Music Business Income Goes Up – Music Business Costs Go Down
So, in Independence for Bands: 101 Pt. 1, I discussed reasons why record deals from big music aren’t the way to go, and some of the negative connotations associated with the old record business behemoths. However, I truly believe that things have never been better for the independent musician.
In amongst the rafts of the famous and the rich saying that the music industry (it’s not the music industry, it’s the old record business) is in freefall, there are an emerging bunch of figures, and artist testimonials which outline that the music business is in fact growing. There are many statistics stating that the illegal downloading of music adversely affects the amount of music sold, and probably an equal weight of opinion to the contrary; that it’s file-sharers who spend the most on music. While truly and effectively measuring the impact of downloading is very difficult, it’s becoming increasingly apparent that the music industry is returning more and more growth figures.
The PRS reported that from 2007 to 2008, revenues went up 4.7%.
This graph from The Times labs shows that both The Performing Rights Society and The British Phonographic Industry found that while traditional record labels may not be earning as much as they once were, the new music models seem to favour artists.
The BPI have also confirmed that even before the Christmas rush, 2009 has been a record year for single sales.
Also, what’s often overlooked by the gloom mongers is that in addition to the new distribution opportunities available to us online media, the internet reduces ( and can in fact almost entirely eliminate) the distribution costs needed to share music (as argued by the the fantastic Steve Lawson here in Balancing the Scales of “Free”.). These costs (sending CDs to press, TV, radio) were part of what saw artists on “old music” labels drawn into debt with their record labels. Simultaneously, advances in recording technology have led to a drop in the costs associated with making music. So while potential costs have dropped, potential opportunities have grown.
In my guest post on Creative Deconstruction I wrote about ways to make a success of independence. In the next post “Pt. 3″ (or Music 2.0) I’ll start to talk about some of the tools available to us on the internet to make our music available, and how we can share and interact with fans. It’s an exciting time to be independent.
“Want a record contract?” No, not really.
The good old rock ‘n’ roll myth of the perfect record deal is dead.
9 out of 10 (major label) albums cost more to produce than they make.
Of all acts signed in 2007, 70% didn’t have their album released.
The point at which an artist has many fans and is proving profitable is when labels show interest in signing an artist, and is exactly the point when an artist doesn’t need a record label.
Traditional record deals, as outlined below by Chris Healings, break down to around 15% to the artist, 85% label (there are even more aggressive and all encompassing 360 Deals). Assuming a dealer price of £5 per album, that means that for every record you sell, your band gets £0.75, the label takes £4.25. With your 75P per album, you have to pay the record label for every recoupable expense ever levied against you:
The money the label gave you to live off – The money spent recording your album (and if for example Sony were to put you in a Sony studio, this money just moves from one arm of Sony to another) – Advertising – PR – Plugging – The limo that picked you up for the awards ceremony that it was good to be seen at – The cost of the video – Artwork costs – The train/taxi/plane fare for the conference that your A&R man had to go to to promote your record – the money loaned to you to live off whilst on tour.
MUSIC INDUSTRY PANEL EVENT: HAVE YOU GOT WHAT IT TAKES TO MAKE IT IN THE MUSIC BUSINESS?
We’re very excited to be speaking at this Grow Creative event hosted by Lancaster University and facilitated by Mushroom Concepts for the forthcoming Global Enterprise Week (followed by a performance at this gig) at 6.30pm, Storey Creative Industries Centre. I’ll be speaking about my favourite subjects; championing the cause and the methods of independence, social media (youtube, twitter, wordpress and beyond), the wonders of UnConvention, crowd-sourcing, DIY and the importance of connecting with your fans.
Further Speakers include:
This post originally featured here on the fantastic Refe Tuma’s great website Creative Deconstruction.
The case for independence:
Hope and Social
One of the questions I like to ask when I meet people through music is: “How many artists do you know personally who have a record deal that they’re happy with?” The answer is almost exclusively “None“, very occasionally “one or two”. Most go onto agree that the happiest artists we know are those who directly connect with their musical world; with their fans, venues, promoters. I also like to ask emerging artists: “Outside of the creation of music, who has done the most to further your musical career?” Honestly, most people say a manager, a friendly promoter, a good friend who helps with web stuff, videos, photography. Though often ignored, the answer should most often include “Me!”. This is not to ignore the impact of the great people who help you; however You are your (or your band’s) greatest asset. The people who help you, absolutely, they’re vital and need more thanks than we can probably ever give back, but they want to help You. That’s what Independence is about.
For Hope and Social, we realised that pretty much all the good that had come to us had not originated from pluggers, press companies and PRs. In fact, with the notable exceptions of the sadly no-longer active Fistral, they hoovered our bank accounts dry and when there was no money left for them, the phone calls stopped, their enthusiasm it seems was only on a paid for basis and despite their failure to follow through on promises, the cord was cut. We realised that the good things had been things we’d generated ourselves and the things that were generated by our close friends and fans. So, in 2005, at the start of “DIY”, the members of “Hope and Social” quietly asked the 20 or so people who through the years had pledged “if I ever win the lottery, we’ll look after you guys”. Between us we proudly founded Alamo Music the UK’s first fan-funded, fan owned record label. Why “Alamo”?
“I shall have to fight the enemy on his own terms.” William Barret Travis, Texan commander – The Battle of the Alamo
What’s working for us?
Connecting directly with fans
Through our Website, Facebook, WordPress Blogs, and Twitter (@thehuxcapacitor, @socialsimon, @edhombre), through YouTube, Flickr. As an independent artist, the most cost effective means to connect with fans are the free ones. Through following, and meaningfully connecting with the likes of Steve Lawson, Andrew Dubber, Ben Denison and your own Refe Tuma, we’re discovering new means of connecting with fans, new ideas about how to release, tools to save us time, and have been introduced to new ways of making our work pay.
Videos
A young fan and a kazoo
For a 50th of their estimated worth we continue to make videos with the fantastic Mark Wordsworth; videos which garnered MTV and VH1/2 rotation. We paid for film and not a lot more, involved people who love us and our music and got people to work and perform for free. Nobody got paid, they just got fed and watered people and to be part of a something exciting, to make art with us. Looking For Answers features friends and fans (if there’s one thing fans like to see on your site, on TV, in the press even more than they want to see their favourite artist, it’s themselves) and they pass it on, they are the new PR, the buzz and the way to new people. Likewise for the Four Day Hombre videos, particularly the 1 shot “1,000 Bulbs” video and The First Word is the Hardest, shot for next to nothing, on 35MM film. Mark went on to make videos for Embrace, was nominated in Cannes for his James Morrison video and has recently moved to New Zealand to seek further film work. What’s more, our band supported Embrace on a national UK tour through this connection, playing shows to thousands of new fans.
Blogging
Both personally, and for the band. The reality of making your way in music is, for many people, more interesting than the rock star dream. My advice, write about it, be interesting, create content as often and as best you can. Eventually (I’m told) it becomes natural and effortless.
Pay What You Want
There’s plenty of talk of the Free Model and the Pay What you Want (PWYW) models, and quite a kick back against it too. I can’t recommend it enough. We’ve averaged £7 per unit here in the UK, £3 more than Radiohead and £6 more than with major label record deals. The key is, connect with people, then give them something to, and a reason to buy. We’ve had people swap a CD for £50, some people take 3 for £5, you can download from our bandcamp for nothing, all we ask (and even this isn’t compulsory) is that you value music.
Special Events
We try to make all shows special, we give out kazoos to the audience for one of our songs brass lines (1,500 kazoos at Glastonbury this year!), we do House Concerts (or as we call them in the north of England, “Living Room Gigs“), we relish audience participation, we ask people to shows in our studio, we wear blue jackets (we know we’re not cool, so at least we’re recognisable) and we’re nice to talk with afterwards, in fact, better than that, we’re great fun. It’s almost like fun is the thing we offer.
How do we survive? Making Music Pay.
The "Crypt Gig"
The band is one of the many things we do to earn. It is by no means the thing that pays our mortgage, however, it enables us to do things that pay us, which in turn enables us make the music we want to make. Ed’s photography has led to a career in photography, his production work with our band brings in more production work with other bands. Simon’s artistic output includes paintings/drawings, great experimental theatre, web design and all the artwork for Hope and Social. Our websites and band artwork act as a portfolio for his design work, and each fanbase feeds the others. Me, I record, mix and produce bands, talk about how to make your musical career work for you, deliver rock schools for young people (and residential “Real Band” experiences for the corporate market), guest blog, present at events, colleges, universities, mentor and coach bands. We are all founders and owners of our independent record label. Hope and Social acts as a hub for all the good, grand and great things we do which pay our rent or mortgage.
Roundup
It’s important to think of independence as a choice rather than a last resort. As a band, we kicked back against of a couple of years of searching for the deal of all record deals (full control of what we record, where and with whom, decent percentage split, a commitment to promote our work, control over what’s spent on the band [and therefore recoupable], control over publishing [we didn’t want to be featured on a McDonald’s ad, that’s for sure]). Long story short, this deal did not present itself, or perhaps doesn’t exist. While we had plenty of interest from labels and some very good people at labels, our efforts however would have been (and now are being) better spent not seeking outside help, but by seeking new fans and better and more exciting ways of connecting with fans.
By choosing this route, you’re not discounting that there may come a time when licensing your music, or working with labels, promoters, agents, PR’s makes sense; rather you’re strengthening your bargaining position should you choose to outsource. The busier you get as an artist, the longer it takes to manage all of your networks, to book your shows, to account. As of now, Hope and Social remain independent, and today are enjoying our careers more than at any time when we were chasing a record deal, licensing, radio or TV. The music industry is not only the “old record industry”, PR’s, the NME, BBC Radio 1. The music industry is the sum of all musical output of humankind that is for public consumption, it’s the bloggers, the people running conventions, the startup bands, the proactive tweeters. If you’re making music, writing about music, sharing your love of music, you are part of the music industry; you keep the wheels turning.
What will work for you?
The above may not work for you or your band, it’s about finding the personality in what you do, and exuding it from every tweet, blog, photo, conversation. Be interesting, evangelise, create great music, create great art, use beautiful images, create amazing artwork, give people choice about how to consume your music and how to connect with you, use the sites and networks that your potential fans are already using, work in and around music, sharing your knowledge, record and work with other bands, collaborate, share other’s interesting content. Work harder, and smarter than everyone else. Oh, and you should connect with me.
xR
