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Wednesday, November 5, 2003

back to “plan g”

in our last episode, i made an attempt to explain why the cd would be with us for quite some time, how it was valuable as an existing, functional, open platform, and i gave just one hypothetical example to demonstate that it was economically viable at the lower end of the curve. this was largely a folllow-up on an earlier post i made – i felt compelled to lay some groundwork. what i didn’t attempt to do was address anything particular to gary’s proposed model.

today, i’ll start exploring that model in some detail. again, i’m going to suggest anyone coming in now do their homework since i’ll probably expand on and reference some of those concepts. to get started, i’m going to lay yet more groundwork… in the process, this is going to turn into an epic. i hope you’re comfortable.

finding new success metrics for musicians

an important thing to realize is that there is “life” and success all along the music-business-power-curve. life happens outside the billboard charts. sometimes it even happens outside the american market. it happens for folk singer-songwriters who never leave their apartment and it happens for britney.

one point where i still think i have strong agreement with gary, is the need to redefine the success metrics for the working musician. “having a cd” isn’t much of a measure of success – there are simply too many variables involved. “getting signed” isn’t a great measure of success either, because now you’re into a long-term (lifetime?) commitment, you don’t know how it’s going to play out, there are other people involved, and you have to rely on their intentions and skills.

let me propose a few other success metrics, in roughly escalating order, that musicians might embrace to keep their egos inflated and stay in the game: do you like your music? do your friends like your music? do strangers like your music? can you get gigs? can you get paying gigs? can you get enough paying gigs and make enough money to quit your day job? can you get enough gigs to get on the road and get more gigs in new places? once you’re on the road, can you afford to get off the road once in a while and take a breather?

your metrics may vary

i do try to keep things simple (despite the appearances of these posts), so for me, “musician success metrics” boil down into two generalities: 1) can you find your audience? 2) can you afford (in the broadest sense of the term) to serve that audience? i base these on the broad concept that the money (to keep you alive and making music) has to come from somewhere. if you don’t have an audience, nobody’s listening to your music, and if nobody’s listening to your music, it’s really hard to make money with that music.

anyone in music has a decent shot at #1 – it doesn’t matter if your audience is one person or one billion. if you’ve found your audience – if you’ve made a connection between yourself and that audience – then that is a success. period.

the second one is a bit trickier, because it generally involves a long list of compromises and inflection points in a career. if you live with your audience of one, and sing to him or her in the evenings while you go about your regular life, then that’s a success too. on the other hand, if your audience is one billion, you probably can’t keep your day job, and you will have to cut some deals along the way. it becomes more and more an issue about living with those deals you’ve made. with other people’s money funding your career, the question morphs a bit – can you afford the emotional stress of the global stadium tour? can you afford to be away from your child so many months? can you afford the physical demands? can you afford to play that same, old, tired, classic first-hit song over, and over and over again for 25 years without going insane? can you afford the therapist? can you afford the plastic surgery? can you afford to “go commercial”? etc… etc… etc…

somewhere along your journey from an audience of one, you need to figure out how to balance your needs with the demands and expectations of your audience. when do you quit the day job? can you afford to play a big festival for free? what happens when you break up with your biggest fan? or your drummer? each musician is unique, each audience is unique, and each path is unique. there is no formula to guide you from here to there. you will stumble along the way, you will make mistakes and have regrets. nothing about this business is easy.

back to business

so that’s a bunch of happy crap about life and balance and success and what’s important, but we’re in the “music business” category here at meta-roj, and we’re talking about “music business models” so it’s time to cut through the ego-stroking, hand-holding cheesy stuff and talk business. that means maximizing earnings, maximizing return, expanding markets, finance, leverage and all those business-like things.

if you’re making music, and have an audience, are happy, and you can keep a roof over your head, food in your stomach and clothes on your back no need to read any further, you’ve done it, and it’s a great thing. on the other hand, if you’re still trying to quit that awful job delivering pizzas with your 15-year-old car so you can break out and make your music, it’s time to pay attention. this is your first deal – your first compromise. you’ve just decided you’re in it for love and money, not just love.

throwing the gauntlets (both of them)

up there, i said “can you afford to serve your audience.” and i do mean serve. we’re in business now, and they are your customers. you live or die, as a business, based on the fickle, transient nature of the music-loving, music-buying, concert-attending, merchandise-buying public.

to succeed, economically, with music, a primary challenge is to make your music meaningful to your audience. it doesn’t have to be some deep, serious meaning – the classic “it’s got a good beat and i can dance to it” is enough – and once you forge that meaning between musician and audience, you want to keep that relationship going as long as possible, in as many ways as possible.

another challege is to grow that audience. it’s about growth at the top-line. once you’ve sucked every possible dollar out of your first 10 fans, you need another 10, or the well runs dry, and you’re out of the music business. once you’re in the game, if you stop swimming, you drown. worse, this business accellerates and has structural pleateaus. you really need to go from 10 fans to 100 to 1000.

plan g: release early, release often

disclaimer: everything i’m about to say is intended to point out something that a musician thinking about adopting “plan g” should think about – and they should make up their own mind based on their own circumstances. i’m just here to shine some light on the potholes in the road for you.

finally, we get to the subject at hand – it’s been a long, hard slog, but i’m glad you’re still with me. gary has proposed putting out new versions of songs, cheaply and constantly. these new versions could be subtle, minor refinements, or major overhauls. there’s something to be said for this (and generally, he’s said it), but what i think he’s missing is fundamental to building those connections with your audience and building your audience. the trouble, with a capital t, comes from several directions…

first impressions
relationship-building 101. you only have one chance to make a first impression. your “early release” music finds its way to my delicate, well-tuned golden ears. excellent. but the recording sucks. maybe the eq is a little off. maybe you didn’t get the mud out. whatever. you could be the best band in the world, but you’ve just ruined a potentially great relationship. i could’ve fallen in love with you forever and chased you around for weeks or months at a time on your next tour, but you didn’t impress me the first time, and now every time i hear your name, if i remember you at all, i’ll just assume you still suck. remember, i have a limited amount of attention to devote to music, so you better impress me fast.

the ponderous public
the music-listening public moves slowly. it’s ponderous and awful. gary’s coming from a technology background, so i’ll try to put it in those terms: early-adopters constitute a very small fraction of the total potential audience. sure, there are the die-hard musigeeks that chase after new music and new bands and new things, but most of us just sit around and wait to be spoon-fed something we’ll like. so the “release early, release often” approach may score revenue from the early-adopting musigeeks, but it happens at the expense of the broader potential audience.

by the way, the musigeeks are having some trouble staying employed “in the field” so many of them can’t afford to buy music from dozens of different bands and go see a few concerts every week, so the revenue potential from the early adopters is shrinking.

the discrimination problem
most music sucks. i mean this on a personal level. for you, as an individual – if you don’t like that country twang – there goes thousands of talented, competent performers into the “sucks” bucket. this is what i call the discrimination problem. technophiles like to hang this under the “metadata” banner. there are a few interesting efforts out there to help solve the discrimination problem, with terms like clustering and dimensions and proximity, but ultimately, this is a matter of taste.

taste is a transient thing, both for the individual and for the public at large (remember grunge-rock?). most of these technological approaches to defining taste actually make that first bit of trouble much, much worse. if i stumbled into an “early version” of one of your songs, and i don’t like it, i’ll vote you down. and not only will i never hear your improvements, because the computers will keep your new material away from my precious ears, other people who trust me won’t hear your stuff either.

it’s about my version of a song, not the new version
maybe i fell in love with that release. you remember, the version you did in june. or was it july. anyway, it was amazing. and the recording was amazing. and we connected. this is exactly what you want to have happen, because now i’m a fan, and that one song really means something to me. that, of course, is something you can capitalize (as in business) upon. i’ll check out your website and everything. i’ll go through your pages and i’ll find 20 or 30 or 50 or 500 versions of that song. now you seriously expect me to listen to all of them? seriously? i don’t want the latest version, i want the version that my girlfriend played for me on our first date, so i can play it again for our wedding (i’m just romantic like that). and if you make me ask her what version it was, or if i guess wrong, you’re going to ruin my wedding. is that any way to treat a fan? how am i supposed to keep track of all this mess? i’m looking for “imperfect circles” by phase 42, from the october 2003 sessions, version 4.21, acoustic”? no, not that one. the one with the other snare drum.

compromising the social value
the release early, release often model also breaks down the unifying social value of popular music. i don’t want to repeat that argument here, because i’ve already hashed it out with tim and i’ve confessed my sin of omission in public.

there’s audience-building power in “isn’t britney great!?” that is destroyed by “well, she wasn’t so great until the june 2001 recordings, after she got the new bass player”

i liked you better yesterday
there’s always the chance that tomorrow’s recording will actually be worse than today’s recording – at least to me. some people might want to follow the evolution of the band from day one – and i think there’s a lot to be said for that – but there’s also a lot to be said for standing still long enough for your audience to catch up with you. don’t be a moving target. if you grow too much or too fast, and your ponderous, expanding audience can’t keep up with you, you’ll end up leaving them all behind. it takes time to penetrate the conscious of a large audience, and if you’re constantly releasing new material, none of it has time to “grow on” your fans (or potential fans).

to illustrate, consider any band that’s been together for 20 years and how much they like that first song that got popular – the one they still have to play, every show, every time, because the audience just expects it. it’s the song that introduced the fans to the band, and now they’re stuck with it – even if they’ve grown to hate it over the years. remember that thing i said about “serving your audience”? there it is.

consumer expectations
let’s say you get into this model, and you put out new stuff every week or so. and your audience loves it, and starts to expect it. how long can you keep that up? when does the burnout catch up?

finally, it’s all about the benjamins
you can release 12 monthly versions of a song recorded at $80 each (for a total of $960), or you can record the song once for $800 (your specific price-points will vary). as always, there’s a choice to be made here – if you think you can get a better ROI with monthly releases, you should do that.

the logical gap

probably the biggest gap in “plan g” is that it seems to be crafted entirely from the perspective of the musician. and that’s not a bad thing, but ignoring the audience – the quirks, behaviors and habits of the audience – is no way to get them to pay for your dinner.

music isn’t blogs

the difference is that people will listen to the same song (same version of the same song) over, and over and over again for their entire life. they’ll buy it in every new format as formats become obsolete, and they’ll request it at their anniversary and funeral. that isn’t [generally] true of blogs. i may read the same blogger daily, but i don’t go back and read october 11th’s post because it was just so good. and here, we introduce a huge problem of economics. sure, i can drive down the cost of production, deliver the wine without the bottles, and give it all away for free, but no matter how low you go with production and distribution costs, you can never get below zero. so, whatever model you’ve chosen for your particular situation, you might want to consider a fundamental accounting principle – if it costs more to produce than it brings in, you can’t make up for the difference with volume.

to a technologist, and to the network, bits may be bits, but that’s not the relevant. where the value is created – at the interface between musician and audience – music bits aren’t the same as text bits. fortunately, bits don’t wear out like vinyl does (i’ll get to that later).

ignoring the rift

another key issue is making the model work at both ends of the curve. today, i just don’t think it’s possible. this has been hashed out a bit elsewhere. to summarize, there’s a rift opening up between the “pop star” high end of the curve and the “working musician” low end of the curve. these have really become very different places to do business. it’s possible to make it through the rift, but it’s getting harder and harder, and there are big compromises along the way. you’ll probably even have to make a video.

so, does this model work for a pop star? i don’t think so. it can work along parts of the curve, but above a certain point – the point where you need big dollars and big promotion to capture the attention of a big, big audience and get them to open their wallets – no. at that point, an $80 recording isn’t going to live up to the expectations of the fans. at that point, you need revenue from more than one source. you can’t get there on concert tickets alone because, there are only 365 days in the year, and you’re not young enough to play every one of them.

of course, if you execute well – and luck smiles upon you – you can probably make a decent living within this model, but it does break down at some point. then you have to change models, get out, or hang on where you are for as long as you can.

a metric that can hurt

a bit of an aside for the musicians with pop stars in their eyes…. as i’ve explored in some detail, shooting for the charts is very, very risky business. but, if that’s what you’re in this business for, don’t let me stop you. just realize you’re in some extremely rarified company. there were 165 “usa top 40 singles pop chart” artists in 2002. figure out your own odds, but this is roughly 1 in 15.4 million (assuming a global population of 6.3 billion people and an average “charting band size” of 2.5 people – i made that number up, it has no basis in reality).

and then there’s the one-hit-wonder conundrum. yeah, you had a hit, but can you follow it up? does it matter? or can you go home at the end of the day and be happy with “i had a hit”?

look around, and consider all the other musicians that were doing things in 2002. narrow that down to the working musicians (every-other-weekend jamming-with-friends need not apply). can you find 1650? 16,500? 165,000? 1,650,000 that still qualify?

(personally, i still don’t know. this has been the most difficult number i’ve ever tried to pin down, and if anyone has a clue and can back it up, i’d love to talk to them).

clarifying the ephemeral nature of music

at one point i thought (and said) i agreed about the ephemeral nature of music. now i’m not sure we really agree on this. music surrounds us – it’s everywhere from elevators (well, not so much anymore) to movies, restaurants to offices. we pass through this music soundscape, mostly passive and unconscious of the music.

occasionally, music becomes important to people. this might happen in a few different ways – by sheer repetition (a common mechanism at the top of the curve) until it defines a “period of your life,” by association with some personal event, or perhaps as a pure transcendent musical experience. maybe something else. to find value in music it has to be important – it has to be meaningful, to someone [else].

i think i’ll go with “transient.”

beware of anyone with all the answers, especially me

i don’t know what’s best for a given musician, but i can give them some options, and i can give them my opinions.

my best advice for anyone in this business of music: if someone tells you they have the formula, that they know all there is to know to make your music career fly, they’re full of crap. and if they sell you a formula (at a seminar, a class, in a bar, at a coffee shop, or in the plush corner office of a shiny record label office tower) without knowing anything about you, your music, your audience, your goals, your skills, where you’ve come from, and what all this crazy stuff means to you, then just run. run, run away. chances are you can’t afford that formula.

yesterday, i tried to explain how “making a cd” could be a sound business decision for some musicians – and demonstrated a 16+% ROI with a couple random real-world live examples for recording and manufacturing. that does not mean i’m suggesting everyone who ever picked up a guitar should rush out to book time at a studio in chicago. i was trying to make a point about the value of the cd as an open platform, not pitching a formula for everyone to follow.

and now to take some questions from the floor…

… to address some of the comments and questions, from the front-channel, since i picked up this trail of breadcrumbs….

Q: who would put screamin’ jay hawkins on the radio today?
A: if you mean, actually put screamin’ jay hawkins on the radio today, then wcbn, ann arbor, mi. wgbh boston, ma. wwoz, new orleans, la. kfai st. paul, mn. wfmu new york, ny.
on the other hand, if you mean put someone like screamin’ jay hawkins on the radio now, violate an airplay ban and risk losing their jobs (a lot of radio dj’s did lose their jobs spinning hawkins), then there aren’t many people who would do it. you can lay more blame for that on radio consolidation than on the cd, but happily, you don’t have to be on the radio to make a living in this business of music.

Q: when was the last time you bought sheet-music?
this answer is probably going to scare you a bit. personally, i don’t have much use for sheet music. but there’s a little company that does music notation software, and they think the the worldwide sheet music market was about $1 billion in 2000. this little company has sold 250,000 sheet music downloads, and they think the market is expanding.

Q: when was the last time you bought a vinyl lp?
personally, it’s been a while, but our friends at the riaa have an answer. figures are for the first half of 2001.
cd units – $5.5 billion
dvd music video – $70.1 million
cassette – $176 million
lp – $12.9 million
lp, cassette and cd singles (combined) – $5.7 billion
also interesting, there’s a company out there that thinks there’s a market for $10,000 record (as in vinyl) players. no needle, no wear. it’s about playing all those songs you fell in love with back before cds existed.

Q: and then there’s the folkways records…
A: if you know someone who’s making music that should be preserved for future generations, bring the recording “studio” to them. it’s cheaper, and they’re more comfortable. a studio can be a very intimidating and cold place. it’s not quite folkways, and they do spoken recordings (as opposed to music), but it’s worth mentioning: storycorps. an hour-long recording here costs $10.

in [partial] conclusion (anyone still awake?)

“plan g” is a formula, but it’s not universal. it relies very much on the assumption that your audience is technologically and musically savvy, interactive, dedicated, and will work for their interaction with you. your audience also has to be committed enough to stick with you as you fumble and trip along your path. if your situation fits into that set of assumptions, it could work. it also relies very much on technology, because without new technologies deployed to facilitate the emergence of “play list programmers” and other filters to keep the noise level down. if you think these technologies already exist, or are just on the horizon, it could work for you.

to be honest, even with this epic post (told you it would happen), i barely scratched the surface of this model. but, it’s time for me to find some dinner, and so i turn the net over to you….

update: yes, this was intended to provoke comment, please do.

posted by roj at 8:08 pm