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Music, Entertainment, Arts Business Blog 

The Suits will inherit the Earth, or History will teach us nothing.

Ben O'Hara - Friday, February 03, 2012

I have been reading Bobby Owsinski’s book ‘Music 3.0 A Survival Guide for Making Music in the Internet Age‘ It’s an interesting read.

He presents an interesting contention in the 1st few chapters.  In summary he suggests that the music industry has entered into 5 distinct phases.

Music 1.0 – 1950’s to mid 1980’s.  ‘It’s all about the MUSIC’. 

Owsinski suggests that this golden era for music saw record companies created by music fans who were discovering great music and finding ways to get that music to consumers – other music fans.  The industry was run by fans of music – for fans of music… until the suits take over.

Music 1.5 Mid 1980’s – CD’s and reselling the back catalogue.  The suits take over

Eventually, the bigger record labels were born, and all of the little indi labels get swallowed up by bigger ones.  There are still music fans at the heart of these bigger companies, but they are fans that realize that this rock music thing is more than a passing fad – it’s a business where you can make plenty of money.  As people re-buy on CD all of the stuff they had already bought on vinyl, the cash is just rolling in.  Big Artists make big profits for the big companies.  We end up with just a handful of major companies and they are owned by even bigger companies.  The TIME/Warner’s the Vivendi’s who have no idea about music.  It’s just another profit source for them.

Music 2.0 – The Digital Age – 1990’s.
Peer to Peer networks, file sharing, CD burning and so on.  The fans take control of the music once again.  ‘I want all the music I can get my hands on, I don’t want to pay for it and I don’t need too. ‘  Every fan of file sharing or of obtaining music illegally will at some point say in their defense one of the following statements:

  1. I was sick of paying for whole albums when all I really wanted was a couple of songs
  2. I buy lots of music anyway, I use online to find what I might buy later
  3. I don’t want to give my money to rich artists and even richer record companies.
  4. I only access stuff I can’t get anywhere else anyway.

It’s a golden era for consumers.  Free music…until the suits take over…

Music 2.5 – Digital Music is Monetized 2000’s

Apple iTunes and others realize that there is money to be made from online music.  They just need an interface that is better than the file sharing options, deals with the majors and indi’s to access their music and a price that competes with free.  So while iTunes doesn’t replace free music it does make a dent in it and it does replace the CD store.  iTunes, Amazon, Online Radio, The new Napster, Virgin all have a go at making big profits from online music.  What was once the domain of the fans is now a profit making machine for the big corporations.  This time the record companies miss out – it’s the technology companies that are controlling things.

Music 3.0 Artist/Fan Communication – 2006 onwards

Owsinski reckons that now is truly the golden era for musicians.  This is the era where musicians no longer needing the big companies.  We can of course finally communicate directly with fans via MySpace, Facebook, Twitter and so.  We can now cut out the middleman.  Owsinski reckons it will just keep getting better as well.  The technologies will continue to improve and there will once again be a golden era where the music really counts.

I think he is missing a pattern here.  ‘UNTIL THE SUITS TAKE OVER.’  History has shown us that true music fans and the musicians themselves drive the advances and changes but eventually the suits will take over.  If there is real money to be made, big business will eventually devise a system that they can control, where they can make the lion share of profits and they can funnel creator to consumer communication, to ensure big profits to them.

It might not happen right away, but there is no doubt in my mind that it will happen.  Sometime in the next 10 years, a better system for communicating and getting money from fans will come along, access to that system will be limited to the chosen few and the profits will end up back in the pockets of big business.  I hate to sound pessimistic about this – but it’s what’s going to happen.  History has shown this to be true.

I am not saying that you may as well give up on direct to fan communication.  Not at all, I think it is the key for the moment.  Just be aware that there will come a point where it is no longer a level playing field.  


Ben O'Hara

The 2011 AMPAL Event in Melbourne - AMPAL Presents BEHIND THE MUSIC

Ben O'Hara - Tuesday, May 10, 2011

AMPAL Presents BEHIND THE MUSIC

 

 

May 23rd, AMPAL (the Australian Music Publisher's Association) will be hosting a panel and music night at the Evelyn Hotel on Brunswick St, Fitzroy. The aim of the night is to provide local musicians, songwriters and music enthusiasts with some insight into the future of music through an expert panel discussion, made up of musicians and industry players. The panel will be answering questions and musing about the changing state of the music industry. If you are an aspiring musician wanting to get a break, or a hopeful industry professional seeking inside information you can't miss this exclusive event.

 

Panelists include Adalita (of Magic Dirt fame), Ian James (Mushroom Music Publishing), David Vodicka (Media Arts Lawyers/Rubber Records), Natalie Bell (Milefire Management), and Marianna Annas (ABC Music Publishing).

 

Adalita, currently touring nationally with her debut self-titled album, will be performing exclusively at the end of the evening's panel.

 

Tickets available from greentix.com.au, $10 presale, $12 at the door. Seating is very limited. Book now.

Music Fans Vs Popular Culture Fans

Ben O'Hara - Sunday, April 10, 2011

Music Fans Verses Pop Culture Fans

I know that everyone has had a say about Rebecca Black in the past week or two (I am not even going to link to the video here) but I thought it timely to remember that Rebecca Black doesn’t really have anything to do with music or the music industry.

A lot has been written about Black’s ‘Friday’ video, (for the record I reckon I have seen and heard much worse – try 95% of the demo’s that come across my desk!) Much of what has been written looks at Black as if we are seeing something new in terms of the music industry.  We have always had Rebecca Blacks’ (remember the Crazy Frog?) and they will always get noticed some how – but it is nothing to do with music.

It is a popular culture fad.  She will come and go fast enough, unless she does something outrageous or exhibits a hidden talent that is not apparent on ‘Friday’.  It’s no big deal.  There is no difference between Black and the ‘Dancing Baby’ YouTube video, or ‘Charley bit my finger’ or countless others.  (YouTube them if you don’t know what I mean.) They are just unusual moments that get traction for some unknown reason, they become the must see moment of the week.  Big deal.  Nothing to do with music at all.

There are a lot of commentators who get stuck on this point.  I think that there are really two types of fans out there.  Music fans and Popular culture fans.  The music fans are serious about music; they listen to it, buy it and connect with music because they have to.  The music is what they are all about and they can’t live without it.  It is important to them.

The 2nd type of fan is the popular culture fan.  These people connect with music because music provides important touchstone moments in their lives…but they could live without it.  They might buy music from time to time, but they are more likely to buy music that is hot at the time, they won’t seek out an artists back catalogue or snap up everything that artist has touched.

I am not trying to belittle the pop cultures fans music experience, it might be important to them, but nothing like it is for a music fan. 

The problem for the music industry is that the pop culture fans heavily out number the music fans.  Horribly so.  The Music fan is also more likely to be a collector.  Their CD collection means something to them.  The CD and it’s artwork are important, something to have and cherish.  Pop culture fans are more likely to find the illegal download because it is about experiencing that touchstone moment, not collecting.

For years now I have see groups of students express this frustration with music not being as important to the rest of the world as it is to them.  They take a superior view that suggests that the pop culture fan is below the music fan and that it is some sort of right that ‘serious’ music (what ever that is) be taken seriously.  This gives them a license to dismiss anything that they see as not ‘serious’ music, stuff like Blank’s Friday video is reviewed and viewed as if it is competing for a place in their converted and carefully curated CD collections.  Of course in reality, it’s not.  It’s just a touchstone moment in 2011 culture that will be fondly remembered by a handful and completely forgotten by everyone else.

So let’s not worry about Rebecca Black – it’s as relevant to music as the yoyo craze that sweeps through school every few years.  Nothing to it.

Ben O’Hara

Rick Springfield is a Marketing Genius

Info Info - Wednesday, January 12, 2011

Rick Springfield is Marketing Genius

 

Remember Rick Springfield?   Probably not, right. Think 1982 and Jessie’s Girl, still struggling?  Well it turns out that his fans remember him.  Rick is working on the Nine Inch Nail’s model of connecting with fans + reason to buy = $$$ (Look up Michael Masnick’s talk here if you don’t know what I am talking about.)


Rick is so good at it he has made a documentary about his fans love for him and his love for his fans.  View the trailer here - 
http://rickspringfielddoc.com/


Talk about connecting with your fans.  Personally my favourite bit was “he can do whatever he wants to Jessie’s Girl, just so long as he keeps his damm hands off my wife.”

 

Rick’s site is amazing, www.rickspringfieldmerch.com the amount of merch on there is huge and he sells premium stuff, auto graphed albums and guitars, premium packing of CD’s and special concert tickets that include attending the sound check and meet and greets before and after the show.  Even better than all of that – why not join Rick on a Rick Springfield themed cruise?  Travel the seven seas’s, and explore new places all with Rick Springfield and his band playing all the way through. 

 

Check out the video from last years cruise.

http://www.rickspringfieldcruise.com/multimedia.html

 

What’s the lesson in all of this for you?

This guy is a bona fide Rockstar and you can get this close to him.  He loves the fans and he gives a lot to them.  He truly connects with the fans and gives them a reason to buy.  (Good luck downloading a cruise on the internet)  He is giving the fans a true Rick Springfield experience.  All bands can learn from this – updating your Facebook and sitting at the merch table after the gig is not connecting with fans.  I not saying that taking them on a cruise is, Springfield has workout that most of his fans are 35 to 45 year old women who remember having a crush on him 30 odd years ago.  You have to workout what your fans connect with you for…and meet them there.

How to: Copyright Symbol

Mark Beard - Friday, December 03, 2010

How to use the Copyright Symbol in music

The symbols © and (P)

The © symbol that you may find on most CDs is not required by the Australian Copyright Act for copyright protection to be applied. It simply serves as a warning to others that the work is copyright-protected.

The symbol ( P) is required by the Rome Convention to indicate the owner of the copyright in the sound recording. (the ‘p’ stands for ‘phonograph’, an old word for a sound recording). So what is the most acceptable way in which to use these symbols?

ARIA, the Australian Record Industry Association, suggests the following standards; however, on close inspection of CD covers you will see that a variety of applications are used. The use of these symbols on many records is purely the result of guesswork.
 
As a guide, ARIA suggests that the owners of the copyright in the music and lyrics be identified with the symbol © .

© = THE OWNER OF THE MUSIC AND LYRICS
 
This will usually be the songwriter(s) who wrote the music and lyrics or the current owner of the copyright (such as a music publisher) if the original owner(s) have assigned or licensed the works to the new owner or controller of the copyright.
 
ARIA suggests the (P) appears with the name of the owner of the sound recording followed by the year that the sound recording was first published.

(P) = THE OWNER OF THE SOUND RECORDING [YEAR OF FIRST PUBLICATION/RELEASE]

The owner of the copyright in the sound recording will generally be the person who paid for the sound recording.

Your music is your marketing

Info Info - Tuesday, August 31, 2010

Think about this. For the independent musician, the music you make is essentially your advertising. The product that you are trying to sell is yourself as the artist. You are trying to get consumers to buy into you as an artist, come to shows, buy a t-shirt and buy the premium package of your music, whatever. The music is just an ad to get consumers to buy in.

Think about what could happen to your outlook on the music industry if you started to think of the music itself as just an advertising message. Would you charge people to listen to or watch an ad? No way, you want to make it as easy as possible for people to see your ads and to be affected by them. Better still, you want people to talk about your ads and to share them with one another. Your ad can go viral if enough people like it, share it and make it part of their Facebook profile. Your ad helps them define who they are – now that’s a buy in!

Music videos have always been ads for the single, but did you know that in the 60s the single was really just an ad for the album. The Beatles certainly thought that way; they always saw the album as the main game. Having number one singles is just a great way to get people to buy your album and then buy into you as an artist. Artists and record companies will always rather sell albums than singles. Traditionally the single was sold just above cost price but its main aim was to get you to buy more great songs just like this one...on the album. Remember the “Cassingle” (A cassette single that contained 2 or 3 songs) It was a disposable item, sold very cheap so you could take that favorite song with you anywhere you wanted. But if you didn’t want to have to change the tape every 5 minutes…you had to buy the album.

When you think of the music as an ad for the artist you have to question the wisdom of doing anything that gets in the way of getting that advertising message to the masses. Charging for music seems crazy.

Get the music everywhere that it can be seen or heard (like any marketing message) give it away at gigs or on MySpace or via file sharing sites, wherever you can. Hope that your adverting makes an emotional connection with the listener. If it does you will have the opportunity to try to turn them into fans. Why do anything to stop your main advertising message get to the masses?


Ben O'Hara

The Dawn of the Independant Musician

Info Info - Friday, August 20, 2010

2005 was the dawn of the new music industry. The old industry was a world where the corporate fat cats finally got so greedy that they actually started to devour themselves, but that left a space for everyone else. I think great music is finally back and the music industry is re-discovering its soul. All thanks to the independent musician.

For me, 2005 was the moment when I realised that it was no longer possible to keep track of every great new band that was out there. I used to be able to ask 18 or 19 year olds, ‘so what kind of music are you into’ and I would know every band that they listed. In 2005 the answer to that question just got so ‘far out there’ that nobody could keep track. ‘I’m totally into this Industrial/Grind Core German metal band; they don’t have a record label and have never toured outside of Germany. They only have 112 fans on MySpace so far, but I am the most passionate of all their fans. I have every T-Shirt and I made a video clip for them, which is being played on German community television.’ WHAT?

It’s not the 1st time in history that this has happened. The original music business of the 1950’ and 1960’s was all about people power. Record Labels and Radio started playing rock n’ roll due to overwhelming demand from fans wanting to discover new music. The labels didn’t really care about rock music but the fans did and the Baby-Boomer kids had money. The Baby-Boomers actively sought new music but with limited communication options they relied on the corner stones of the record label, the radio and the retailer to help them find it. Those 3 became the ‘taste makers’ telling the consumer that they knew what was good music and what was not. They supposedly filtered out the bad music and let consumers access the good stuff.

Here is where it all started to go down hill, the labels worked out that it was not about the music at all, it was about having ‘hits’. If you are going to sell something, it is much more profitable to sell lots of one product than lots of different products. The filter got narrower and narrower. The definition of ‘good music’ really became ‘most popular’ or the ‘highest selling music.’ The 80’s were really full of this kind of thinking. The easiest to digest music was the most popular and niche music got pushed out of the way.

Somewhere around 1994-95 file sharing and Napster suddenly took hold. The filter was off for the 1st time. While most of the music that was shared was still the super popular stuff, there was plenty of obscure, niche stuff available. All those previously unrealised tracks (unreleased because the record company thought they were not “commercial enough”) were suddenly available to anyone with a home computer, anywhere in the world. In a way the record companies tried to jump on-board, digital music stores (like Apple’s iTunes) offered legal paid for downloads, but the filter was still there. You could only buy what the companies made available and only in the territory where you held a credit card. All in all, not enough freedom and not enough niche music was made available. The independent musician was left out.

Then in 2005, MySpace really took hold. The music maker could interact directly with the fan. No filter at all. Any band, any fan, anywhere in the world. The filter providers (the record label, the radio/TV stations, the retailers) become completely irrelevant. This changes everything and levels out the playing field for everyone. Now in 2010 it’s all about good music again. It’s not about getting a stack of record company cash behind you or getting main stream radio airplay. It’s about getting fans to talk to you directly. No more excuses. Just make great music, get it out there (you know all of the ways you can do that) and start building a stack of fans.

I think that history will look back on 2005 to 2010 as the beginning of the next phase of the music industry. The Dawn of the Independent Musician.


Ben O’Hara

How much do I charge for...

Info Info - Thursday, August 05, 2010

On an almost daily basis, we are asked by a musician or composer or a manager one of the toughest questions to answer. ‘How much do I charge for…a gig…a song in a film…a song in an ad…to have my lyrics on a T-Shirt’ and a thousand other money making ventures in the music industry.

It’s a tough question to know how to answer; it’s really a ‘how long is a piece of string’ type of questions. There are as many different answers as there are bands and artists out there. Plus, unknown and struggling bands are always excited by the idea that someone might want to pay them anything at all. They get used to working for free or even paying to play. The idea that you might find some way to promote your music AND get paid at the same time, is an exciting prospect for many bands.

So, I thought this week I would share a couple of tips that are helpful to apply when trying to set your price.

  1. The key is really finding a price that you would feel happy to work for. If you were to walk away with $100 from the deal, would that make you happy or would that make you mad.

  2. Find the middle ground between feeling like you are getting ripped off verses feeling like you are getting paid well beyond what you were expecting. That middle ground is where you should really be aiming.

  3. Think about how much work will be involved for you in making the work happen. Can you break that down into an hourly amount? Work out how much per hour you would be happy to work for. (say $25 per hour) You know the work is going to take 10 hours (they want you to write a song for their short film) so, $25 x 10 hours = $250. Is that a fair price?

  4. Practice common negotiation skills like putting yourself in the other person’s shoes. If your price is completely over the top, they won’t do a deal with you this time, or anytime in the future.

  5. Value what you do. If you don’t, nobody else will either. If you give it away for nothing you need to have a way to convert that nothing into something. Bands might give away a demo CD in the hope that more people will come to their live shows. You can apply that principle in any deal that you do.

  6. Weigh up the opportunity, is it really the opportunity that you think it is? What are the down sides verses the up sides

Does it always have to be a one off payment? You may be able to negotiate some kind of ‘verses deal’. The idea is you get a set amount for providing your service (say $500 for the gig) but if the use is more successful than 1st planned, you reserve the right to collect a larger share of the income, or renegotiate the deal. (say if 50 people show up to the gig you get your $500 plus $5 per person beyond the 50 person mark.) This works in film and other uses. It is sometimes referred to as a ‘backend payment’ (more about this in future blogs.)

For me, I don’t think that it is about winning or losing the negotiation. It is just about finding that middle ground. If you really want to opportunity to happen, you will be prepared to give up more. If you don’t mind if the opportunity goes ahead or not, you may be prepared to give up less.

Final tip – It is rare that you only get one opportunity in life. If the band is good, or the music is good things will happen. So saying no or valuing your music highly is not to say that you will never get opportunities. But the flip side of that is also true, be a diva and say no too often, eventually people will stop bothering to ask.

So, how much do you charge? It’s up to you. But use the tips above to try to find some kind of balance.

Tax deducations and musicians

Mark Beard - Monday, July 26, 2010

It's tax time again... time to complete those tax returns and collect a refund?

Maintaining financial records

The ATO (Australian Taxation Office) requires both individual employees and businesses to keep source document evidence of economic activity. The reason being that expense transactions are used both by individuals and businesses to reduce taxable income, so naturally the ATO requires available evidence of the transaction and thus the deduction.

In the case of work-related expenses for individuals the ATO states:

"You must have written evidence to prove your claims if your total claims exceed $300. The records you keep must prove the total amount, not just the amount over $300. The $300 limit does not apply to claims for car, meal allowance, award transport payments allowance and travel allowance expenses. There are special written evidence rules for these claims." Source: www.ato.gov.au

In the case of records for businesses (including companies, sole-traders and partnerships) the ATO states:

"By law, you must keep business records for five years after they are prepared, obtained or the transactions completed, whichever occurs latest. In addition the records must be in English or in a form that we can access and understand in order to work out the amount of tax you are liable to pay."
Source: www.ato.gov.au

Are you a special professional?

Did you you know that as a Australian resident (for tax purposes) and a special professional you may be eligible for what the Australia Taxation Office (ATO) calls "Income averaging for special professionals"?

The ATO states:

"You are a special professional if you use intellectual, artistic, musical, physical or other personal skills in the presence of an audience or you perform or appear in a film, on a tape or disc, or in a television or radio broadcast." Source: www.ato.gov.au

Essentially, income averaging is what is called a "concessional tax treatment" and may provide "special professionals" the ability to "spread" their income over a number of years and possibly save on tax.

For more information consult your accountant, tax adviser or downloaded the ATO information sheet via:

http://www.ato.gov.au/individuals/content.asp?doc=/content/00237923.htm&pc=001/002/010/007/002&mnu=37095&mfp=001/002&st=&cy=1

Sources of Finance for Bands

Info Info - Monday, July 05, 2010

We often get asked questions relating to bands and artists finding financial backers for recording or other projects. In this week’s blog, I thought it would be worth-while to review the different types of backing available and give some band related examples. Read on for more information.

Debt finance
The reality is that not very many entrepreneurs (especially in the music industry) are able to secure debt finance, especially from the banks. The music industry is anything but a certainty when it comes to success. The music industry struggles to convince banks and other debt financers that a business idea is a sure thing, especially in the startup phase. It does happen from time to time, but not very often.

Equity finance
These sources of finance are far more common in the music industry; in fact, they are far more common for new business in general. There are a number of sources, so we will consider them individually.

Own funds
The first avenue to consider is your own funds, I know it sounds obvious but why would anyone else want to invest in you and your music if you are not prepared to put your own money on the line. Don’t look for investors to help you buy an instrument or get lessons. If you can’t get that stuff together for yourself – forget it! These may be savings, assets or investments that can be converted into cash.

Credit
If you juggle things just right, you may be able to get the business started with this revolving door of credit from your suppliers and creditors. It is hard to manage, however, and if one step goes wrong it can leave you unable to pay your bills. This is a high risk strategy! Use this method at your own risk!

FF&F (family, fools and friends)
This unfortunate name refers to that group of people who you know on a personal level and who may be enticed into financially backing your band. FF&F could be referred to as an informal source of finance, and they may even provide finance without the desire to hold equity in the business. (Those cases are extremely rare, however; it is not often that even family, fools or friends will give something for absolutely nothing in return.) They can only usually be relied on for start-up funds. So, even if you have a rich uncle who is willing to help you, you will still need to convince him that his investment is worthwhile. (How do you think he got rich in the first place? By making wise investments, most likely.) There are countless cases like this in the music industry, country artist Gina Jefferies for example.

Internal capital networks
These are networks that are often culturally based — that is, a group of people who share a culture of some sort and who are willing to help out others who share that same culture. A local religious group or cultural society are typical examples. I saw a recent example of a Christian band who were able to source a huge amount of money from an internal network to make their album. The network felt strongly that the band was talented enough and that the community would benefit from the making of the album.

Angel financers
Angel financers tend to be individuals with a high net worth who are interested in assisting business entrepreneurs. The ideal angel financer is someone who will give you all the funds you need (and more) and will believe in you enough to stay out of the way and let you run the business. It rarely happens that way; they are more likely to take an interest in how the business is run. Angel financers will invariably demand a level of equity of the business for their efforts.
The record company is really a good example of this (although they tend to be fairly hands on when it comes to making the music.) However there are still those occasional financers out there who want to feel cool and have some involvement in the music industry. Unfortunately these ‘too good to be true’ offers usually turn out to be just that. The investor usually can’t help but try to get too involved, they have no experience but they want to manage and be the record company and everything else along the way. It usually ends in tears!

Venture capitalists
Here are a few interesting facts about angel financers:
Statistically, they are most likely to fund business amounts of $50,000 to •$150,000, but occasionally invest more (up to $1 million).
They expect returns of 3–5 times their investment within 2–5 years.
They tend to be middle-aged males with business or professional backgrounds, often with their own entrepreneurial experience.
They are hard to find and usually do not promote the fact that they are willing investors.
(Source: Peter Balan, Centre for Development of Entrepreneurs, University of South Australia)

Getting money to get things happening is one of the major challenges for unknown acts. It is a vicious circle of needing to work to stay alive but needing to put more time into the music career to be able to give up work. I can recall having a conversation with Joe Hanson the bass player from Grinspoon about this topic just before Grinspoon really made it big. He was seriously thinking of leaving the band to concentrate on making some money. Thankfully he hung in there and the band has done well ever since.


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