Marketing, Music

DIY Is Dead: Seven Suggestions For Indie Musicians In 2016

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“How do musicians move from the investment stage to the revenue generation stage of their music careers in 2016?” is the question I hear most often lately. In other words, “When can I stop spending so much money on my music career and start making money from my music career?”

Identifying the sources of real music income with high margins is becoming an even more urgent issue this year as technology has enabled the production of more and more music and digital distribution has driven the consumer price for recorded music to zero. Everyone knows you don’t make a living on streaming, downloads are down, and pressing CDs is a cost of promotion. Vinyl is unlikely to fill the revenue gap for most.

The good news is that more free information on how to be a “musicpreneur” is available online than ever before, and paperback books on the subject of DIY musicianship abound.

“Easier said than done” has gained a new and profound meaning, however.

Maybe you are reaching year 10 of your 10 year music career. Maybe your subsidizing parents, grandparents, spouses, small labels, 401K accounts, and core fan bases are getting a little fatigued, too.

I think 2016 is the year many musicians are asking themselves:

  • What is the single silver bullet [platform, technology, program, technique, skill set, niche, tribe, cause, creative project] that will separate me from the crowd and elevate the visibility of my music in 2016?
  • How do I continue to cobble together a living financially?
  • How on earth can I get it all done myself in a 24 hour day: be a social media maven, blog every day, design perfectly branded website and merchandise, update my ReverbNation page, and still have time to write, perform, record and produce music – and also eat and sleep? Unless you can hire the likes of the Santa Cruz web design team, there will be no sleep for you.

To help answer these questions, here are seven things I believe indie musicians should focus on in 2016 for success. [Credit goes to Kara Kharmah of Engage Your Fanbase for this click-bait post title. I spoke with Kara on Blab recently about music marketing, generating revenue for musicians, and some of the content of this post. You can watch the replay here]:

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News

Penniless and Anonymous: Don’t Worry, Be Happy

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During a recent Twitter exchange regarding the Taylor Swift/Spotify/streaming debate, I was labeled as  having “become a professional problem identifier.” I was exhorted to instead “Be a problem solver.”

Many more knowledgeable and successful than I have certainly already waded into the fray. Even Dave Grohl! Why bother to add my perspective?  Because every time I hear the argument that musicians should just “get over it,” or “stop complaining about streaming” I realize that many of us are not on the same page. We don’t even agree what the problem really is. I subscribe to the philosophy that solutions are built on consensus and common understanding, not on forcing a solution that doesn’t fit, or a model that only benefits one or two key players in the industry at the expense of the others.

It seems to me that there are a lot of things that get all confused up in this debate, and the refrain I keep hearing that musicians should just shut up and “focus on making great music” ignores the reality of how screwed up the music industry is and how hard it is – even if you’re a great musician with great material – to make a living at music.

I’m not a famous musician, or a tech entrepreneur, or someone with years of experience managing bands or running a record label. I’m just a musician, an anonymous musician who, like most of the musicians I know, doesn’t make a fulltime living as a recording artist. Oh, and fifteen years ago I was the VP of marketing at a startup whose product was distributed software as a service, bringing Microsoft Office to corporate desktops as, essentially, a streaming product.  I do care more about the long term future of musicians and the music industry than going public with my music tech company and cashing out (something I also know a bit about). And I am an engineer by training. I  have a sensitive radar for arguments that don’t square with my version of reality.

[Tweet “Public discussion and debate are as valuable as building a software platform to “solve” a problem. “]

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Marketing, Music

Walking The Dog Episode 14: ISRC Codes and SoundExchange

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ISRC

This 11 minute episode focuses on the ISRC (International Standard Recording Code): what it is, what does it look like, how do you get one, and why it is important.

Also often called the ISRC code (even thought that is a bit redundant),  it is “an international standard code for uniquely identifying sound recordings and music video recordings” (Wikipedia). The ISRC was developed by the recording industry in conjunction with ISO (International Standards Organization) in 1986, and updated in 2001.

But before we talk about ISRC codes, let me first say I am disappointed that SoundCloud removed the direct record/upload feature from its iPhone app this past week. This means it requires more steps for me to produce this podcast (ie. use Garageband or ProTools). It will also make it harder for me to produce Walking The Dog remotely, as I managed to do for the past two weeks while I was out of town, using just my iPhone and iPad.  You can read about SoundCloud’s mobile app update on Hypebot.

On to ISRC codes. Deep breath, people.

Each of your songs, if you are a recording artist, should have a unique ISRC code associated with it. That code is embedded in the digital sound file, and included on the CD (not vinyl or cassette tapes). The ISRC code is also registered or kept in various databases by the artist or publisher. The ISRC code is important because it is used to track the physical CD sales, terrestrial radio plays, or digital streaming plays of the song online – for example via Pandora. It’s also used for tracking music charts, as well as combating music piracy.

[Tweet “It’s important the track has an ISRC code so royalties can be paid out to you”]

The non-profit SoundExchange organization has been tasked by the US congress to figure out what royalties you are owed US songwriter from your non-interactive digital internet radio plays  – ie. Pandora, IHeartRadio, or other streaming radio stations. They collect those and then send you a check.

To clarify what I said on the podcast, SoundExchange does NOT handle royalties from Spotify, terrestrial radio, live performances, YouTube, covers of your songs, licensing for TV or films. Just streaming radio performances.

As both interactive (Spotify-type) and non-interactive (Pandora-type) streaming music services become an increasingly important way that people consume music, the ISRC code will only become more important for musicians in terms of tracking royalties and charts.

Fierce battles are being waged within the music industry over copyright and royalty rates, particularly as things heats up with YouTube/Google’s much-anticipated streaming music service and the indie labels. The ISRC is an important reporting mechanism and transparency tool. If you are really interested, read SoundExchange’s legal counsel’s filing with the US Copyright agency, which actually has a lot of good information about ISRC codes  and a very coherent argument about why they are an important standard.

I welcome your comments, corrections, and feedback.

Some more helpful guides to ISRC codes:

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Marketing, Music

iTunes Past and Future: Hypebot’s Spitz and Bylin [Podcast]

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Alas, a decade is practically an eternity online, and as such, the download-to-own concept that iTunes revolutionized is already showing signs of age. The growth of subscription-based streaming services like Spotify and Pandora, and the current cultural dominance of YouTube, with its more than three billion videos viewed daily, hint that  that music consumers are now largely content to listen, rather than own. – Time Entertainment, April 28, 2013

In this two-part podcast, Jason Spitz and Kyle Bylin of Hypebot’s Upward Spiral Podcast and I discuss some of the customer needs and behaviors that drove iTunes adoption: the unbundling of the single from the CD purchase, as well as the product characteristics (seamless integration with the iPhone, ease of use, standardized pricing). It’s interesting to hear the generational differences in how we adopted (or didn’t!) iTunes to build our personal music libraries, and to note that iTunes clearly was a substitute product for pirated music, even if an imperfect one.

In the second half of our discussion, we cover the transition of customers from download to streaming and debate where the future may lie for Apple’s iTunes and the consumption of music. We discuss iTunes competitors, and what factors might determine whether Apple will continue to dominate music distribution, such as the ubiquity and seamlessness of wifi, and the deep pockets of a platform player like Google, Amazon or Apple, as compared to a software-only offering such as Spotify or Pandora.

Kyle Bylin is the founder and editor of sidewinder.fm, a music and tech think tank, and also conducts research and develop music product concepts for Live Nation Labs. Jason Spitz is an ecommerce expert helping bands, comedians, and other artists build direct-to-fan businesses. In addition to being super-knowledgeable about the music industry, Jason and Kyle are expert conversationalists, and they always pick topics that are timely and interesting.

I sure had fun talking to these guys. Please let me know what you think of our discussion in the comments below!

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Marketing

8 Things Indie Musicians Can Learn From Taylor Swift’s Red Release

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**If you like this post, you may also enjoy my follow-up post 5 Things Indie Musicians Can Learn From Taylor Swift’s 1989 Release**

Album sales may be plummeting in the music industry overall, but Taylor Swift’s latest album hit the number one position on iTunes’ Top Album charts within 36 minutes of its release last month and remained there for the past three weeks. First week sales were 1.21 million copies, according to Nielsen Soundscan – the biggest first-week figure for a new album in more than a decade. None of this was an accident – it was the result of a carefully orchestrated and deeply creative yet disciplined launch. What lessons can indie musicians take away from the way the upstart Big Machine Label Group marketed Taylor Swift’s “Red”? Sure, Swift’s label probably spent millions of dollars of marketing budget and had relationships with huge retail chains, but there are some lessons for smaller music marketing budgets.

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Music

Streaming Music: A 5 Horse Race?

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***UPDATE: Google To Launch Music-Streaming Service (Market Watch, May 14, 2013). This could be a game-changer, as Google is a major infrastructure challenger to Apple. Also missing from my analysis below is Amazon, who could also become a major player, and does have a cloud-based music storage system today.

On the eve of the Future of Music Coalition’s Summit, where music licensing is prominent on the agenda, it appears that the horses in the streaming music race are finally lining up. Now, I could be totally off base on this, I’m just an indie musician with a software background and not a lot of insight into the behind-the-scenes happenings, but I think it’s shaping up to be an interesting race. I believe there are some silent bettors, the major music labels and Google, and it’s not really clear (yet) whom exactly is betting on whom. These players are listed in no particular order:

First, we have the apparent favorite, Spotify (16 million active users, 4 million paying,  subscriber-revenue-driven). They’re about to close another $100 million round of investments led by Goldman Sachs, who knows a good investment when they see one, right? Why is Spotify such a good investment when they are bleeding green? Because it reportedly has licensing agreements with the major labels that guarantee it will make a 25% margin, while handing over 75% of its revenue to the labels. Some view this as a millstone around Spotify’s neck, but if Spotify can hold on long enough to dominate the market and achieve some kind of workable cost model, they become a utility: an entity with a guaranteed margin and guaranteed income.

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Music

The Un-Virtuous Music Industry Business Cycle

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***UPDATE: Google To Launch Music-Streaming Service (Market Watch, May 14, 2013). This could be a game-changer, as Google is a major infrastructure challenger to Apple. Also missing from my analysis below is Amazon, who could also become a major player, and does have a cloud-based music storage system today.

***UPDATE: Apple announced a streaming music service on September 7, 2012, causing Pandora’s stock to fall precipitously. The impact of this service, which was also reported by the Wall Street Journal, is likely to be profound, although  EricA Ogg of GigaOM speculates on whether Apple will succeed in this space given the relative lack of visibility of iMatch.***

It’s fall, the season when fruit ripens and leaves let loose and tumble to the ground. As I was walking my dog this morning, I was reminded of the stark difference between fruit and leaves. One is sweet and ripe, heavy with the burden and promise of life. The other, cast off like snakeskin, is the detritus of the season, dry and lifeless.

It’s the fall season in the music software industry as well. Every software business has predictable cycles for startups, and the music industry software startup cycle is no exception. The clock is ticking, and some music software businesses seem on the road to becoming lifeless, a step from being cast off from their investors like so many drying leaves. It’s not clear if any will bear the fruit –  the financial returns – their investors were hoping for. It’s hard not to take as a warning the fact that projected 2012 Facebook revenues were downsized by $1B . Even this relatively successful consumer software platform continues to struggle to generate return on investment. Also in news this week, TuneCore founders Peter Wells and Jeff Price were ousted by the Board (read: major investors in the company take the reins, looking to change company direction to increase profitability). Slightly older news is that Spotify and Pandora are not yet close to profitable as of mid year 2012, and in fact, Spotify profitability appears to be moving in the wrong direction. Rhapsody was revived by absorbing Napster in a buy-in from Best Buy, and they are still owned almost 50% by RealNetworks, so theoretically they have deeper investor pockets. They are supposedly close to profitability, but their revenue and cost structures are less well understood. I’ll believe it when I see the numbers.

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