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Author Topic: Getting The Music Business Over The 'But We Must Sell Music' Hump  (Read 2992 times)
isthisthingon
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« on: December 09, 2009, 01:23:23 AM »

Well said: http://www.techdirt.com/articles/20091208/1052477252.shtml

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But, the reaction from the crowd on that question cemented for me one of the biggest reasons why some in the industry have struggled to grasp new business models. As I discussed in my NARM presentation a few months ago, selling music is just not a good business model, but it doesn't mean there aren't good, very profitable, music business models. It's just that selling music isn't a very good one. Instead, you need to learn to use the music (which still needs to be good, and is still the central reason why these other business models work) to sell something else -- something scarce, which can't easily be copied. That can be attention, access, time, creative ability, cool physical products, whatever. All of those things are made more valuable the more popular the music is, and you can build all sorts of powerful and immensely profitable businesses once you recognize that.

But if you still think that selling the music or making money directly from the music has to be at the "center" of any music business model, you're shutting yourself off to the largest opportunities out there. But, the thing is, music has always been a product that makes something else more valuable. While there was some disagreement on the panel from someone about how record stores were profitable in the 70s, that's a case where the music was making the vinyl (and later, plastic) more valuable. Today, it makes iPods more valuable. As the big box retailers know, it acts as a loss leader to bring people in to buy higher margin goods. Music is great at selling other, higher margin things. If you ignore that in the music business model, you're missing the big opportunity.

   Did someone say opportunity? 
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This isn't to downplay the importance of music, or say that the quality of music doesn't matter. It absolutely does. But the music is not the scarcity, and you don't make money off of selling something that's abundant. You use the abundance to figure out what other scarce goods it makes more valuable and you sell those. So, people can complain and shout all they want, but it doesn't change the basic fact that until you recognize that selling music directly just isn't a very good business model, you're limiting your market tremendously.
« Last Edit: December 09, 2009, 01:26:44 AM by isthisthingon » Logged

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perkiset
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« Reply #1 on: December 09, 2009, 09:37:47 AM »

The laughable thing to me, as a professional musician, is the thought that the guys I've worked with would be able to "figure out what the scare item is" and make money at THAT rather than the music they create. Although this is interesting academically, it completely avoids the notion that, if a person is a musician, and what they create is just music, then this essentially tells them that what they create is worth nothing except a lost leader.

So the "scarce" part must somehow be in the food service or home cleaning industries.

I'm intrigued to see what this guy would think that musicians, that worked through their life to become people that create music, should be doing instead to make money. It's easy to spout this stuff. He mentions things like live music, and that people focused on selling their music are missing the larger opportunity. What, exactly, might that be? And are there lots of job openings there? There's not THAT much room for side cats in the industry, and tours are not a cheap or easily done thing - especially if you are not already popular. So how do you become popular? You make lots of music, give it away, then try to get funding for a tour where you hope enough people will come to make you some money so that you can go make more music and give it away...?

No one ever said that selling music was a "good" business model. Many of the best things in life are not. I guess that's part of the point. Musicians are not programmers, or doctors. The skill and dedication it takes to be an artist AND make money at it are often not co-habital. Very often, the chaotic and crazy thought patterns that create the music we adore is incapable of executing business in the way we discuss it here.

To my way of thinking, we need to reevaluate the way we compensate value, rather than telling value creators that what they do should be given away for free. I think some of this discussion is completely backward: because people have discovered how to have music for free, musicians should be giving it away because if you can't beat 'em, join 'em. Perhaps the discussion should be, why is it that we as a country are so focused on how we should change the "music model" rather than celebrating art and artisans?

As you can probably tell, I have as much baggage on this side of the issue as you do Wink
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« Reply #2 on: December 09, 2009, 11:49:20 AM »

A friend of ours likes to say "You can keep the fame, I'm just after the fortune."

I tend to do a lot of things simply because I want a large number of people to know my name. What does Richard Stallman sell, commercially? How about Kevin Mitnick? Heck, Mitnick doesn't even have enviable skills, but because he's got such huge name recognition, he makes a very good living for himself. When I make better music of which I'm really proud, I'll certainly give it away. If I want to be famous as a musician or as a hacker, I've never planned to make my living by what I sell, but instead by who pays me to come speak, or represent their product, or just shake hands and kiss babies. Popstars and professional athletes are two categories of people who are just utterly overvalued in our system.
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isthisthingon
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« Reply #3 on: December 09, 2009, 03:33:29 PM »

> I’ll give you 50 bucks for it.
>> 50 bucks? No, no, no… this is a Rochefoucault. The thinnest water resistant watch in the world. Singularly unique, sculptured in design, hand crafted in Switzerland, and water resistant to three atmospheres… This is THE sports watch of the 80s. $6,955 retail.
> You got a receipt?
>> No… Look… it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome and Schdadt…
> Yeah? Well, in Philadelphia its worth 50 bucks…
>> Just give me the money.

@pop stars and athletes - totally agree.  But my view is they're not simply overvalued.  It's that their "value" has been coupled with scarcity-based distribution methods with profit curves hitting the stratosphere when near global interest in some commodity, such as the Backstreet Boys, causes billions of people to overpay for access to it.  Part of the problem is associating "value" with profits in general. 

Like actors, movie celebrities and even politicians, their misunderstood, inflated value we've been accustomed to assigning to them is the deeper conceptual problem.  When people realize this it threatens to challenge our basic beliefs in capitalism should we take a more accurate, and realistic inventory of what value is really made of. 

@compensation based on value?  In capitalism, scarcity is value.  True value is a subjective concept that capitalism uses as a smokescreen to validate its scarcity-based model.  Watching new money fight with old to secure their preferred playgrounds of scarcity is even more whacked 
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« Reply #4 on: December 09, 2009, 03:42:37 PM »

>their "value" has been coupled with scarcity-based distribution methods

Hollywood is "headed for the same meat grinder that has chewed up the recorded music sector and print publishing. What will come out the other side is still uncertain but will likely be much smaller."

http://news.cnet.com/8301-31001_3-10378654-261.html?part=rss&subj=news&tag=2547-1_3-0-20
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perkiset
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« Reply #5 on: December 09, 2009, 03:44:02 PM »

I tend to do a lot of things simply because I want a large number of people to know my name. What does Richard Stallman sell, commercially? How about Kevin Mitnick? Heck, Mitnick doesn't even have enviable skills, but because he's got such huge name recognition, he makes a very good living for himself. When I make better music of which I'm really proud, I'll certainly give it away. If I want to be famous as a musician or as a hacker, I've never planned to make my living by what I sell, but instead by who pays me to come speak, or represent their product, or just shake hands and kiss babies. Popstars and professional athletes are two categories of people who are just utterly overvalued in our system.

That's all great for you VS, but for the legions of people that have worked hard, gone to school, paid dues in blood sweat and tears ( Wink ) what they want to do is create art, and sell it. No different than any other artist, except that technology has changed how people can consume it.

Or enjoy it without compensating the creator.

IMO, the whole notion that "music should just be given away" is a rationalization for the fact that we want to be entertained, we don't like paying for it, we dont HAVE to pay for it anymore because we know how to steal it, so we devise a new business model to pacify those nagging feelings of theft.

I'd wager that there's not a soul on this board that would be fine with grabbing a painter's work, perhaps while they're not looking, and put it up in their house. Then create a new business model around how the painter should give away their work, so that they get a big name and can get other work painting houses or something.

The whole thing is upside down to me. I'm not saying that it's wrong to give away music or your work - in fact, I find that of the noblest cut. But for us to be OK with taking artists work when that's how they make money and much more importantly, we enjoy feelings, entertainment etc because of their good work. We are enjoying something because of them. People fix a computer for me, they should be paid for their value. People consult how to rebuild my backyard, they should be compensated. People entertain me and change my mood because of their art, they deserve to be compensated.

Just how I feel about it, right or wrong, that's me.
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« Reply #6 on: December 09, 2009, 04:10:45 PM »

Really simple question, how did musicians make $$$$ before records and radio ?
The first phonographs where not invented for the intention of making commercial recorded music.

And when the first commercial record was made, the band was paid $50 for their time.
The reason why edison made commercial music was not to "sell records" but to sell record players.

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isthisthingon
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« Reply #7 on: December 09, 2009, 05:38:31 PM »

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That's all great for you VS, but for the legions of people that have worked hard, gone to school, paid dues in blood sweat and tears ( Wink ) what they want to do is create art, and sell it. No different than any other artist, except that technology has changed how people can consume it.

This is one of the sad parts of the disillusionment story were playing out.  Instead of educating people about the new realities that fundamentally change what's possible, practical and viable in terms of career planning, we dig our heels in and try to legislate the impossible.  It's a really hot button for many reasons.

Music is now about as packagable as waves at the beach.  Wealthy home owners with beachfront property believe they own the waves.  Since they cannot effectively package them for resale, they have the surfers who drift onto their "property" arrested for trespassing, unless they arrange payment for this access - which hardly happens since who wants to pay for what's free a mile down the road? 

In the macroeconomic context, music and waves are infinite and eternal.  The grumpy and frustrated wave "owner" has a neighbor named Bob who happily takes advantage of this blend of infinite and scarce, while providing a great service in the process.  Needless to say, his beachfront cafe with unlimited free wave access is just booming  ROFLMAO

The "value" of music?  The ocean??  Infinite.  Totally and completely infinite.  You can't put a price on the emotions evoked and memories created.  However you CAN put a price on hot dogs and beer, since these are things that belong together in the same "value" universe as our scarcity based economy.  Forcing art into some artificial value-tie with money is such a distasteful practice.  It devalues the very thing it claims to defend 
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vsloathe
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« Reply #8 on: December 10, 2009, 02:13:46 PM »

Precisely.

And the question for me has never been "should you be paid for your work/art?", but rather "should you be paid in perpetuity for your work/art?"

The rest, I could not summarize more succinctly or eloquently than ITTO.
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« Reply #9 on: December 10, 2009, 04:07:05 PM »

"Paid in perpetuity?" What do you mean by that? That there's a fixed amount of time that an artist should receive money when his work is sold to another person, and after that, what?

Please tell me: other than making music that is sold, or being paid to contribute to music that is being sold (for public consumption or movies or whatever) or performing live, how would you propose that musicians should become entrepreneurs and rethink how they make money? There will be those that pull something off, but realistically asking musicians as a whole to rethink how they make money - because we've figured out that we don't like paying them for their work, is just bizarre to me. And frankly, utterly unrealistic.

Good musicians exist because they can survive (literally, like eat, shelter etc) and hone their skill. Express themselves. Become one with their instruments of choice. How do you suggest that they do this, while simultaneously figuring out yet another unique way to sell something of themselves that is "more scarce" and make a reasonable living? This is a vaguely interesting discussion academically, "yeah -  musicians should..." but it does not connect to the real world for me.
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« Reply #10 on: December 11, 2009, 09:17:01 AM »

Sponsorships. Make them sell their souls like all the rest of us have to.


And I mean by "not in perpetuity"; Allow me to buy an album, and then I own it. I'm allowed to loan it to friends, play it at a party for the listening pleasure of those around me, rip it to an MP3 format and share it with someone else. Scarcity should not be artificially created just for the welfare of artists. They provide so much value to me that I am willing to more seriously consider purchasing a product if they will endorse it (concomitant to solid monetary compensation on the part of the product vendor, of course). How's that grab you?
« Last Edit: December 11, 2009, 09:20:27 AM by vsloathe » Logged

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