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Where Is The Loyalty Program in the Music Business?

Why is that bands have no idea who their fans are? They are clueless.

Today, we live in a world of loyalty schemes. If you shop at any major retailer there is a pretty good chance that you have signed up to their loyalty scheme and after you spend a certain amount of dollars with them, you get a discount or some other reward for your next purchase. Some of the loyalty schemes (especially around gaming) invite the most loyal and regular customers into the store for a two-hour huge sales event that is especially designed for these types of customers.

So why isn’t this happening in the music business.

Let’s start with the live business.

Why is that the regular customers of the artists are not courted and rewarded. These are the people who purchase the super deluxe packaging. These are the people who purchase meet and greets on a regular basis.

For some reason these people cannot be given discount tickets to the shows or given an extra ticket to bring a friend who might not otherwise choose to attend.

A regular customer/fan is much more valuable than an inactive one.

However artists are clueless to these people as they have always relied on the labels to promote them and bring fans in. In addition, the recorded business has always relied on the transactions to take place between intermediaries.

Therefore, the data sits with these sellers. No wonder the recording business is in a state of flux.

Let’s use Dream Theater and Avenged Sevenfold as an example (solely because they had Super Deluxe packs selling for over $100).

For example, iTunes and Amazon would have the data on the fans that purchased their new album, along with a history of other purchases.

I would assume that Roadrunner would have the data on the fans that purchased the Super Deluxe packages from Dream Theater and Warner Bros would have the data on the fans that purchased the Treasure box from Avenged Sevenfold.

Live Nation or Ticketmaster/Ticketec would have the data on the fans that purchased tickets to the live shows.

Spotify and Pandora have the data on which fans streamed the new album and which fans continually stream Dream Theater And Avenged Sevenfold songs.

Musicmetrics put out reports that show various internet behaviours of fans for a lot of bands especially around BitTorrents.

Soundscan shows the units moved in relation to sales.

YouTube has view count metrics.

Now, imagine if Dream Theater or Avenged Sevenfold had the above information. Would they know what to do with it? Imagine if they had all that information and they see a trend of certain fans appearing as buyers of music and tickets. Those same fans are constantly streaming their songs. Those same fans are always appearing on Facebook and Twitter. Those same fans are buying merchandise from the bands own web store.

It is those fans that need to be rewarded. They are a bands best asset.

A lot of the independent bands are collating stats like these. Protest The Hero recently rewarded fans that got other fans to contribute to their funding campaign with additional perks and free passes into live concerts.

Why can’t the label backed bands reward their loyal customers? Everything is full price when it comes to music.

In relation to the live show, once upon a time everyone could attend as ticket prices where low. Then society started changing and suddenly a new market started to appear that charged a higher fee for a Section A pass and less for a Section B. So of course, a battle started for the best seats.

Then people who didn’t generally like rock music wanted to say that they went to the next Rolling Stones concert or the next Kiss show or the next Bon Jovi show and claim that they had front row seats.

Then Section A passes started to be tiered, with names like Platinum, Gold, Silver and Bronze. Each tier came with a ridiculous price tag.

The hard-core fans started to dig even deeper.

To prove my point, I have a banker friend who has seen Bon Jovi once and paid $1200 for the Platinum ticket a few years back.

I have a work colleague who has seen Bon Jovi over 40 times in various parts of the world. She even planned her US trip to take in cities that Bon Jovi was playing at and got tickets to all of the shows along with meet and greets.

I have seen Bon Jovi on two occasions and I am taking my family to see the band in 10 days’ time in Sydney. That makes it 3 for me.

So the banker friend has outlayed $1200 for a Platinum ticket. He is not going to watch the current show because he has seen Bon Jovi once and it was cool to say that he has seen Bon Jovi in his lifetime.

The crazed work colleague has outlayed over $20,000 on Bon Jovi tickets, purchasing various meet and greets around the world. That same work colleague purchased Bronze tickets for the upcoming Sydney show. She is back again.

Me personally, I have outlayed close to $1400 on tickets to three concerts. The current Sydney tickets cost me $1100 for 4.

So has the band rewarded my work colleague. She is one of many fans that are super loyal to the band and yet they still have to queue up online and fight for premium tickets, only to find out that only a small amount got allocated to the selling agency and the rest are given to the secondary market. Where is the bands loyalty to these kind of fans?

In general where is the loyalty at all.

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Uncategorized

Greed Will Kill The Streaming Star

I mentioned in an earlier post how the greed from the major record labels could end up killing streaming services. Since then, Swedish musicians are threatening to sue major labels Universal Music and Warner Music over streaming royalties. This is following a similar pattern from the lawsuits against the labels over iTunes sales and how those sales got paid back to the artists as royalties. Artists like Whitesnake, Def Leppard, Don Henley and Eminem led the way.

Even Billy Bragg stated the same via his Facebook account;
“These artists have identified that the problem lies with the major record labels rather than the streaming service and are taking action to get royalty rates that better reflect the costs involved in digital production and distribution. UK artists would be smart to follow suit.”

The major labels operate with a digital (streaming and mp3 sales) business model that is rooted in the past. The majors still pay a less than 10% royalty rate to artists for digital income. The 10% average rate is based on the age when the record companies produced a physical product like vinyl or CD, stored it in a warehouse and then transported that product to a brick and mortar store. Of course at that time all of these steps in the process where accounted for.

However in the digital age, there is no need to even produce a physical product like vinyl or CD however the labels are still short-changing their artists. If the streaming rates paid to the labels were so bad, trust me, the majors and the RIAA would be the first ones screaming theft. By being silent on the matter means that the majors are making real good money from streaming.

Spotify pays 70% of its revenues to music rights holders. By the end of 2013, they expect that those payments will exceed $500m. How much of that money gets passed on to musicians depends on the terms of their contracts with labels. Maybe the RIAA should be lobbying hard to get a bill passed where streaming is seen as a license and seventy percent goes to the artist. But we will never see that, as the RIAA is there to protect the record labels, not the artists. However they claim in their rhetoric that they are working on behalf of the artist.

From a metal perspective, Century Media Records pulled their music from Spotify in August 2011, citing that physical sales have dropped drastically in all countries where Spotify is active. Then in July 2012, they opted back in. By February 2013, they released a Spotify app. What a turnabout by the label? Metal Blade pulled music of Spotify in September due to no real agreement in place.

If you are on a major label roster you should have followed the Def Leppard route. Due to disagreements they were having on the digital payment terms with their label, they then refused to let their label put their catalogue on digital services.
However, then in order to cash in on the Rock Of Ages movie and the sudden interest in “Pour Some Sugar On Me” and “Rock of Ages”, they released digital “forgeries” of these classics and they released them on their own terms. Do you hear Def Leppard complaining about streaming and iTunes rates for those two songs? This year, they even released their “Hysteria” forgery.

Once upon a time, the artists had the power. Then in the Eighties, the labels stole it back. With the rise in revenue due to the CD, it made the labels mega rich powerhouses. Well it’s time for the artists to take back the power. Basically the labels without any artists are worth nothing. However, a lot of the artists just don’t see the big picture.

Those times of when recording was really profitable are over. Long gone. Recording revenues are shrinking. Streaming is trying to bring back some of it. If more and more people are paying for it the overall pool of money grows. These services need time to grow. However, as I mentioned previously, how much of that money gets passed on to musicians depends on the terms of their contracts with the labels?

Maybe Spotify and Deezer should become a label and start signing artists themselves as it is obvious that the major labels don’t care about their artists.

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A to Z of Making It, Music

Nuno Bettencourt – Guitar World, September 1989

The article was written by Andrew Hearst, and it appeared on page 17 of the September 1989, Guitar World Issue.

“Be sincere.  Whatever you do.  If its Lawrence Welk you’re into or if its Eddie Van Halen, just be honest about it and love what you’re doing.”   Words of wisdom from Nuno Bettencourt, guitarist for Extreme, a Boston – based hard rock band whose self titled debut album was recently released on A&M Records.

A guitarist speaking his mind.  How many people speak their minds these days?  Not a lot, and if they do, they are scared of the haters.  Well guess what, if you seek the limelight, there will always be haters.  Remember, not everyone will love you, but your audience will.  If you love what you are doing, the audience will be able to feel it, they will be able to relate.  Your fans are not stupid, they will know if you are faking it.  Like when Def Leppard delivered Slang, or Motley Crue delivered Generation Swine, or Bon Jovi delivered What About Now or Metallica with Load and ReLoad.  We know that these albums are about chasing some fools gold, chasing an idea implanted in the musicians head by a manager, an agent or a producer.  That is why the people didn’t respond.

Extreme’s first album was produced by the super experienced Reinhold Mack, aka Mack.  His resume is a list of who’s who of classic albums.  Some of my all time favorite albums like Scorpions – Fly to the Rainbow, Deep Purple – Stormbringer, Deep Purple – Come Taste the Band, David Coverdale – White Snake and most of the ELO and Queen albums from 1975 to the mid 80’s had Mack involved, either as sound engineer or as a producer.

Born in Portugal 22 years ago, Bettencourt moved to Boston with his family when he was four.  As a freshman in high school he heard Edward Van Halen and was inspired to pick up the instrument.  Soon he was playing covers and originals in a succession of casual local groups; he calls Extreme his “first really serious band”.

Back in the eighties, bands normally were formed, they would chop and change musicians until within a few months a stable line up was confirmed.  It was expected that once you had a stable line up, you would start to play shows, build an audience and write killer songs.  By doing that, you are creating a buzz, and with that buzz, the good old Mr Record Man Gatekeeper, would come along and make you famous.  What no one told these poor suckers, is that the good old Mr Record Man Gatekeeper will also make them sign contracts that where far from fair for the band.   To put this into context, Extreme, were formed in 1985, signed in 1987, assigned to work with a master producer in Mack so that they develop their songs and sound and their first album hit the streets in 1989.  That is what bands expected in those days.

It doesn’t happen like this anymore.  Labels in the old sense do not exist.  They do not spend money on artist development anymore.  Why? Wall Street.  Labels need to answer to a board of directors and shareholders.  Their memo is to make money, not waste money on artist and development.  Remember Warner Music is going into business with Kickstarter.

“The biggest lack in eighties’ guitar playing is rhythm,” he says.  “There’s a whole other three minutes of a song to be enjoyed.  I love playing solos, but there’s a time and place for that.  There’s a whole other world out there to play with and people are missing it.”

Such balls.  Here is a new up and comer hot-shot guitarist and he is blasting 80’s guitar playing.  To be honest, he is not wrong.  I cannot list the amount of albums i purchased where the songs are lame as, however the guitar solo spot is a song within a song.  Keel is one band that comes to mind.  Yeah they had a few good songs on each album, however the rest of the songs where shite with good solo spots.  MacAlpine is another.  This was Tony’s attempt at having a vocal oriented band around his guitar playing.  The only problem is, you need to have the songs to make it work, not just the guitar solos.  He did it well with Project Driver (the supergroup featuring Rob Rock, Tommy Aldridge and Rudy Sarzo), however that was with more accomplished musicians.   Not a lot of people show balls these days.  We all want to be loved, even by the people who only like to hate.

Extreme headlined a scheduled 15 city club tour in April and May.  The group now hopes to land the opening spot on an arena tour.  “We just want a fair shake,” says Bettencourt.

That is what every band wanted back in the day.  Their careers where in the hands of the people who controlled them behind the scenes.  The label, the manager, the booking agent and so on.  They had to rely on all of the above to get a fair shake.  Seriously how fair was that shake to begin with.  All of the above mentioned people, take a generous cut from what the band makes.

These days, the fair shake is up to you.  You determine how high or how low your career goes.  You determine your definition of success.  Adam Duce got fired from Machine Head, because his heart wasn’t in it anymore.  His definition of success was different to what Robb Flynn’s was.  He felt like he toiled for over 25 years and still hadn’t made.  He wanted to be like Metallica.  But there is only one Metallica.  And since he wasn’t as famous as them, he didn’t see the point in continuing.

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Music

The Album

In my view the idea of the album is gone. It doesn’t fit in today’s world. Hell, it didn’t even fit in the old world either. Yes I know some albums are that good, that every song from start to finish had to be heard, however 95% of albums released have two to four, maybe five good songs on them. That is why we purchased them. To listen to those good songs. These days, we just purchase the songs we want, we don’t need the album. However, it remains, as that is how the record labels make money, that is how they trick artists into signing everything away. Artists are signed to album deals. Fans are smarter these days, then the music industry. Fans want to spend their money on artists, however the artists haven’t figured out how to monetize it.

Yes you have artists like Protest The Hero that went to Indiegogo to fan fund their next album. Yes I contributed. Not because they were offering some wam bam fan experience. I contributed because I am a fan, and I wanted their new album. I would have preferred if they had a better fan experience. I would have preferred if they had released a new song by now. I would have preferred if they had a listening party for the fans that contributed of rough demos and sketches or lyrics in progress. Instead I have to wait for the album, and it could be a turd. Or it could be great. Or it could be so, so.

Regardless, people still buy albums. As long as people buy albums, the labels will still order their artists to create and release them. This is where they make most of their money. Kid Rock has moved almost 475,000 physical units of Rebel Soul and is still shifting on average 7000 units a week. It has been out since November 2012.

Shinedown still move on average 3000 units a week for Amaryllis and this album is over a year old being released in March 2012. The band is also approaching the 300,000 sales mark. They are out in tour, working hard, promoting the album. POD and Three Days Grace are also on the same tour, however fans are not buying their offerings. Why. Its crap. I heard the POD album and its garbage. Three Days Grace – Transit of Venus was that bad, even the singer left.

Both Shinedown and Kid Rock are on Atlantic. That is almost 8 million in sales revenue these two bands have come up with, plus they are still bringing in 100,000 each week. Not a bad deal for the label.

Volbeat still move on average 2500 units a week of Beyond Hell/Above Heaven. This album has been out since September 2010. All up they have sold over 220,000 units in the US for this album and their new album Outlaw Gentlemen and Shady Ladies was just released this week and it is a good album, however it does have quite a few filler songs as well. Not a lot of bands have two albums three years apart still charting and selling. The fans are spreading the word for this band. The bands mix of metal, punk, rockabilly, country and reggae has found a market. They have worked hard, they are platinum heroes in Europe and have been since 2005, and they have broken into the US market in the last year or so. It’s been a long time coming.

However in all of this I don’t believe the bands are maximising the fan experience. I am including Bon Jovi in this as well. It’s still the old way of doing things. That is they spend months and months recording 15 to 20 songs for an album, and then spending dollars on marketing the album to people that don’t care, hoping that people will buy and releasing a video or two to keep interest up. Once interest starts to dissolve, it’s time to go on tour, with the thought that the album will start selling again because of the tour. There is a lot of hope in the above as the bands don’t know their fan bases. They need to change their way of thinking.

Warner Music is even going via the fan funding route with Kickstarter. They will offer every act that raises $100,000 on Kickstarter a contract. There is a good chance that most acts will turn down the offer, as why would you need a label if you have raised over $100,000 however people do love to have a safety net and an ego to satisfy. There also another way, where if a band gets 1000 people to donate, they will get offered the deal as well. Warners has effectively moved the cost of recording and developing artists onto the fans. If the artists fail, there is no loss to Warner. If they blow up and become sensations, there is a win to Warner. Either way, Warner doesn’t suffer.

And the reason why I am mentioning this. Warner Music is the parent company to Atlantic Records. The music business is about to change again.

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