The Business of Music II - A Look at the Artist-as-Entrepreneur

Over two years ago, the music business began a series of major layoffs at virtually every label to stop the hemorrhaging of money as music chains like Tower Records and various “brick and mortar” storefronts disappeared from the marketplace. As Wal-Mart, Target and Best Buy scaled back purchasing new releases and back catalog, Amazon and similar online stores became the easiest fulfillment houses, with iTunes emerging as the champion of downloads.

With the growth of alternative purchasing possibilities and the proliferation of direct-to-consumer websites, the music business’ bottom line apparently has stabilized with a label or two still struggling to eliminate their almost insurmountable debts. In essence, what is emerging is a new music business, leaner and, sadly, meaner but more profitable as less risky decisions and commitments are being made. They have been forced into creating alternative revenue streams, resulting in the ominous 360 deal that surrenders everything creative and marketable to the record label which absolutely is unacceptable for many artists.

However, it seems that new opportunities and a new attitude is rising from the chaos. The music business’ misfortunes have forced artists of all kinds to take control of their own careers and realistically evaluate what it is they truly want out of their calling. If it’s a goal such as superstardom and the stereotypical rock or pop fantasy, then their American Idolic dreams might be best realized with a major label whose promotional machine could achieve this. Maybe. But if one’s goal is for financial and creative success–plus stability and profitability in his or her creative field–other smart models and mindsets are becoming available.

In the first of what hopefully will be an informative, continuing series on how the creative community can not only survive but thrive as it helps to rewrite the rules on marketing music, Panos Panay’s company Sonicbids–a multi-service website for independent bands and artists–will be at the center of this interview with its owner and a few extremely satisfied clients.

Q: How is starting and running a band like running a business?

Panos Panay: With both a business and a band, you start with a vision and a blank canvas. To make the vision a reality and to fill that canvas with a picture that everyone sees, you need a team of people to believe in your vision, and then you need to go out there and get fans/customers to buy into your creation. You start with no resources and no money and everyone thinks you’re crazy for doing it. And usually your girlfriend breaks up with you because she’s tired of playing second fiddle to your obsession.

Q: You’ve referred to “the artistic middle class” online, what is that?

PP: It’s a class of artists that’s completely redefining the way the music business works and the way that music is experienced and discovered. They consider themselves entrepreneurs, not just artists who create art for art’s sake. They don’t wait around for someone to come and do things for them; they make things happen for themselves. They play by their own rules, not the rules of the mass market, and they use social media and the internet as the primary means of connecting with their audience. They use tools like Facebook,Twitter and Sonicbids to create their own army of superfans and interact with their fans in the collaborative way of the internet, not in the monologue of the broadcast era. They understand that the new music business is about a mass of niches, not a mass market. 



Q: What individual tools are in the DIY artist’s toolkit, and how are they using them?

PP: If you look at the four things that a major label used to do for artists–besides funding them (more on this later)–they primarily helped artists record music; distribute it; market it; and then leverage it through a network of professional connections like a publisher and a booking agent. The internet has made it possible for artists to gain access to these services for a fraction of the cost: they use tools like Apple’s Garageband to record music on their laptops; sites like CDBaby and Tunecore to distribute their music to stores like iTunes and Rhapsody; Facebook, Twiiter and MySpace to market themselves to large audiences; and sites like Sonicbids to get bookings and license their music. 



Q: Lately, the discussion has turned a bit negative when it comes to recorded music, as in is there any value to it anymore?

PP: Is there value? Yes, recorded music is invaluable from an emotional standpoint. Will people be willing to pay money for it? No. Look at the internet browser. In 1995 it used to cost $50 by mail. Then Microsoft offered it free as a bundle of something else. Can you point to one person who is willing to pay $50 to download a browser? 



Q: So, where are independent bands making most of their money these days?

PP: Live music, merchandising, licensing music, performance royalties and sponsorship. We just helped match several thousand artists with over $4 million in unclaimed performance royalties through a relationship with SoundExchange. How cool is that?

Q: With record labels cutting promotional money and staffs to the bone and not as willing to take risks, who are the new patrons of the arts?

PP: We have seen many, many consumer brands, like Diesel and Gap and JanSport step in and create programs for independent artists that promote and sponsor them. Last year, about $2 billion was spent by these consumer brands to sponsor all kinds of music-related initiatives. We’ve seen a shift of those dollars to the artistic middle class instead of the top-tier artists. Why? Because the relationships that these artists have with their fans are intimate and meaningful and organic. They essentially are buying permission to reach these consumers through the artists, but at a fraction of the cost. Again, it’s a mass of niches, not mass market.

Q: How does an independent artist go about partnering with a consumer brand?

PP: Two ways–either by licensing music through a music supervisor that works with an ad agency that represents them, or by joining a group of artists that are attractive to a consumer brand as a group that reaches a very large group of consumers for the reasons mentioned above. Platforms like Sonicbids are great for that.

Q: Which countries have the best programs in place to help entrepreneurial artists?

PP: Clearly the US has the best and most advanced artistic middle class scene. Entrepreneurialism is part of the American social fabric. That’s why I migrated to this country. But other countries are realizing that this is a fast shifting movement and they are catching up. Europe and Australia and very actively involved in helping their artists reach new audiences.

Q: What success has Sonicbids’ approach had in the way independent talent is booked?

PP: We’ve leveled the playing field. Just this week, there is an artist from Iceland that’s touring China for two weeks, that booked the tour using Sonicbids. In June, there will be over 60 indie bands playing Summerfest in Milwaukee, the world’s largest festival, who got booked by using our platform. If you take any of the 42,000 Delta flights in the US this month, you can hear music from awesome independent artists in special all-indie channel programmed by using Sonicbids. That would have never happened a decade ago. In 2009 we had more than 71,000 gigs that were booked using the site–that’s three times more gigs than what Live Nation, the world’s largest promoter booked. It’s just as easy today for an artist from Boise to have access to the same types of opportunities as an artist from Berlin, or Boston or Brisbane or Bahrain. Plus, I am sure we’ve saved a tiny part of the ozone layer too…that is, no physical press kits required.

Q: What is your company doing to directly support these entrepreneurial artists?

PP: Because we started losing track ourselves, we actually set up a special area on the site where we outline all these programs which we are increasing every day, http://www.sonicbids.com/supportsindiemusic is the url. Last year, we spent more than $500,000 directly sponsoring bands to travel and to play on stages at festivals around the world. We’ve distributed more than $3 million to music promoters from all over the planet for the purpose of creating special slots allocated to independent music and encourage them to use these funds to pay these artists. We work hard every day to convince people that have grown up in the broadcast/mass market era paradigm that independent music–not a term that I love by the way–belongs on their stages, video games, toys, bookshops, coffee shops, college festivals, podcasts, TV shows, magazines, clubs, restaurants, house concerts, retail stores, marketing campaigns, etc. Our mission is to empower this new class of artists by helping them connect with all these promoters and bookers and programmers. That’s what we are passionate for, that’s what we wake up every morning looking forward to.

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To get artists’ perspectives regarding Sonicbids and beyond, the following questions were put to Natalie Gelman, Sebastian Keefe from Family Of The Year, Kotadama, and Noush Skaugen. (Warning, they’re all true believers.):

Q: These days, in addition to writing and performing, what other skills does an
 independent artist need to have in order to be successful?

Natalie Gelman: I think more than ever it’s about the humanity behind the music and artistry. People want to connect to you and be moved not only by your music and live show, but just by who you are. That’s why Twitter, blogging, responding personally to emails, and hanging out with your fans after shows is so important. Besides connecting with your fans, you should reach out to other artists. Some of my best opportunities have come from other artists who were fans of my music. Not to mention that you can support each other and know what each other is going through. The specific skill is being a people person.

One of the best ways to move forward is to realize it’s about them, not you. I try to listen, ask questions and see how I can help someone by thinking: “How can I make their job easier?” That goes for your fans, a music supervisor, a writer…anyone involved in your career. If you help someone they will remember your support and come when you need them to.

It’s important to be organized, disciplined and able to prioritize. There are so many things you need to keep up with as an independent artist. However, I don’t think the skills are as important as being determined. If you want to make a living as an artist and are 100% determined to do it, you will find a way.

Sebastian Keefe: It is very important to think of your band in the context of building a small business. Once your recordings and
live show are in place, the next step is to get yourself organized and set some goals. Nothing too far fetched to begin with, but this creates structure, and in turn, leads to accomplishment which then turns into momentum. 
Kotadama: Self-belief in what you’re doing and why you’re doing it…a positive attitude and much perseverance. Thinking outside of the square. If you are told that this is the only way to get there–as we were by a music director of a major radio network here–question it, and investigate other avenues.

In our case, we decided with the help of Sonicbids, to send our songs overseas and put it out there. Also, don’t accept second best for your efforts. We went to several recording studios initially to record our songs, but came away dissatisfied with the results. Expensive lessons. Others thought they sounded good, but we still were not happy. This became our next major challenge and we taught ourselves how to record, produce and master our songs to our satisfaction.

Kotadama: Self-belief in what you’re doing and why you’re doing it; a positive attitude and much perseverance; thinking outside of the square. If you are told that this is the only way to get there–as we were by a music director of a major radio network here–question it and investigate other avenues. In our case, we decided, with the help of Sonicbids, to send our songs overseas and put it out there.

Also, don’t accept second best for your efforts. We went to several recording studios initially to record our songs, but came away dissatisfied with the results. Others thought they sounded good, but we still were not happy. This became our next major challenge and we taught ourselves how to record, produce and master our songs to our satisfaction.

Noush Skaugen: The market today is very different from what it was 10 years ago, even a few years ago. No longer can you just be an artist, soley focusing on writing and performing, but one who must also have a business and entrepreneurial mind with the willingness to work long hours and give much of your life to your dream. Organizational skills are a must. It is a balancing act between ensuring one dedicates the time needed on constantly challenging your musical skill set, rehearsing and writing abilities while personally chatting with your fans regularly via the social networks, nourishing the most important aspect without whom an artists would not have a career; booking and managing the logistics of tour and local show productions; promoting releases and shows; coordinating your team and making sure they are all on the same page with regular meetings.

Essentially, what has happened is that the manager and the artist are performing much of what the record labels would have traditionally handled in the past. Now an artist such as myself, currently managing myself, all these functions fall on our shoulders. I believe it is necessary therefore to find the right specialized team players to support oneself. In some ways, it is a great thing because you are in control of your own destiny, and by out sourcing roles and projects to a specialized professional, you can get great results. One example of this is team member Frank Jonen, who advised me to start using Twitter before most of the music world caught on. This has been hugely helpful in my career. The issue, as always as an independent artist, is funding, therefore, we must be creative and find people who truly believe in us, who are passionate about music and, in particular, the music the act writes/performs. One must also put the business cap on and look for investors, presenting them with a coherent plan. In a way, it’s going back to the roots of how the great bands first started, making it all about music, and it lets the truly passionate and hard working artists run the marathon.

Q: What tools do you use to help you accomplish everything beyond songwriting?

NG: Here are some things I used that save me time:

www.Sonicbids.com - They let me know what opportunities are out there and clearly lay them out so I can decide quickly if its something I should apply to or not. The uniformity of both profiles for artists and gig listings makes it really simple to submit and start communicating with a festival, show or contest. Plus it’s a very transparent process. You can see if/when/what they listened to by checking your stats and who they ended up going with if you weren’t selected. It’s so important to use stats and information on what’s working in any business to help you improve.

www.Bandzoogle.com - My website, email, newsletter, and hosting is done by them. They have an easy to use and good-looking website design system that lets you update your own website. I also love their stat system which has lead me to realize I was getting lots of hits from specific parts of the country and other parts of the world.

www.ArtistData.org–I post new shows here and they post the show on all my websites for me. They also have a feature that submits the show to local press.

SK: We use a variety of social networks to stay in touch with our fans, mainly Facebook and Twitter. There are many ways to use the Internet these days. For example, we use Justin.tv to stream live video, and Indaba music to collaborate though cyber space. We also like to keep things personal and close to the heart. We record and produce our own music, use artwork made by our families, we’ll even send you a personal postcard from the road.

K: Pro Tools for recording, being innovative with our existing computer storage, and getting anything else we can, including secondhand unwanted sound gear that we can pull to pieces and use. We also have various online sites for researching plug-ins and social sites that we try to utilize for expansion of our fan base. The most significant site for our marketing and exposure so far has been Sonicbids. Without them, we would not have had the opportunities that we have experienced so far.

NS: My Mac laptop and my Blackberry. I feel like they are attached to me via an intravenous drip. Sometimes I have to cut this off completely to give myself a break and keep my sanity. Technology is running our lives, so I try and tread the tightrope to make sure I keep a balance.

Continued in next blog=

Tuesday, June 09, 2009 

Wikipedia‏ Category: Music From Bob Lefsetz letter: There’s an ultimately boring article on Wikipedia in today’s “New York Times”. For those scoring at home, the article focuses on editing, with the primary controversial topic being Scientology. I’ll leave the details out, if you’re that interested, you can click through. But what got me to write this was the sidebar, wherein the genre of Panic At The Disco was delineated to be one of the controversial topics. I’m thinking Panic At The Disco’s fifteen minutes of fame are just about up, but a synapse fired when I was reading this article and I realized, Wikipedia is just like Google, a dominant resource. I was sitting in the audience at the L.A. Acoustic Music Festival enraptured by Natalie MacMaster and I started to wonder, what exactly is her story? I didn’t go to her website, which probably wouldn’t render too well on my BlackBerry anyway, I Googled her Wikipedia site and clicked through and started reading. Turns out she does 250 dates a year. Fascinating, since she just had a baby in February and already has two other kids… When is she home? And the wealth of information on Bruce Cockburn was truly exhaustive. Drilling down to his honorary doctorates… And I didn’t even know that Jimmy Buffett did Cockburn songs! If you go to the act’s website, you get Flash animation, you get hyped, you get sold. Sure, you might be able to listen to some music, but the band’s site is not a good place for basic information. You end up with a history that reads like a corporate bio and tour dates and maybe a message board. Whereas when you go to Wikipedia, the site loads just about as fast as Google and you get the raw information. In other words, make sure your act has a Wikipedia entry! Unless you want to build mystery. Then you should have neither a Wikipedia page NOR a website. But that twentieth century game is rarely played anymore. Acts complain they can’t break through, not that their privacy is in jeopardy. Therefore, when you launch a new act, you should create a Wikipedia entry! If the act is brand new, keep the entry limited. If the entry doesn’t fit the act’s status, it ends up looking like hype and it is ignored. If you’re creating your own Wikipedia entry, think of it as a true encyclopedia essay. They might have a page on the Beatles, but Haircut 100 would get just a few lines. But at least online, every act is entitled to an entry! If you’re lucky, you’ll become big enough that fans will start adding and changing your Wikpedia page. Don’t worry about accuracy. Mistakes make it look like you didn’t write it, they make fans feel superior, wanting to make corrections or just feeling closer to the band than those editing entries. The key is to have a presence, a starting point, where a newbie can get up to speed, can find out who you are and begin his fandom. http://www.nytimes.com/2009/06/08/technology/internet/08link.html?ref=business Source: http://lefsetz.com/wordpress/