave music listeners access to an immense diversity of music for free, causing a shift in industry power from record labels to consumers. The popularity of MP3 files increased even more with the success of the iPod. Even before Napster, recorded music sales were dropping year after year, due to discounts that labels were given to wholesale prices globally. Those numbers dropped even further when the demand shifted to the free content available on the Net. After the panic, artists and the music industry started to understand the opportunities that the Internet was offering, and started to migrate to new models of marketing and distribution through the online world. Still, adaptations are a necessity in the legal system to guarantee the functioning of the creative process. The fight against piracy continues but hopefully a new business model that takes advantage of the “feels like free” system will drive people to a legal form of consumption that not only will attend the demand for lower prices, but will help elevate the value of music back to a sustainable level.

Apple

In 2003, with the intention to provide legal content for their successful iPod, Apple developed the iTunes Store. The iPod had become the worldwide standard media player but the lack of legal content was the main issue that the company had to face. After forming agreements with all the major record labels, the digital retailer store was a booming success and is now responsible for more than 70% of the digital sales and the biggest retailer store in the overall music market, accounting for 25% of the market share, accordingly to IFPI (International Federation of the Phonographic Industry).

Before the online-based sales of music products, in order to get access to one specific song the listener had to buy an entire album. That meant that to buy one song, one had to pay for the ten (or more) other songs that came with it. One of the major changes that happened with the iTunes Store was the commercialization of single tracks- making it cheaper for listeners to buy their favorite songs. The number of units sold increased significantly but the sales performance of the recorded music products dropped radically.

CONTINUE READING on the State of the Music Industry