MUSIC|MEDIA|DESIGN

Just because there are no modern media labels, doesn’t mean we don’t know what one looks like. In this column, we’ll look at the big picture. Today a successful label requires expertise in selling music, and some objective means of connecting artists to fans. To this end, the label must be expert in every aspect of retail sales, including unconventional channels. Just as important, labels must have some expertise in recognizing demand across many markets, including niches. Demand is distinct from talent, just as retail awareness is different from distribution. Lets explore how a major media label might leverage their expertise in a world without hits.

Forget “recording contracts” and “A&R” (artists and repertoire) reps. Today artists no longer need a contract to pay for recording, and fans no longer need middle men to predigest scads of music. Long-tail models are driven by quantities and time or presence. The labels job is to simply exist until the fan discovers songs in their catalog, at which point their role is to deliver the music as seamlessly as possible. In all sales, efforts are aimed at “closing” the deal as rapidly as possible. Any delay in closing and/or delivery can cost sales, or give the buyer time to reconsider or even forget about the purchase entirely. This problem is especially severe in music: As an impulse entertainment purchase, we don’t really need it at all! How many songs or albums do we decide we “have to have”, but forget about once we hear the next song, or pick up another shiny disc? Closing sales has never been easier than the iTunes Music Store, and the variety of products, as well as margins, make it attractive. Specialty retailers provide a similar environment, promoting impulse buys with signage, pricing, and placement. Finding and filling these niches are the job of the modern label.

When we visit places like the iTunes Music Store or CD Baby, not to mention successful bricks-and-mortar retailers like Shake It records, one is immediately struck by the range of music-related products being sold. Shirts, knick-knacks, magazines, greeting cards, and all manner of swag surround the hottest selling CDs. No surprise there: merchandise has been a big part of the bottom line for decades. Traditionally these products have been sold directly by artists, outside the record label’s chain. Artists and their management kept all profits, but sales were limited to venue and web site sales, with some ad hoc retail distribution on the side. While it’s unlikely artists would give up a large chunk of those profits, a savvy label would see opportunity in it’s retail sales chains. Expanding the catalog to include that merchandise, albeit with considerably lower mark-up, could be a valuable service that attracts new artists to the catalog, while simplifying purchasing for retailers.

Low margins are not a problem in many industries. The consumer credit card business is built on making a few pennies on every sale, surrendering the real money (and risk!) to individual banks. In a global economy, these pennies can add up to be quite significant. So the real key, aside from keeping sales volumes high, having a broad enough catalog to attract fans. Quantity matters at least as much as quality. Further, since music is a fashion-like business, where quality’s a temporal concern, it’s almost impossible to prospectively pick hits. We can’t really know what’s going to be hot next year, next month, or even next week. By adopting a long-tail perspective, our imaginary Media Label doesn’t have to. Simply avoiding the real stinkers, and attracting the most forward-thinking artists with an attractive model is sufficient over time.

Time is a critical variable. The value of media is not unlike stock prices: it goes up and down as a function of popularity and success over time. Todays shit-hot record is tomorrows shite. And vice versa. By constantly signing more artists, and carefully limiting inventories, the catalog can grow faster than costs. On-demand or at least fast-turn manufacturing is the norm today, so labels have no need to physically stock every title. In time, there will be no reason to stock ANY title! All our label needs is the long-term license to profit whenever it’s titles sell in any format.

The final element of a modern media label is the most complex. Marketing the catalog and artists is what contemporary record labels think they’re really good at doing. In the next installment, we’ll look at that assumption alongside new demands and methods.

Dave Davis

Every new media is resisted by the established old media. When old business models begin to fail, the law or precedent is used to manipulate and control new ones. While underlying concepts of intellectual property, and the basic constitutional framework our laws are based upon are as relevant as ever, money and the unenlightened self-interests of oligarchies distort (recontextualize) the law. The result: A broken system, founded on archaic models, that truly benefits no one.

Lets start from the beginning. Record labels sprang from the sheet music and publishing world. Live concerts and pop music are equally rooted in the traveling carnival game. Billboard magazine was originally a carny-trade rag, that evolved from the larger touring industry to refocus on music! The music business was built on intellectual property, first in the printed form, and later as recordings. Publishers, later augmented (but not replaced by) recording companies dominated the trade. When it was a print-based industry, the business model looked like what we might call the long tail: Publishers controlled broad catalogs, selling low volumes to many markets. But with industrialization, and the appearance of a manufactured music product that required no specialized skill to enjoy, that model evolved to a hit-driven game, best fueled by stars. Technologically driven companies like RCA were highly vertically integrated: they made everything from the tubes that went into radios and transmitters, but the stations and programming thereon. Re-selling their assets as recorded music leveraged that investment tremendously. Over time both recording and delivery media have become more capable, and less limited. Virtually any idea or content fits on a DVD, if not a CD. Tools of creation, and appliances for consumption are ubiquitous. The gap between artist and audience has been under assault for a century. From a technical standpoint, there is very little reason for any gap at all. What remains is a product of business model, fear, and habit.

All of this is not to say that there is no longer a need for a record label. Quite the opposite: Every artist needs a label more than ever, to provide support of the most conventional kind! Artists no longer need a label to fund recordings, or shape their repertoire, but they need more help than ever breaking through the noise, organizing marketing and distribution. Theres real money to be made with models that focus on aquiring long-tail catalogs and delivering highly customized products in every format, manufactured on demand, and delivered directly to any consumer through his or her preferred channel. In such models, value is added at each boundary. Transcoding, delivery, marketing, and most of all point-of-purchase distribution are all opportunity points. Such catalogs are defined more by size/volume than control. Flexibility, not exclusivity, is the higher value. The problem is, that label doesn’t exist!

No problem.

We will spend the next few weeks thinking about what labels do, and how they might do it better. We’ll propose models that make sense in a world where bits are worth more than atoms, and we no longer need the Big Main Control Man to tell us what we like or want. But remember: this is a conversation, not a monologue. Your comments and ideas matter as much as mine. So please… join in!

Dave Davis

Our long-time friends and clients, Shake It Records have a critic’s mini-darling in Wussy’s Funeral Dress.  Color us impressed!  Check this out:

BlogCritics Magazine jumps in early, with their November 2006 review. In January, Harp Magazine picks up on the buzz.  Then Robert Christgau picks up where he left off in his love for all-things-Chuck, via Blender, in April 2006.

Nice work, Wussy & Shake It!

Many bands release CDs, win contests and awards, occupy stages, and generally impress friends, fans and wow the local music scene. At the end of the day, too many have too little to show for all this recognition. Indeed, some wind up reviled for their success: bands getting noticed often find themselves at the center of conspiracy theories spun by other bands about music journalists and collusion between Bob’s House of CDs, the Mafia, Big Radio and the Illuminati-run Major Labels!

Wake up! Any modicum of success you achieve locally will naturally be followed with recognition in the local press, and yes, familiarity and personal relationships with members of the music press. This is not a bad thing, or a nefarious inside plot to cut every other band out of every opportunity that comes along. Its just human nature. More important, its something that can work for your band as easily as anyone else lucky and talented enough to be noticed and recognized.

If your goal is to be a local music icon, that goal is eminently achievable through those human relationships, and over time its almost inevitable… if youhave talent keep plugging away. If you want more than that, the road is a bit longer, a lot harder, and the obstacles much higher. Unlike local music sainthood, this one is never assured, and always a tenuous roller coaster ride. This article may or may not help you reach those higher goals, but it might give you a leg up on the former, and help you manage whatever success does come your way. It’s primarily targeted at bands who are releasing CDs.

Let me start with a model of acknowledged, proven, undeniable success. Motown Records started off as a local Detroit label, created by a jazz fanatic who owned a record store. He saw a lot of great jazz artists floundering hopelessly in the marketplace, the jazz scene thriving even as musicians starved. The genius of Barry Gordy was not that he was able to locate, attract and develop pop acts to the exclusion of the jazz artists he loved. Rather it was his insight into the fundamental nature of the business itself, and his approach to marketing and merchandising records in a way major labels could barely fathom, much less emulate. Interestingly, his techniques could be more successful in today’s wired world than they were in the 1960′s, but I’m getting ahead of myself.

The Motown formula was simple: A band was developed fully before any products were released. Once the band was ready, a record was cut. It wasn’t released nationwide because Gordy realized that having your disc on the shelf of a store in Peoria for a year before you ever played there or heard it on the radio virtually guaranteed it would be returned to the distributor before the band came through town. Instead, Motown staggered releases to coincide with tour stops which coincided with national media exposure (American Bandstand et al). When a band was in a town they’d do interviews in local media, and the records would magically appear in stores. Eventually as a band worked its way across the country, they’d hit gold sales levels, and have virtually NO returned product. By contrast, a major label band might sell gold, but get half of that returned unsold, or played and returned as bad product. The major label band would be charged for returns, and the label would claim to lose money. Gordy’s bands paid Motown more money for all kinds of services, and made less money per unit than Capitol or Columbia acts. But, at the end of the day what the artists forget to mention (or are simply unaware of) is that they netted more than major label bands because the money was well spent, and there were no returns.

Gordy was a stickler for two things: Quality and efficiency. He dumped poor product before consumers ever saw it, much less returned it (an efficiency in itself), and never wasted a moment of energy or a dollar of capital if it could be avoided… when it was unavoidable, people were accountable, and the entire organization learned from the mistakes.

Bands, left to their own devices are classic models of inefficiency. Worse, bands don’t just miss their own mistakes, but they seem determined to repeat the mistakes of others. The key to resolving both of these problems lie in record keeping, planning and analysis. A business journal can be as simple as a checkbook, but if you can put your bands records into something like Quicken, thats even better: it not only lets you categorize your expenses, but it also gives you a window on your successes and failures. Virtually every expense of a working band is tax deductable, and the government gives you a few years to make a profit so you can write a lot off in the meantime (of course you’ll never show a profit, but they don’t have to know you know).

This helps in a less obvious way. Many bands look in the back of Mix magazine, find a place that will press 1000 CDs for $1000, send off their parts, and brag to their friends about how cheap the CDs were. Spending money piecemeal makes it easy to forget all the little costs that add up over the course of a project. Even bands who get the “Full Ride” at Discmakers or Oasis don’t really know how much their release costs. Bands happily piss away a couple hundred promos to relatives and friends with imaginary “connections”, A&R people who toss them in the trash, and all kinds of other things. They turn around and sell CDs off the stage, full of punk ethos and DIY Cred for $5, smugly believing they’re making $3.20 a pop. Unfortunately, that’s not the case, or even close. In fact, they’re probably LOSING $2-4 per disc. A program like Quicken and a group checking account could make this clear. For the doubters, spitting coffee on your screens as you read this, I direct you to the next post where I break this down. For everyone else, I’ll continue with my thoughts.

Analysis is handy because it gives you a better view of things. You can identify problems before they become crises. In the above example there’s a simple solution: charge more for your CDs. To actually GET more money from fans for your product is another story. And, even if you do manage to sell them for more, on margins this slim you have to make sure you sell a good percentage of the numbers you plan on. This adds up to the simple reality that Barry Gordy understood intuitively: Efficiency and quality must be givens, not “nice to haves”.

Like everything there are always cases of diminishing returns. I’m not suggesting you need to spend as much time as Michael Jackson in the studio, nor do you need a 20 page full color booklet. You do however need to have good sounding music that impresses reviewers, fans and djs who might actually play your music. A sharp looking, nicely printed package when viewed OUTSIDE the shrinkwrap helps a lot. Spelling errors on the tray card are a bright red idiot light (one local release was pressed with known spelling errors because they couldn’t afford to have thier $200 film reburned, and the cheapo plant charged for revisions. Doh!). Upside down spine labels scream “Amateur Product Here”. Cloudy discs, or worse unplayable product isn’t unheard of, and reflect badly on the band and cost future sales.

Efficiency means you can’t afford to do things more than once. You do a job, focus on it, and do it right. Figuring out a cool, slick lead in the studio, or for that matter, at home alone isn’t a great idea for a low budget project. Work it out IN PRACTICE, where the rest of the band can hear it, give you input or if need be, nix it.

Mixing is a process where you can spend 4 hours getting the drums right on one song. The second song might only take 2 hours total since that’s together. If you have to remix just one song, you’re often starting from scratch, so you should pay attention during the mix, not talk, not call your girl/boy friend. If you are glazing, leave the control room and hang out in the studio or lounge and come back when things are closer. Try to mix similar songs on a single session. If you mix over 3-4 days, you can create 3 different drum sounds and mix them up in the CD sequence. Change vocal effects, guitar sounds, whatever else you want to add texture. The drum sounds take longest to set up, so you can make the process more efficient by using a few of those and a lot of other elements. Pick the low hanging fruit!

You are the worst judge of your music. The song you think is the sure fire single is probably the turd. Likewise the song fans love is the one you hate playing the most. When selecting songs to demo or use as MP3s or singles, ask someone NOT in the band. The least connected the better: you’re looking for the songs that resonate with strangers, not with your girl/boy friend.

Releasing a CD is not something you do for an evening. This isn’t a 13 year old masturbation fantasy where you furiously jerk yourself then fall asleep. In fact, most bands sell a single title for a year or two. Another key fact: Bands tend to sell most of their product close to release date. Hopefully the lights coming on and the Motown Connection is firing in your brain: the closer you can get to making EVERY gig a CD release party, the better. Obviously this isn’t possible, especially in a local setting. But it IS possible on a regional basis. It’s all about managing the release sequence, not to mention your own time and energy. Again, efficiency is key. I’ll get deeper into that broader concept in part 3.

CDs sold at shows tend to be directly transduced into beer. This urge must be fought. Yes, you will surely spend the $30-40 of sales at a typical gig in collective drink. But the fact is if you sold NO CDs you would still drink $30-40 worth of alcohol. Why discourage yourself in a long term process? You are already planning your next release, cataloging all the things you’ll do differently. Make it easier to reach those goals, and make sure the money at least makes a stop in the bands previously mentioned Quicken ledger and bank account. Bands can easily make $2000 profit on a release, which in theory means you can spend the same amount on the next one, PLUS a little more, and buy some other gear along the way, or promote the next one better. Unfortunately if you piss away the profits a few dollars at a time you reach the last box and discover you’re still as broke as you were when you paid for the order.

These are the big, obvious things. If you TRULY address these issues you’re ahead of most bands. Many bands think they know all this and are as pure as driven snow with respect to these sins, but don’t bother to plan or keep the necessary records to provide real insight and opportunity. The next section is simply a “proof of concept” to demonstrate how things really add up, and why you should count. If you accept that premise, skip the math and go directly to section 3. Section 3, Conservation of Energy for Maximum Results, contains specific tactics for addressing these problems.

Spin Magazine reviews one of my favorite projects in my masterin discography, The Twilight Singers, ‘Blackberry Belle’ (Birdman).  I’ve mastered a lot of records.  This is not only one I’m proud of, but something a lot of fans have heard.

Click here to buy the record straight from The Twilight Singer’s website.