RIAA says sales are down. SoundScan says “No way.” Who should you believe?

In April of 2004 I was working on a piece for Keyboard magazine about bar codes. I was trying to determine if the “free” barcode many CD Replicators provide is a real added value to the indie artist, or just a bogus premium.

But what evolved was a much bigger and more important story. Talking to SoundScan revealed a massive mistruth disseminated by the RIAA about the reality of declining record sales.

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Through my investigation I learned things that would contradict reported statements by the RIAA. Mainly that US labels have had a significant reduction in sales from 2000-2004.

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What has long been a theory of the changing music industry is that “jam bands” – bands that adopt an improvisional style that make each show unique – should have a strategic advantage adapting to the new economics of music.

This is because by adding value to the live show experience, fans would be more likely to pay to see multiple live shows and would be more likely to purchase recordings of those shows (since they are all different). With regular studio albums becoming less of an income stream, such live show value has achieved hightened importance.

As many people know, the “original” rock jam band was the Grateful Dead. And although pre-Internet, their experience and new business thinking for the time continues to be studied, and remains highly relevant.

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Guitar Tree

I recently read a Wired interview with industry veteran Tom Silverman about the state of the music business and the plight of independent artists. He points out the difficultly of developing new music and touring while also holding down a real job.

The article is definitely worth a read.

It also remimded me of a past V11 article (see below) that requires revisiting, and highlights how, despite new ideas, new companies, etc., not much has really changed in the past few years…. basically we really are not there yet, and I don’t think anyone knows for sure what “there” is and when or if we will ever get “there”…

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I occasionally get random thoughts that I want to remember, and so I write them down and then think about them later. This thought came on New Years Eve, and I sent a text to myself to remember it.

Back in the day (way back in the day), if someone had a great thought and wanted to remember it, they had to chisel it into a stone tablet (think, ten commandments), or in later years learn how to read and write, then use expensive ink and hard to obtain paper like papyrus or something.

Basically, you only wrote something down if it was *really* important, and therefore you felt that the effort and cost to memorialize the thought was justified.

These days – you can text it to yourself while at a concert. Not even a writing utensil is needed.

For music, the barrier to development used to be access to and cost of a recording studio to produce

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November’s Blog Post of the Month comes from Hypebot’s Associate Editor Kyle Bylin. The Elsewhere Musician: Making Connections in a Fragmented World highlights two key points: (1) all musicians (and especially the “successful” ones) must continuously work harder on the business side of things, and (2) the trend of shorter album cycles.

From Bylin:

Leisure time once spent doing creative things — where an artist could take time away from it all — has turned into work that ranges from learning how to market themselves online and off, answering an endless barrage of messages from fans, bloggers, and managers, and trying to keep all of their profiles, blogs, and social media tools relevant and up-to-date.

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MTV recently accounced that they will enable any artist-unsigned emerging act, indie cult fave or major-label superstar-to submit songs for possible inclusion in the Rock Band game.

The plan isn’t as simple as uploading a song to iTunes or anything like that. Rather, artists and labels will submit songs to a community of trained freelance game developers and other interested programmers who will prepare the tracks for Rock Band. Additionally, labels can either hire trained developers or school their existing employees to do the work in-house.

Songs submitted through this process must then be reviewed by other developers to check for playability, inappropriate lyrics, copyright infringement and so on. Then approved tracks will be posted to an in-game download store separate from its existing “Rock Band” store where creators can set their own price (50 cents to $3 per song) and receive 30% of any resulting sales. Gamers will also be able to demo 30-second samples of each track.

If this process works and allows for any musician to have a fair chance of getting their music uploaded for games, it could obviously be a great way to attract new fans, as well as allow fans to add some individuality to their game playing experience.

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Hypebot dropped some numbers on the rising significance of independent labels. Some of their reported numbers: -Independent labels accounted for 32% of aggregate album sales in 2008, up almost 1.5% from 2007. One-third of album sales are indies – sweet! -Independent labels, as a group, are the largest owners of master recordings in the industry [...]

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I was reading Spin Magazine’s April article on U2 (What Makes U2 Run?) and came across this quote from U2′S bassist Adam Clayton:

“Think about the big bands, the big orchestras that used to tour,” he says. “Then the stock market crash came and they slimmed down to quartets, because that was cheaper.”

His comment was in response to a discussion about music’s relationship to outside economic forces as a constantly mutating cycle.

So if at some point big bands had to reduce their numbers from 20+ to 4 to become financially sustainable, then are we now seeing a time when 4-6 member bands will need to be reduced to solo musicians to make touring financially viable?

After all, pay split between one is certainly much better than when split between five. So, is one > five?

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The update of V11′s website has inspired us to review some articles written over the past year and evaluate their relevance today. This post was originally published in March 2008, just after SXSW’s music conference.

Recording costs have never been lower for musicians. Still, a few thousand dollars will be difficult to handle for just about anyone, especially in these times. Some musicians have tried Fundable.com, where they ask fans to make donations for recording and touring efforts in exchange for free merchandise and perhaps a guaranteed local show or private show.

Just a thought, but has the potential to make money from recorded music diminished so much so that nothing like what was presented in this article could even be considered at this point?

Original Post:

There was a lot of talk at 2008′s South by Southwest Music Conference in Austin about how music label agreements were now being called “Branding Agreements” – the basic idea being that the physical distribution aspect of what a music label did in the past is no longer as necessary because of digital distribution, so their role is now being repackaged as a branding and marketing machine.

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There are reports of a Ticketmaster-Live Nation merger.  Billboard news does a nice job of summarizing the potential effects: The two strategies of Live Nation and Ticketmaster Entertainment have been quite similar: vertical integration, direct connection between fans and artist, bundling of content and tickets, and harnessing of the secondary market and the revenues produced [...]

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