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Music & Media

Written by Tommi on 24.10.2008 09:00:45

Blog image for entry Music & Media I just spent a day at the annual Music & Media seminar in Tampere.

I've had a really strong hunch on a few things for a while now and today I got even more validation for all of them:
  • We're not really a part of the music industry today. They don't need us and we don't need them. Actually the latter is not true, but that's a nice way to justify not wanting to hang with the big boys.

  • We definitely don't have a place in what the music industry is going to be in a year or so.

  • We need to change how we operate. We need to come up with some drastic measures to find a completely new way of operating as musicians and as a label.

This is not meant as an elitist statement. Our DNA is not the same as the rest of the music industry. I've pondered the question "am I a musician or a record label entrepreneur first?" for a while now and every time the answer points loudly to option #1. I run an indie label because I'm a musician, not the other way around and my actions should reflect that.

I have a strong need to reinvent everything about us. We're small and agile, so we're the ones who should be capable of morphing to accommodate the changing times. Not the ones just staring like a rabbit at the oncoming headlights.

All this and the only lecture I attended was "What is rock?" by Jone Nikula. ÄIJÄ ÄIJÄ ROCK ROCK ÄIJÄ ÄIJJJJÄÄÄÄÄ!!!
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Comments (9) 1/9

11.12.2008 12:47:44 Beliel wrote

"We need to change how we operate. We need to come up with some drastic measures to find a completely new way of operating as musicians and as a label."

Have you thought of a "music club", like the one spinned by Sub Pop in the late 80's - early 90's, but as MP3's this time? :)

I quess I could join in if the prices were moderate.
2/9

11.12.2008 13:12:18 Tommi wrote

I must admit that my belief in making money on digital music is slim to none.

I think we'll be forced to give up on the notion of transforming recorded music into money and concentrate on transforming human interest into money. I've got a few plans and we'll be trying them out next year. We'll see what happens.
3/9

11.12.2008 19:15:35 Kennu wrote : "Spotify"

How about the Spotify model: listen to any song free, fund with audio ads. Basically like radio, but better choice for the user.
4/9

15.12.2008 10:20:11 Tommi wrote

"How about the Spotify model: listen to any song free, fund with audio ads. Basically like radio, but better choice for the user."

I have a really hard time believing that such a model would provide any substantial means of income. Also, with small-to-medium labels / artists the amount of work you need to put into running the whole infrastructure is rather significant.

That said, I do believe a system like that is feasible as a small part of generating revenue in the future, but more as a supplementary source, kind of like copyrights payments. The key issue would still be figuring out a way to pay those bills that putting music in recorded form generates.

At the moment the only solution I have is to cut down on all possible expenses. This means that making records for us is way more difficult and the end product will have a diminished quality.

The upside is that this forces us to be more self-sufficient and if making recording is not such a huge investment anymore, it can benefit the spontaneity and willingness to experiment.
5/9

16.12.2008 09:04:19 Antti wrote : "Selling cows?"

Record industry in Finland made most profit between 88-92 when there were three formats: CD, LP and MC. After CD is death or in marginal (of course there will be collectors and true fans which need their physical products, whatever it will be, but they will be minor), we only have digital left: and as far as I see it cannot give as much profit than any of those formats gave. It just doesn't give enough for customer. It's only a music, which was only a one part in traditional record (cover art, booklet, good gift, collectable)

I agree with Tommi that it is very hard for indies to make reasonable profit in digital distribution. Going "free to stream" model like Spotify or Last.fm would generate very little revenue. I would see it more promotion than actual sales. Comparing it to copyrights payment is actually quite a good. Something, but not enough.

Direct digital sales from labels & artists own store, with 100% profit could actually give much more revenue. I think fans will actually love to buy directly from artist. Of course this doesn't exclude selling in other shops and being part of streaming services, and this needs hard work promoting labels own websites. There are many things that can be done to give something more to paying customers: pdf booklet, high-res cover art, loseless audio formats, thank you page, special badge to stand out in labels forum/community, secret flash game(hmm..? maybe not), free/cheaper ticket to concert, early access to new songs...

I don't believe in those "pay to support" models. If business plan is "listen and donate if you like", then we have already lost. If I want to give money on charity, I give it to Unicef or WWF, not for beer thirsty rockers ;) But if this supporting really gives me something unique, something that can be compaired to buying records and owning that plastic waste called CD/LP... then we are on winning side. We could actually learn something from charity organisations, who are selling cows :)
6/9

16.12.2008 09:58:53 Tommi wrote

Something I _really_ do not believe in is artists / small labels selling their stuff direct. In the digital world, aggregation is where it's at. If you don't have the selection, you don't have the customers. Also, since the base costs of selling digital music in tiny amounts (1-5 tracks) is surprisingly much (copyrights costs, Paypal / bank transaction fees etc), it doesn't really make sense. Also, from the customers' perspective I think it's just so much easier to buy from places that already have my credit card and customer info on file instead of visiting some band's website and go through the trouble of registering and making the payment to get that handful of tracks I want from them.

I have a strong feeling that for people like us, recorded music is 99% for promotional purposes only in the (not too far-off) future. The possibilities for generating revenue are so slim-to-none that I'd rather just give up on it and try to come up with something else than try to fight off the inevitable. And I'd really like to emphasize that I mean "revenue", not "profit" as the latter is a rare thing in these circles.
7/9

16.12.2008 12:15:43 Antti wrote

Yes, for small bands / tiny indies I think it is much wiser to give lot's of freebies and make a good promotion. I do not know where to draw the line. I think for Apulanta it would be wise to sell MP3:s on their webpage. Also I think for Fullsteam it would be wise. Same for Texicalli. But smaller than those... it is hard to say where the line goes.

But I have to disagree with your statement: "If you don't have the selection, you don't have the customers." This is true for retailers, but I think it is a different thing when selling directly from bands/labels site. My best digital orders are from Eels, bought directly from their web home: http://www.eelstheband.com/downloads/index.php.

People surfing bands/labels sites are most willing to buy music from that band. If it's possible to sell directly, I would do it. I agree with you that it is too difficult now, there are problems to make it work for customer. I wouldn't sell single songs, only full albums and bundled albums (full discography etc). This makes those costs you mentioned actually very small.

And more of this: "If you don't have the selection, you don't have the customers." What comes to Levyvirasto / The Ground, our indie sales went badly down, when we got bigger selection with EMI on board. I believe there are good possibilities for finding succesful niche in digital music and it is not always about the selection.

But I have to agree, that some days I share your thoughts on "making money on digital music is slim to none". Globally things are different, digital is growing. It will never be the same it used to be, but also, producing music is cheaper. Most people has their own "studio" where they create music. Publishing music is cheaper. Creating "digital album" versus creating physical copies is much cheaper.


Little offtopic maybe, but this relates to this "we have already lost" mentality: What comes to piracy... I remember when I was kid, I used to "warez" everything. Not just me, but every kid. And when the internet came, we downloaded everything. A) We didn't have the money B) It was easy C) We didn't felt it was wrong. I think it is exactly the same thing that kids do today.

But now when I grow up and got some money, I stopped downloading illegal software or games, because I find it easier just go and buy them (most of the time directly from publisher/developer). I do not download music, unless I cannot get it any other way. I download movies only when I am too lazy to go makuuni. If I could get them in my XBox for 3-7?, that would be it. People like to spend money on the things they like or the things that make their life easier (sleeping on sofa and downloading vs. going to movie rental shop).

All I am trying to say is that if we would have asked young kids 10 or 15 years ago that what they think of piracy, the answer would have been "It's cool to have free things!". But people chance and grow up, today they (we) are willing to pay.

Sorry for bad english, haven't wrote lengthy thoughts in ages :) I am actually very interested to see, what you guys have came up with your idea to transforming human interest into money.
8/9

16.12.2008 15:02:42 Kennu wrote

As a consumer I think selection is essential. When I buy individual (vinyl) records, I want one store where I can listen to a wide selection of new stuff and pick the good ones. For me that is http://streetbeat.ac. I even predict there will be virtual aggregator stores in the future, to make it easier.

When I listen to mainstream music, I like the Spotify approach, where I can just browse around and look up popular titles. Wide selection is essential. This service is comparable to Pirate Bay & co.

Very rarely I care about an individual band or label so much to go hunting for it. That only happens when some friend is part of the band and publishes a record. :-)
9/9

03.01.2009 17:09:12 "I wonder"

Maybe some key-figures about your business would show that
indie - way -to -do - it is the new way to survive the
hard times of music industry.
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