Money and the Music

David Bazan's Unique Funding Schemes

In past posts, I talked about fan-funding websites that allow artists to directly solicit money for musical projects by offering fans special products above and beyond the music itself. David Bazan, formerly of the quazi-Christian alternative rock band Pedro the Lion, has taken this approach to his fan base from his website www.davidbazan.com. 

In a post on November 1st, Bazan solicited $35 and $40 dollar "donations" to go towards the cost of producing his next record, "Strange Negotiations." Here's what was written,

"David is making a new album right now! The songs are all there, recording is underway! We are shooting for a Spring 2011 release. Barsuk gave him dough to pay for dudes to play on the record and some gear upgrades to make it sound great. But in order to focus his full attention on recording (so he doesn’t take three years like he did with “Curse Your Branches”) we need to keep him at home as much as possible until he’s finished recording the album. That’s a little tricky because a significant part of his income comes from touring."

During the month of November only, Bazan offered his fans the following deal: Donate $35, and receive 1. A limited edition t shirt which reads, "I Helped Bazan Make A Record," 2. a copy of the CD when it comes out, 3. Your name in the liner notes of "Strange Negotiations," and 4. A $5 dollar coupon towards the purchase of merchandise at a show. For a $40 dollar donation, one could receive the same deal, except replacing the CD with a vinyl record.

These offers follow the model of a website like Kickstarter closely, except I believe Bazan could have had even more success (the website now says the offer has been sold out) had he offered tiered funding options with greater rewards for more money. 

The more creative move that Bazan is making, and has done in the past, is a tour of "Living Room" Shows, where he sets up gigs in fans homes. He looks for fans who have large houses that can accommodate 40-50 people, and then sells tickets for $20 each. Hosting a show for an artist you love is something many fans would gladly do free of charge (or for the 5 complimentary tickets he would receive) and Bazan gets to cut out the promoters and venue owners that would otherwise profit from his concerts. In addition it's a great way to connect with fans on a more personal level and create a memorable experience for those fans. For artists like Bazan, who have had moderate success in past, but still have to scrape by as a performers and recording artists, strategies like these are a great way to fund a career and separate themselves from the indie music pack.

 

I'm Officially Geeking Out in the Last.fm Playground

Last.fm is a website, social network and downloadable program that allows you to track your music listening habits. With this data you can look at charts of your favorite artists, discover new artists that are similar to your favorites, and meet other music fans across the world who share your tastes in music. It also offers a Pandora-like radio feature where you can create radio stations based off a single artist, or stations based off of what Last.fm thinks you will like. 

I've never been one to listen to a lot of internet radio, and what always drew me to Last.fm were the charts. For whatever reason, I just LOVE tracking my listening habits. Whenever I become obsessed with a new artist I watch these charts patiently to see how this new love will stack up against old flames. Bob Dylan sits comfortably a top my all time list with over 1300 plays, but its a dogfight further on down the chart. Will Robert Pollard overtake Wilco? Can Pavement sneak into the top ten and knock off Elliot Smith? It's gratuitous in its solipsism, but what else are social networks for if not to allow us to bask in self-reflection?

Last.fm has been trying hard to turn some of its 40 million world-wide users into subscribers by offering premium content like ad-free browsing and radio listening. They've intensified this push over the last year by introducing the Last.fm playground which includes a number of premium charts and visualizations that bring their data to life. I recently made the leap and purchased a three dollar a month subscription because some of these features looked too cool to resist. I'll talk a little bit about my favorites and give you guys a look at the cool premium content they offer.

(I recommend downloading the pdf files of these visualizations because they offer much clearer resolution than the pictures I've posted below)

Download Groovyjazztime_listening_trends

Download Groovyjazztime_music_universe

Download Groovyjazztime_tags_tube

LISTENING TRENDS

My favorite premium feature has to be the listening trends. This is a visualization of what artists you've been listening to over a set period of time. Above you can see my listening trends over the past year (my last.fm user name is groovyjazztime). You can also choose to to look at 6, 18, or 24 month periods. I particularly like this feature because its kind of like looking through old pictures. You take a look at a time period and remember what you were listening to then. Perhaps there was a certain event that spawned a listening binge on a certain artist, or someone you met that introduced you to a band. 

MUSIC UNIVERSE

Another cool feature is the "music universe." This is a visualization that looks at all your listening for the previous year and maps bands in seperate orbits according to genre. Check out the picture above to get an idea of what I'm talking about. My biggest genres are indie, rock, and folk. I like this one a little less because I'm a bit skeptical of genre classifications. Also, there is less ability to customize the time frame that you want to look at. At this point, you can only analyze 2009, and with 2010 almost coming to a close, that leaves out a lot of data.

TUBE TAGS

Tube tags are kind of a combination of the music universe and listening trends. It's a neat color-coded visualization of your listening habits by genre. As you can see in the picture, each genre is assigned a "tube" of a certain color and these tubes weave in and out along a time line. Each time there is an uptick in listening of a certain genre, a white dot appears with the bands that caused the uptick are listed underneath. 

These are just a few of the features Last.fm offers on its network. Take a look at playground.last.fm to see the full list of toys. The VIP symbol next to a link indicates that it's for subscribers only, but there are many features which are available to all last.fm users. Last.fm is far from a perfect social network. As I've discussed before, they have no facebook application of their own, and no friend finder feature. These are serious flaws, but the there's enough that's really cool about Last.fm to think the company, which was acquired by CBS Interactive in 2007, has a bright future.

 

The New Trend of "360 Deals"

The Record is an excellent music blog from NPR music, and one of their regular segments is You Ask, We Answer. This week they try to parse the term "360 deal," which many record labels have been throwing around as the future of their business models. The most famous "360 deals" are those signed by Madonna and Jay-Z in recent years, where these artists were given nine figure contracts by Live Nation Entertainment in exchange for a cut in a variety of revenue streams including album, ticket and merchandise sales.

While creating additional revenue streams is absolutely necessary for record companies and outfits like Live Nation, I've been skeptical of their purpose for most musicians. How would an up and coming indie-rock band benefit from letting a record company get a cut of their ticket or merchandise sales? The Record's article softened my point of view a bit. They point out that having institutional support is more necessary for some artists than others. For established or asiring pop or country stars a record label might be more necessary than an underground rock band. Indie music has always been more successful by promoting itself through word of mouth, but the next big pop hit will usually need a big promotional push to achieve ubiquity.

Recorded music, whether or not it remains a healthy source of profit, is still a musicians biggest promotional tool as well. If you're trying to sell out your next gig, it's essential that people have your record -- whether they've paid for it or not. A record company can help disseminate records even if their not profiting from them as they did in the past. But they'll have to get their cut somewhere. A 360 deal isn't going to be right for every band, but some musicians will always benefit from corporate support. Those groups should consider letting companies in on their other sources of profit.

 

The Underground World of NYC Subway Musicians

The tension between art and commerce has a storied history, but nowhere is it more conspicuous as the New York City Subway. The city’s underground teems with musicians, artists, and performers soliciting donations for their work.

Some, like singer and ukulele player Crow Joe Ryan, make their living from the coins and dollar bills subway riders toss into his tin. Others use the forum to promote their careers above ground.

These public performers call themselves “buskers,” a word derived from the Spanish verb “buscar” meaning “to seek.” They’re somewhat of an anachronism in a world where hit songs can be downloaded for under a dollar, but are more often procured for free.

With the various business models that musicians have come to rely on buckling under the pressures of the internet and the explosion of the number of forms of entertainment, busking has stayed more or less the same. “I haven’t noticed any difference,” in the amount or kinds of people who play in the subway says violist Willy Naess, who has been busking in New York for ten years.

It seems odd that in a world where world-famous musicians have trouble convincing their fans to spend 99 cents for a professionally-produced hit song that amateurs could make any money at all playing in the subway. But there is something about a musician confronting you with their art that seems to motivate people to donate money. “I think some people appreciate another human being putting themselves out there and trying to contribute something of beauty to the work day of New York,” suggests Elizabeth Rogers, a busker associated with Music Under New York (MUNY), a program run by the Metropolitan Transit Authority which auditions and selects over 100 musicians to put on weekly performances in the some of the busiest subway stops in New York.

MUNY has been promoting music in the subway since 1985 and has “garnered great enthusiasm from the commuting public,” according to its website. Performers selected for the program are given personalized banners to display where they perform, but their compensation is no different than any other busker: what passersby deem to throw their way.

Glenn Roth, a fingerstyle guitarist and MUNY performer, sees benefits far beyond the few dollars he makes in an afternoon of playing. Playing in highly visible locations like Union Square is “the best free advertisement there is out there,” he says. Roth plays several gigs a week, including weddings, corporate events and club dates, but he says the subway is one of the best places to attract new fans and sell CDs.

The subway is a unique place in modern society where people are relatively undistracted. Most riders are cut off from the internet while underground. They commute armed with just a book or their thoughts to entertain them. Naess uses this dynamic to his advantage. He traverses the subway cars themselves playing Bach cello suites, finding he makes more in the confines of the car then when he used to play on the platform. He sees people giving money for a variety of reasons: some people are just generous, but others are pleasantly surprised to hear classical music on their commutes. “People say to me, ‘that was actually really good. I wasn’t expecting to give you anything, but here’s a dollar.”

Rogers believes that busking is unique in the personal connection it can foster between a musician and an audience. Passengers aren’t expecting to hear something that moves them, that makes them pause and reflect. “We live such busy lives, and people tend to just go go go. I’m doing something to help someone slow down a moment and notice this moment . . . to support them to just be there.”

 

Girl Talk and Fair Use

When an ground-breaking indie artist like Greg Gillis, aka Girl Talk, releases a new album, one would expect it to cause a stir among music journalists. One wouldn't expect to the Wall Street Journal to spill to much ink over the subject. But the past two releases by Girl Talk: Feed the Animals in 2008, and All Day released have fomented discussion across media about copyright law. 

Girl Talk is a "mash up" artist, which means he creates his art by blending pre-recorded songs together, to form a new work of art. This isn't a whole lot different than what many djs and hip hop artists have been doing for decades, but Girl Talk brought a new type of mash up art to the forefront in the past five years. The shear scale of his sampling is what sets him apart from earlier forms of the practice. Girl Talk's new album uses over 350 copyrighted works, and many of them are quite popular. All Day, for instance begins with over a minute the song "War Pigs" by Black Sabbath, played continuously with rap songs by Jay-Z and Ludacris pasted over it. 

Whether or not Girl Talk's sampling is "fair use" has been the topic much discussion but very little litigation. The New York Times debated the matter two years ago, as did the Journal. Idolator took it upon itself to parse U.S. copyright laws itself, making  an end run around the self-serving opinions of lawyers. Paid Content also discussed the matter. Their conclusion was that the music industry is too scared to litigate. Profits from artists, mostly hip hop, who pay for sampling are too reliable to risk a precendent that would go against them.

In my humble opinion, here's just another reason why copyright laws across the globe are grossly inadequate. If someone like Gillis can just flout the rules with impunity, what's the point anymore? Laws are important, but no democracy can enforce laws that the majority of its citizens see as ridiculous or irrelevant. It also makes it less certain that when newer, more sensible copyright laws are written, the public will take them seriously.

 

CEO of EMI Gives Pep Talk After Loosing Law Suit

A memo sent from Roger Faxon, CEO of EMI music group, leaked yesterday on Billboard.com. The memo was a bit of a pep talk for EMI staff after EMI's parent, the private equity firm Terra Firma Capital, lost a lawsuit against its creditor Citigroup late last week.

Terra Firma Capital sued Citigroup alleging that they had mislead the private equity group into thinking there were competitors also bidding for EMI, when in fact they were the only suitor.

According to Bloomberg, Terra Frima has had to ask investors to help meet debt covenants owed to Citigroup since the summer. In 2006, a year before Terra Firma bought EMI, the company was still posting profits, but saw a loss of 512 million pounds in the fiscal year ended March 31.

Faxon sent the memo in order to dispel four myths: 1. EMI will go bankrupt if it fails its covenants, 2. EMI will sell out to one of its rivals, 3. EMI will sell off catalogue assets to stave off financial ruin, 4. EMI will be broken in two to post collateral.

Faxon refutes the first two by basically saying that EMI has the cash to continue its operations (he doesn't mention for how long) and that no the record industry as a whole is hurting, so who could afford to buy them? The final two he refutes by saying that EMI is strongest and most profitible as a whole entity. 

Any company should be, in theory, more valuable than the sum of its parts. Otherwise the owners of the company would just sell the parts and be done with the rather difficult business of running a company. But when a business can't meet its debt (and Faxon was tellingly silent on how long it will be able to do that), then the spare parts will eventually have to be sold to satisfy creditors. My fears would not have been assuaged by Faxon's memo.

 

With Kickstarter, Fans Fund Releases Directly

A couple weeks back, I posted a piece about Enemy Soil, a record label started by the hip-hop group Jedi Mind Tricks and their manager, Yan Donahue. I talked with Donahue about how a record label survives in an environment like today's. He spoke about direct-to-fan marketing, and taking advantage of the unique relationship that a musician has with his fan base. Leveraging that relationship sounds nice, but also like a difficult task. Ownership of music used to be the way someone expressed their fanhood, but those days are gone. Fans still buy merch and attend concerts, but those markets are saturated, and unknown artists can't afford to charge the kind of high prices that major artists get away with.

The past few years have seen the proliferation of companies hoping to connect artists with fans who are willing to fund their projects. Sites like Slice the Pie, Sellaband, and the Brooklyn-based Kickstarter are looking to tap into the enthusiasm listeners feel towards music. These companies allow an artist to petition fans directly for support and offer them unique products for their investment. 

In an interview with the New York Times last year, Perry Chen described Kickstarter as "a sustainable marketplace where people exchange good for services or some other benefit and receive some value." Indeed, Kickstarter is no charitable organization. Take a look at Marissa Nadler, who is hoping to raise the $11,000 it will take to record her next album. Fans can choose between 10 different donation levels ranging from $10, where they will receive a digital download of the album, to $6,000. At that price, Marissa is offering to fly anywhere in the world to play a set of songs of the donors choosing. So far, the most anyone has pledged is $500 for CD and vinyl and digital editions of the album, an original painting by Marissa, an unreleased album, and a CD of demos. 

Of course to get people to notice you and pledge money, you've got to stand out. Most artists on Kickstarter make their pitch through video, and Marissa's is particularly charming and creative. Take a look below.

 

 

David Byrne on How Context Shapes Art

 

 

Earlier this year, David Byrne gave a talk at the TED conference in Long Beach California, espousing his theories on how architecture helps shape the music that we create. Choral music from the Middle Ages, with its drawn out phrasing and lack of rhythm was complemented by the resonant churches in which it was sung. Jazz bands that played on river boats and in small clubs played loudly to drown out the background noise and learned to repeat and improvise over the parts that the dancers enjoyed most. Byrne lists several examples throughout history where context has helped shape art. 

Such a point of view is refreshing coming from a musician, especially one with the indie credentials that Byrne has. Too many artists and fans hold on to an image of musicians as agents who create despite the forces around them: the band that struggles against the demands of a record company to achieve its true vision. In reality, musicians are a reflection of the culture at large. Market forces, much like the contexts Byrne discusses, have clearly had an impact on the kind of music we produce as a society. I would argue that this is neither a good thing nor a bad thing, merely a fact of life.

Musicians who cling to arbitrary rules which they feel define what constitutes art and what constitutes commerce are only limiting themselves and are guilty of vanity and narrow mindedness. Attitudes are starting to change. It is much more acceptable to sell one's music to television shows and commercials. Musicians are starting to see that the album is not necessarily the only form their work can be packaged in. Those who recognize these constructs as artificial and temporary will be much more suited to succeed in a rapidly changing marketplace. David Byrne is a gifted and visionary musician, and others trying to succeed in this business would do well to adopt his bigger-picture understanding of music and the standards by which we judge it.

 

The Case for Optimism

Jeff Pollack, Chairmain and CEO of Global Media and Entertainment, wrote a column in the Huffington Post this week in reaction to reports that 2010 is threatening to be the first year where digital music sales post a year on year decline. He posits a variety of explanations for sales being flat: higher prices for hit singles, the availability of music on sites like YouTube and Pandora, and an ever more ubiquitous internet that can stream alternative entertainment options to smart phones and tablet computers. His basic argument is that with more entertainment options, music listening is naturally going to suffer. Moreover, when people do want to listen to music, they want limitless access and don't want to be confined to their record collections.

"Ten years ago, the concept of physical stock controlling my access started to seem odd. When I stream a TV show or download a song, they are never out-of-stock, hence the demise of Blockbuster. Now, the concept of any sort of limited access/storage seems odd. I may have 16 gigs of memory on my iPhone, but the music I can listen to on it becomes infinite when I launch my Pandora app."

The tone of the article is qualified optimism. He sees an increasing number of threats to music from other entertainment options, but business opportunities in subscription models for music which can offer the consumer what he wants: unlimited catalogues and instant gratification without the clutter of traditional ownership.

Music, however, has certain qualities that set it apart from other modes of entertainment, which Pollack fails to recognize. There is something essential about humans' relationship to music, and the fact that it can be a strictly aural in nature means it can be easily incorporated into other forms of entertainment. Television, movies and video games all routinely feature music. There are few examples of successful entertainment that don't feature music somehow, yet an entertainee will gladly listen to a song without any other forms of media to accompany it. In this respect music has the upper hand in the battle for consumers' attention.

These are still the early days of the internet (15 years is not such long time), and all media are fighting to get their product to the consumer and get him to pay for it. Distribution and monetization aren't just headaches for the music industry. Their huge advantage in this landscape is that they can both sell directly to the consumer and to other entertainers to incorporate in their products. This business to business model has way fewer land mines and much clearer path to profit. Optimism for the music industry might require qualification, but when you compare the music industry's position to other media industries, there is clearly reason for hope.

 

Enemy Soil Looks to Break New Ground

There is a hint of pain in Yan's voice as he describes giving up a hip-hop career to manage his more talented friends. Ryan "Yan" Donahue, Vincenzo "Vinnie Paz" Luvineri, and Kevin "DJ Stoupe" Baldwin grew up together in a working class suburb of Philadelphia. They spent their free time writing verses and recording make-shift hip hop records, but as Yan tells it, "It became clear to us that Vincenzo and Kevin were the best."

Jedi Mind Tricks released its first demo while the three friends were still in high school in 1996, and they achieved success gradually: finding audiences in Europe and South America, and eventually landing two albums on the Billboard 200. Their 2006 release, Servants in Heaven, Kings in Hell, peaked at 131. All the while, Yan navigated the band through tours and a record contract with the New York independent record label Babygrande. In hindsight, the bands rise correlates perfectly with that of the internet, a force that made managing a band as much of a creative exercise as being in one.

When the groups’ contract with Babygrande expired last year, Yan realized the state of the record industry was such that he could either take the band in a new direction or risk going down with it. That's when the idea for Enemy Soil was born. Yan wanted to start a company that would look beyond the traditional business model that record labels clung to. "It’s an antiquated model." He says. "The market today empowers the artists. Its so inexpensive to record and put music out there, but it’s gotta be about more than record sales."

Enemy Soil is a record company that chafes at the designation. "I don't even like to use the term." Yan says. It’s a business that hopes to use Jedi Mind Trick’s experience building a committed fan base all over the world to help other bands do the same. That means thinking of records as promotional tools rather than products. It means touring incessantly, and building a personal relationship with an audience. "It’s that connection that makes fans want to buy t-shirts or concert tickets, to feel like they want to part with their hard earned dollars."  Yan argues the single minded focus of the mainstream record industry on re-monetizing recordings shows how unconcerned they are with the success of artists. Record sales were the bread and butter of record companies, but never have been for most musicians. "Merch and ticket sales were always the primary revenue streams and they still are today."

Donahue admits that file-sharing presents difficulties for bands trying to scrape by, but doesn’t believe it was necessarily easier when big record companies were able to throw their weight around. "If Jedi Mind Tricks had come around five years earlier, they would have gotten locked into a long record contract where they made a dollar a record, and where less fans heard their records." File-sharing actually helped the band, by spreading the word about the band, and opening new markets for them to tour. "Chances are we made more money because of the internet."

Its difficult to imagine other record executives admitting as much, but Donahue isn’t trying to follow their example. To survive in an environment with ever increasing entertainment options, he’s trying to leverage what is unique to music: its ability to foster shared experiences and empathy between two people. How to monetize something so ethereal is what keeps him up at night. But he believes in music fans, and trusts their passion and dedication will help artists survive the growing pains that are to come.

“It’s not too far from the business model that an organic farmer has,” he muses. “At the end of the day, people will pay for what is important to them.”