Music Publishing & Songwriting

I know it’s summer and everything, but let’s face it– I’m a New Yorker. I’m not much for gardening or working in the yard. Nevertheless, I recently found myself battling the forces of nature in preparation for an upcoming outdoor barbecue, trying to singlehandedly turn an overgrown, out of control patch of jungle into own of those tame, manicured, Hampton-like lawns. With all the sweating and cursing, the endless labor and the distinct lack of progress, it felt about like a day in the music business, during what has to be the deadest, most uninspired period I’ve ever seen during 25 years in this industry.

In a summer that has seen continued dismal record sales, falling publishing incomes, the crash of the touring business, and worst of all, the tragedy at Love Parade in Germany, the whole music biz seems stuck in the kind of dreary, gray blanket of stale air that has hung over NYC for most of the summer. It’s hot, uncomfortable and nothing’s moving.

Even Billboard seems to be struggling to come up with anything to fill the pages. Last week they ran an article about a consortium of European banks who are partnering with Universal Music, to offer a discount subscription for music downloads with the opening of every new bank account or charge card. Out of 200 participating banks in Germany, 6,000 people have signed up. That’s 30 people per bank. Jeez. 30 people? And they wrote an article about it? Must’ve been a slow news day.

Staring out at a wild, unruly, tangled mess of a field, it’s not easy to leave the lawn chair and get out the weed-whacker, but we’re quickly nearing the point of no return. It’s August, and the fourth quarter is about to kick in. Somehow, the industry has to find a way to start at least laying the groundwork for better times ahead. Undeniably, it’s been a bad year in the fields. Still, we have to start doing the obvious work to get something growing again:

Step One: Take Control

Nature abhors a void. Even when it looks like nothing is happening, something is going on. Right now, even as the music industry stands still, other more dynamic businesses, from social networking companies to Apple to mobile networks to investment companies are expanding their influence, grabbing our audience, choking off some of our own opportunities and redefining the entertainment landscape on their terms, not ours.

It’s incredible that even after losing control of the music industry to MTV way back in the 1980s, then losing it again to illegal file-sharing in the first part of this decade, and yet again to Apple and iTunes in the second half of the decade, the record companies and music publishing companies have still not offered up anything to even attempt to control the playing field in their own industry. Streaming didn’t originate with record labels or publishers. Neither did the iPad or YouTube. Given the extent to which they’ve benefited from it, why did a music publisher not come up with a TV-show like “Glee” years ago?

If we don’t want to think beyond making music, then we can rest assured that someone else will. Then they, not us, will decide how our product is marketed, distributed, and sold, as well as what price it will sell for.
Don’t believe it? Notice how 80 years later we’re still going hat in hand to the radio industry, begging them to play our records (and in the case of the record industry, wishing they would actually pay us something to do it). Why does every new initiative in the music business seem to revolve around piggy-backing on someone else’s innovation, like making a channel on YouTube or taking an ownership share in Spotify? If you don’t control your turf, someone controls it for you.

Step Two: Clear out the dead.

You can’t hope for much new growth until you get out the wheelbarrow and start cleaning up the mess. This is actually one huge advantage for new, small companies entering the business. At least they’re starting fresh. The great burden being carried by all of the major music corporations is the fact that they have little choice but to manage the slow death of the CD, and the whole traditional business model that surrounds it. Everyone knows that it’s on it’s way out. If they could, they’d kill it off entirely. But the truth is that it’s still the primary source of income. No one can afford to abandon it. Consequently, too many resources go into keeping the dead man walking, while the infant survives on whatever is left.

For those who are still forming their overall business strategy, this is an opportunity to embrace a new model, free of the ties to the past that are strangling the industry’s major players. Take advantage of it. You don’t have to build your business around manufacturing CDs, or getting radio airplay, or trying to place songs on million-selling albums, or focusing on your own home territory simply because that’s what everyone has always done. Those old branches of the tree quit growing years ago. Anyone trying to hang onto them is going to be hearing a distinct cracking sound in the next five years.

Of course, abandoning the old ways of doing business means you’ll have to come up with new ones. That’s never easy. But it’s easier to create something new and alive if you’re not spending 80 percent of your time trying to resuscitate something dead.

Step Three: Look at what grows naturally.

None of us are completely in control of our own fate. Sometimes you decide what will grow in your garden, and other times, no matter how hard you try, the garden decides what will grow. We all have to adapt to our environment, and the faster we do it, the easier our life will be.

Part of the reason the music business continues to struggle is that it’s been determined to force results out of a market that simply doesn’t want what it’s offering. People don’t buy albums. Fine. Sell them something else. The audience is constantly shifting and losing interest. It’s frustrating, but it’s nature. Give them a constant stream of new songs, rather than ten new ones every two years.

In most cases, the marketing strategies that have worked recently, from mixtapes to YouTube videos to mashups to blogs, have grown up naturally out of their environment. Meanwhile, the field is littered with millions of marketing gimmicks, from “enhanced” CDs to special “fan club” subscriptions, that emanated from corporate planning sessions, only to dry up and wither when they ran into a skeptical and disinterested fanbase. If it’s not happening at a grass-roots level, then the grass won’t grow. Work with the forces of nature, not against them.

Step Four: Plant a seed.

A few years ago, I decided to plant some trees. Being the impatient city boy that I am, I decided the bigger the better. I bought trees that were already at least half grown, planted them, then looked around and admired my efforts. Within a few days, I had a garden that looked as if it had been growing for years. Within three months, I had a garden full of big, dead trees.

Later, an Englishman (and hence, a genetically gifted gardener) suggested that instead I should buy some tiny little saplings. The theory was that if they died, I’d hardly notice. At the same time, being very young, they were more likely to adapt to the soil and eventually start to grow. So far anyway, it seems to be working.

Much of the reason that the music industry has failed to discover new technologies on its own, or clear out the old failing business models, or even jump on trends that have taken root at street-level, is that the large corporations that dominate the field want things to be too big, too fast. Faced with the pressure of producing quarterly results, they can’t wait for a new idea to grow. Just as they can’t afford to nurture artists through a three or four album development, neither can they nurture new business strategies or marketing initiatives that could take years to pay off.

Again, those just now staking their claim to a tiny spot on the music business landscape have a real edge here. If you keep your overheads low and your expectations reasonable, you can afford to let nature take its course. Try your new idea in an inexpensive, low-risk way. Take a deep breath or two. If it doesn’t take, it’s no great loss. But if you see it growing, you can patiently nurture it along, until it suddenly has a life of its own.

Last weekend at the barbecue, I spoke with a friend in the garment business, who has a clothing company in New York. He explained to me that even fifteen years ago, there were dozens of manufacturers, tailoring shops, pattern-makers and fabric factories throughout the country who created garments for a wide variety of clothing lines. Today, there are virtually none. Trade policies, wage pressures from developing countries, outdated union rules, organized crime, and short-sighted management policies combined to essentially eliminate the industry. We’re not talking about a tough business cycle. The dress-makers, weavers, tailors and other specialists have left the country or found other work. The machines have been sold off. It’s not coming back.

Industries do die. It’s not enough to reassure ourselves that “music will always exist”. Sure. But will the music industry? It didn’t exist much before the 1900s. It doesn’t have any guarantees for the future. Another six months has come and gone, and nothing is happening. Sooner, rather than later, we better get out the shovel and start digging our way out of this mess.

I think the advertising tagline of the New Music Seminar, held last week in NYC, should have been changed from “The Revolution Starts Here” to “Welcome to the War Zone”. That seems to better capture the mood at the parts of the conference I attended— battered, beleaguered, angry and afraid. Very afraid.

And for good reason. During one presentation, NMS’s organizers Tom Silverman and Eric Garland from BigChampagne laid out the real numbers that music makers and marketers are up against, and as most of us in the industry already knew, it wasn’t pretty. These numbers have since been flying around the internet, as a rather fitting post-script to an event that was supposed to celebrate new music. If this is the revolution, I think we’re losing:

Albums that sold at least one copy in 2009: 98,000
Albums selling less than 1,000 units in their first year of release: 92,601
Albums selling more than 10,000 units in 2009: 1,319
Albums selling more than 5,000 units in 2009: 2.058
Albums selling more than 250,000 units in 2009: 85

As these numbers have circulated, I’ve seen several comments questioning their accuracy– wondering for instance if they include worldwide sales. It doesn’t matter. Anyone who is hoping that international numbers will significantly change the picture is dreaming– the record business in Europe is in a free fall and Latin America just posted similarly dismal results. We can’t kid ourselves. The fact is that no one working in the industry on a daily basis would dispute these numbers. There is simply far too much music chasing an ever-dwindling audience.

Rather than making excuses or trying to find a silver lining in the storm clouds, our best response to the crisis is a crash course in survival skills. Of course, there are obvious external forces that are causing much of the industry’s pain– most notably the fact that every kid around the world over 10 years old has figured out how to take our product for free. Certainly, there’s a need for a concerted effort across the industry to combat piracy of all kinds. But you and I, working on our own, aren’t going to solve that one. Given the daunting situation staring us in the face, let’s focus on what really matters: saving ourselves.
How do we rise above the masses of people spending money, putting out music, and seeing little or no results? Here are three fundamental tips:

1. Be Strategic.

Most people making albums have put more thought into the artwork and the credits than they’ve put into what they’re actually going to do with the music. Incredibly, that is as true at a major label level as it is with self-funded indie efforts. Projects are green-lit, recording studios booked, producers engaged without anyone having given serious consideration to basic marketing questions like:
Who is this act’s audience?
How does that audience listen to music?
What kinds of records are they willing to purchase?
How do you reach that audience in order to market to them?
Which of those marketing methods are feasible, given your budget?
If it needs the support of radio, does the record have a clear radio single?
If you need to sell the CDs at shows, does the act have opportunities to tour?
Given the results of similar acts, how many records can you reasonably expect to sell?
How much then can you afford to spend on making and marketing the record?

If you are a hip-hop or a dance-pop act, your audience is entirely single-driven, even at a superstar level. Consequently, until you have a hit single there is no reason to make an album. If you make jazz records, all indications are that the audience responds only to artists who have established a level of credibility through touring and playing with well-known musicians. If you haven’t done that yet, then don’t make a record. For a country artist, there are very few ways to reach a sizeable audience without radio airplay. If your budget is tight, then better to record one single and use the rest of the money to promote it than to record ten songs that no one will ever hear. For a singer-songwriter with only a small local following, selling 500 CDs might seem like victory, rather than defeat. And indeed it can be, providing you can make the whole product for under a few thousand dollars. The key here is to have a plan.

2. Be Realistic.

The reason that most artists, record label executives, and producers approach their recording projects without the requisite strategy is that the process of planning requires a reality-check. As Simon Cowell would happily point out, most artists could benefit more from a look in the mirror, an honest self-appraisal and perhaps some frank feedback from family and friends than years of lessons and words of encouragement.

In pop music, artists have to look like stars, have endless stamina, possess a drive and work-ethic that go well beyond obsessive, and rely on a charm that wins over anyone who meets them. If that’s not you, then don’t waste what could be a successful career as a producer or songwriter churning out ill-fated solo albums. If you’re a rock band that can’t play live, then making records is an exercise in futility. Hip-hop acts need some kind of street-level following. If you’re not generating a response on that basic level, then it’s time to go back to the drawing board. A DJ/producer who makes records that differ drastically from what he or she plays at a club is bound to disappoint the audience.

Don’t fool yourself. Don’t rationalize and don’t look for miracles. If you can’t hear your music objectively or see yourself clearly, then you’re not ready to make a record.

3. Be Frugal.

Most major record companies spend both too much and too little–blowing money on travel expenses, dozens of misguided mixes, over-cutting and endless experimenting with changes in direction, only to suddenly pull back when the marketing, promotion, and tour support bills come in.

While the scale of spending differs drastically on an indie level, the same kinds of mistakes show up again and again. Artists operating on a shoestring cut an album where a single would have sufficed, or an album when an EP would have been more effective, or put 15 songs on a record rather than 9 or 10, as if the sheer number of songs would be a selling point. They spend money on vague, abstract artwork for their album cover that presents no visual image to communicate their identity to an audience. They hire an independent radio promoter to work a song to radio without a budget sufficient to break the song in any meaningful way.

While it’s not going to make anyone a fortune, to sell less than 5,000 records, or even less than 1,000 is not necessarily a bad thing. One thousand CDs at $15 a piece still makes $15,000. If it cost $5000 to make and promote the record, then it was a profitable venture– putting you ahead of 90% of the major label releases each year. The problem occurs when you’ve spent $17,000 to make the record, and you haven’t even begun to market it. When you’re operating in a sales environment as difficult as the one we face at the moment, you must be able to record at minimal expense, get the most value for your dollar, and put your money where it can generate results. This is a market the leaves no room for error, and even less for extravagance.

I’m continually amazed at the number of beginning artists, with no following at even a local level, no obvious radio single, and not even a clear artistic direction, proudly announce to me that they’re “working on their record”. Former multi-million selling acts like Matchbox 20 struggle to sell records in the current market, and yet here is a new act with less than a hundred people in their fanbase making an album. Why?

The answer is: because it’s too easy. The ease of home-recording, the universal availability of digital distribution, and the rise of the DIY ethos have removed many of the barriers to music-making, and that’s a good thing. But by doing so, it’s caused many artists to feel that recording their own record is some kind of rite of passage that must be fulfilled at the earliest possible date.

Athletes often talk about having “a respect for the game”. That just means that no matter how talented or gifted a sports star might be, he or she still has to appreciate the difficulty of what’s being undertaken, whether it’s hitting a 90 mile an hour fastball or pedaling a bicycle up a mountain, and must be prepared to do the hard work necessary to be victorious.

The scary numbers that many of us have been looking at for nearly five years now indicate that artists, producers and record labels need a little more “respect for the game”. It’s not difficult to make an album. But to make even one song that a significant number of people genuinely care about enough to purchase is a monumental undertaking. Before you go marching into a war zone, have a plan, be realistic, and consider the costs. Let the revolution start there.

I don’t usually get too personal in this blogspace– but I thought this week I’d offer up a quick excerpt from Chapter One of the Eric Beall biography for which absolutely no one is waiting (and which happily, no one is actually writing).

The story begins just before I graduated from Berklee College of Music, when, like most graduates everywhere, I was searching out possible job opportunities with a mixture of anticipation, excitement, ignorance and desperation. While I didn’t know much about what I was doing, at least I knew enough to be reading Billboard regularly, and that was where I happened on an article about a young whiz-kid named Tom Silverman, who was the founder of Tommy Boy Records, one of the seminal record labels in the history of hip-hop.

Riding high off the success of “Planet Rock” at Tommy Boy, Tom was quickly emerging as an industry leader, having also co-founded the New Music Seminar. Based in NYC, this conference was at the epicenter of a wave of new music taking shape in the early 1980s, it was where new wave and punk rock, hip-hop and electronic dance music all met and mingled, with hundreds of new artists, indie label owners, A&R people, press and other entrepreneurs plotting out their path into the industry.

The article I read about Tom Silverman concerned his plans to launch an industry group called “The Independent Label Coalition”, which was intended to be a trade group controlled by independent labels from across genres. The hope was that by working together to improve the business environment in the independent music world, the ILC could increase the ability of these smaller companies to compete with the major labels that dominated the industry. At the end of the Billboard interview, Tom pointedly mentioned that he was looking for volunteers– and I quickly reached out to be in contact.

Tom Silverman, from Tommy Boy Records and the New Music Seminar

To me, The Independent Label Coalition seemed like an ideal opportunity to meet people in the music business, learn about the industry, and hopefully build relationships that would result in gainful employment. To Tom, my willingness to volunteer undoubtedly confirmed yet again one of his pet theories, that in the music business, there was always a young kid who would work for free just for the chance to be involved. Happily, I did manage to meet Tom shortly thereafter, and was given a small role in the Independent Label Coalition.

I moved to New York from Boston in the middle of July, 1984, dropped my still-packed boxes in my tiny apartment, and immediately reported for duty at the New Music Seminar, where the Independent Label Coalition was officially being launched. I helped to check people in for the conference; I stood for endless hours at the ILC booth in the exhibit hall; I worked the door at Studio 54, where the Independent Label Coalition had a kick-off party. I was yelled at by Bob Krasnow (the head of Elektra Records); I screwed up most of what I touched; I tried to network in rooms of hundreds of people where I didn’t know a soul. But I also met dozens of new entrants in the music business sweepstakes, saw early performances from artists that ranged from the Beastie Boys to Run DMC to RuPaul to Madonna (check out the video below), and sat in dozens of panels where I learned the realities of how our industry is structured. Thanks to Tom Silverman and the New Music Seminar, I suddenly entered the music business, and I’ve been fortunate enough to remain there ever since.

The Independent Label Coalition didn’t actually work out very well– the idea of coordinating activities among indie record labels, made up of some of the most defiantly “independent” personalities in the world, proved to be a little Utopian for the real world. To me, it didn’t much matter. The ILC did exactly what I needed it to do, which was to give me my first network of friends, supporters and mentors in the music industry. In fact, many of those people I still maintain relationships with today, more than twenty years later. One of the leaders of the ILC was David Renzer, who at the time was a successful songwriter and producer. David went on to become the head of Zomba Music Publishing, where he wound up signing me to my first publishing deal. Now, David is the worldwide president of Universal Music Publishing. Another early compatriot from the ILC days was Duncan Hutchison, who became the president of Caroline Records, and is now the Chief Content Officer of RightsFlow, the licensing organization.

The ILC also introduced me to to a wide group of record industry entrepreneurs, including Eddie O’Loughlin at Next Plateau Records, who continues to be a colleague and mentor to me, Sergio Cossa, for whom Shapiro Bernstein, the company where I work now, administers the Emergency Music catalog, and of course, the illustrious Tom Silverman.

To bring this story to a well-crafted and slightly ironic conclusion, it turns out that Tom Silverman, along with my friend David Lory, one of the industry’s most creative and forward-looking executives, has now relaunched the New Music Seminar. After concluding in 1995, the New Music Seminar was brought back to life in 2009.

Dave Lory, New Music Seminar

As it turns out, I’ll be participating in NMS 2010, being held July 19-21st in New York. I’ll be promoting my books, “Making Music Make Money” and “The Billboard Guide To Writing and Producing Songs That Sell”, as well as my new consulting service, “Ask The Music Business Weasel”. If you can be in or around New York during this time, I strongly urge you to be a part of this conference, which is all about uncovering new paradigms and business models for success in today’s music business. And if you’re there, please find me and say hello. I’m looking forward to signing some books, chatting a bit, and being part of an event that played a key role in my own development as a songwriter, producer and executive.

http://www.newmusicseminar.com

Contrary to what many believe, the music business is not really such a tough thing to break into. There are no entrance exams, no licenses to obtain, and far less financial commitment than in almost any other business (have you ever thought what it would cost you to get into the restaurant business, or steel-manufacturing?).

Even better, there are hundreds of organizations, societies, conferences, and trade groups to help you start your network. The New Music Seminar is one of many such points of entry. All you have to do is show up, start learning how the industry works, and make some friends. It worked for me. I’ll hope to see you there…

It seems almost cruel to kick a company when they’re down and gasping for a final breath, but the news from EMI Music just keeps getting more and more bizarre. Only 10 weeks after naming Charles Allen the executive chairman of EMI Music (he replaced Elio Leoni-Scelti, who himself lasted only 18 months), Terra Firma announced that the head of EMI Music Publishing, Roger Faxon, would be replacing Allen, taking over the helm at EMI Music (the record division) as well. Even by music industry standards, that’s an amazing bit of turnover– Allen has gone from executive chairman to a vaguely defined “adviser” role in less than one financial quarter. It’s like watching a bit of time-lapse photography, where a process of destruction that usually takes a year and a half has been condensed into 10 weeks.

And all of this is meant to reassure the investors.

Roger Faxon, Chief Executive EMI Group

The real irony is that after three years of completely inept decision-making, Terra Firma is actually making a pretty good call on this one. At least Faxon has a genuine understanding of the business. While he didn’t build EMI into an industry-leading publisher (that was the work of Marty Bandier, who is now at Sony ATV), he has maintained the company’s status despite the ever-present rumors of the corporate parent’s financial demise. EMI Music Publishing still has one of the strongest executive teams in the business, a catalog full of classic songs, and a current writer roster that made it the Publisher of the Year once again at this year’s ASCAP Pop Awards. The obvious strategy here is to try to use the strength of the publishing company to shore up the weakness of the recorded music division. It makes pretty good sense… on paper.

For reasons that are fathomable only to the executives that run major media companies like Universal, Warner, Sony and EMI, none of the major music companies have ever managed to create any relationship between their record companies and their associated publishing companies. There are remarkably few acts that are signed both to Warner Bros. Records and Warner Chappell, or to Sony ATV and Columbia Records. In fact, the relationship between many of these publishing companies and their affiliated labels is downright hostile. At Sony ATV, I was well-aware that many top-level A&R people at Columbia and Epic were steering their new acts to EMI Music Publishing, convinced that the artist would get more money and promotional support at that company than at Sony ATV. Likewise, EMI Music Publishing has made no secret over the years of their disdain for the hapless label that shares their name.

Some of the hostility can be attributed to executive envy, political gamesmanship, and the general corporate tendency to put one’s personal bonus ahead of the interest of the company itself. Some of it comes from the fact that many of the publishing companies and their associated labels have very different histories, areas of specialization, and financial means. To call the relationships “dysfunctional” would be something of an understatement.

Not too surprisingly, in the world of independent music companies, the idea of having a label and publishing company cooperate for the greater good has been far less elusive. In fact, many of the great success stories among independent labels have been built around the idea of record company and publishing company working together– from Motown Records and Jobete Music, to A&M Records and Almo-Irving Music, to Jive Records and Zomba Music, to Disney Records and publishing. It’s not terribly tricky. It simply means that the record label either strongly encourages or demands that their artists make a publishing deal with the related company, and likewise, the publishing company tries to keep any new talent they discover or hit songs generated by their writers “in house”, by bringing them to the associated record company.

So the idea now being put forward by Roger Faxon and the string-pullers at Terra Firma, to use EMI Music Publishing to bolster the fortunes of EMI Records, is not a crazy one, even if it’s relatively untried at a major music company level. I can almost understand how the non-music business weasels within Terra Firma could see this as the last best hope– and could have great expectations for the power of the two companies when finally brought together. It certainly won’t be the first time during their grand experiment in the music industry that Terra Firma has had their hopes dashed, though it may be the last time.

As obvious as the idea to unite the two companies sounds, it’s about ten or fifteen years too late. At this point, with EMI in such precarious condition, it’s almost impossible to see how this plays out. Most top artists with any other options would be understandably hesitant to sign to EMI Records right now, and quite frankly, it is probably not the first place that anyone from EMI Music Publishing would recommend for their artists. The publishing company needs its top writers, artists and producers to focus on creating the biggest hits possible, regardless of which label they happen to be released on.

Even if EMI Music Publishing were to encourage their top new artists to consider going to EMI Records, many are under contract with other labels for years to come, or are signed to production companies with ties to other companies, or have managers with relationships at other organizations. To create any real synergy between the two divisions is probably a five-year program, even in a best-case scenario.

Best-case scenarios have not served Terra Firma well. Indeed, the real problem with its buyout of EMI and the subsequent meltdown that followed has been a simple case of unrealistic expectations, which when unrealized, only increased the need for greater miracles in the next financial quarter. The ultimate result of this is the kind of ridiculous game of CEO musical chairs that we see now, where each new person is brought in with high hopes and a touted “turn-around” plan, only to find themselves doing a disappearing act as soon as the “turn-around” doesn’t turn out as planned. Every business should challenge its leaders to do the very best they can do. But if you challenge people to do the impossible, you will inevitably be disappointed. If you bet on them doing the impossible, you will not only be disappointed– you’ll be broke.

Terra Firma CEO Guy Hands

From the moment that Terra Firma purchased EMI in 2007 for the wildly inflated price of $4.7 billion dollars, they put themselves in a corner from which they can never escape. The loans that made that purchase possible were made on earnings expectations that were unrealistic for any music company in the present business climate, especially a company that was hardly a market leader even three years ago. In order to make the interest payments on those loans, Terra Firma now needs EMI to generate income at a level that is simply not possible for a music company in this environment.

If you try to drive a Volkswagen in the Indy 500, it won’t win the race– even if you press the gas pedal to the floor and keep it there. It’s not that it’s a bad car. It was never built to run that way. Further, if you insist on trying to do it, you’ll eventually ruin the engine– all because your expectations were not remotely in keeping with what the automobile was designed to do. EMI has plenty of talented, dedicated people in its offices around the world. It’s not inherently a bad organization. But music companies are not investment banks or oil companies. They don’t generate that level of cash. If you try to force them to do it, you’ll wind up cutting the creative experimentation you need, taking dangerous chances on high-priced “sure things”, demoralizing your staff, and draining your most productive assets to pay for your least-productive ones.

As remote as the problems of EMI might seem, the lesson of unrealistic expectations is one worth keeping in mind, even for individual songwriters and entrepreneurs entering the publishing game. As Andre de Raaff, the CEO of Imagem Music once sagely pointed out to me in a discussion about the disappointment of many investment firms who recently acquired publishing catalogs– music publishing is indeed a relatively steady business, but only over the course of about ten years.

When looked at over a decade, most established music publishing catalogs tend to hold their value and provide a relatively predictable rate of return. But within that ten year period, there can be wild swings in income from one year to the next. Currency fluctuations, copyright lawsuits, split disputes, hit songs or big flops can cause unexpected spikes or dips in the financial picture. Should you happen to buy into a catalog during the wrong three or four year period, you could easily panic when you don’t see the results you expected. If you can’t afford to wait it out for ten years, at which point the good and bad times will probably even each other out, you risk taking a sizable loss on your investment.

For those starting up a company, that means that you need to have a clear, level-headed understanding of the risks involved, the potential profits, and the time-frame in which you expect to see some action. Here are three rules to keep in mind that should help you avoid the dangers of great expectations:

1. Don’t buy anything based on what it could be.

The music business is built on dreams of endless potential. Every catalog you will ever be offered for purchase will be “full of undiscovered hits that have never been recorded!”. Every songwriter you consider signing will be on the verge of becoming the next big thing. Every cut you get will be under consideration to be the next single. None of it means anything.

Of course, all of it is possible–and hopefully one of the acts or songs you sign will turn out to be wildly successful. But you don’t do the deal based on that expectation. You negotiate the price based on what something is earning now (if it’s an established artist or catalog) or on a very conservative estimate of what it could do (for new artists or songs). You don’t plan for success. Plan for slow and steady growth, and make your financial decisions based on those plans. Then be surprised by success.

2. Don’t look for a quick money.

There isn’t any. All money in music publishing comes through the proverbial pipeline– a CD is sold at a retailer, who pays the distribution company which then pays the label which then pays Harry Fox or the equivalent which then pays the music publisher. Most of the time, that process takes somewhere between a year and a year and a half– longer than that for international royalties. Performance money is somewhat quicker, but still at least 9 months from when a song is on the radio. This is why songwriters want advances from publishers– because it’s very easy to find yourself starving, even while you’re hearing your song on the Top Forty countdown.

If you sign a new writer with an advance, no matter how minimal, it’s very unlikely that you will recoup that advance within the first year. Even if the songwriter is able to write a song in the first week of the deal, and you’re able to get the song picked up by an A&R person in the first month, it will still take three to six months for the artist to record it and release it, and another month and a half before it starts to impact at radio. It’s almost impossible that the money for that airplay or sales will show up in your coffers before the end of the first contract period. When it comes to signing and developing songwriters, you have to be willing to stay in the deal for at least a couple of years in order to get your money back.

3. Desperation is dangerous.

Decisions only get harder when you’re desperate. If you need to show results quickly, you will take foolish chances, be too aggressive, overpay for deals, or put too much pressure on the songwriters signed to you.
If you’re trying to stave off financial disaster, you’ll make budget cuts that will impair your ability to find new acts, drop unrecouped songwriters too soon, and sell off songs or catalogs at a fraction of their real value.

The music biz is a risk-taking business– but in order to take risks intelligently, you need a solid, supportive environment in which to work. That means enough capital in the business to survive while you’re waiting for your pipeline to come in, low overheads that can be covered by slow and steady growth, and enough patience and belief from your partners or investors that you are able to follow your instincts, and even make a few mistakes along the way.

A little more than a month ago, when Terra Firma was desperately trying to raise funds from its investors to stave off a Citibank takeover of EMI, they trotted out the new CEO at the time, Charles Allen, and announced that Allen would be unveiling “the new plan” to turn EMI from investment bust to boom. It was hard not to feel badly for the new leader, who was essentially being asked to create a fantasy picture in which everyone’s expectations would eventually be met, even as everyone knew that this was a completely unlikely scenario. As it turns out, he didn’t stick around long enough to even initiate the plan. And now there’s a new dream on the table.

As my father in law likes to say, you can’t teach a pig to fly. Trying will only frustrate you, and annoy the pig. Keep your expectations in line with reality, and you’ll have a far greater chance at not only meeting them, but maybe even exceeding them.

I hope everyone had a great Memorial Day holiday! I joined much of the country in taking a quick vacation– a couple of days of international business, then off to a week-long respite from weaseling. So maybe that explains why my mind is on things global. Or maybe its a conversation I had last week with someone in the insurance industry who had just been offered a position in Singapore– he was telling me that in many of the world’s fastest growing economies there is a real shortage of people with expertise in many of the major industries. Or maybe it’s the video I just watched, forwarded to me by one of our faithful blog-watchers Quincy Wofford, of the first hit that built the career of Haim Saban, the subject of one of my most recent blogs. That video featured an Israeli teenager singing a French song in one of the earliest Japanese television cartoons. It doesn’t get much more international than that.

What all this worldly thinking does is to bring home to me the fact that most of us are missing opportunities all the time, simply because our sphere of awareness is not sufficiently global. In fact, much of the time, it’s barely even local. When I was a writer-producer, the world was frequently contained entirely within the four walls of the recording studio, for weeks or months at a time. We are all worrying so much about what we’re doing, that we forget that where we’re doing it could make all the difference. If you’re searching for gold (or platinum records), it’s usually easier if you go where the gold is found.

This does not mean that you should immediately join every other songwriter from New York, Nashville, and London in moving to Los Angeles. Quite the opposite in fact. The herd mentality is exactly what you want to avoid if you’re looking for opportunity. You can’t dominate a market that’s over-saturated. You become the big fish by going where all the other big fish are not.

Of course, those little placid pools of opportunity seldom feel terribly exciting when you first arrive at them. In fact, most of the time, when a songwriter is in a small town, or a mid-size city, or a relatively small country, or in an economy that is still developing and has little infrastructure for media or music businesses, all he or she wants to do it get out. I recall having a writer/producer from Denmark make a writing trip to New York, and within days of arriving, he was already talking about moving here. Now Denmark is actually a very vibrant country with a thriving music community. Nevertheless, it’s not a large market, and as such, certainly doesn’t offer the financial pay-off that making it in America does. I can easily understand the appeal of relocating to a city full of other artists, writers, and music business people.

What I had to explain to the Danish writer was that much of his appeal to A&R people, American co-writers, and others in the industry was that he was something exotic. Simply by coming from a different place, and bringing different influences and ideas, he had a story that opened doors. It’s a lot easier to suggest to an A&R person that they take a meeting with the hot new writer in town for a week from Denmark, or Berlin, or Peru, than to interest them in another songwriter from Brooklyn or Hoboken. People in the music industry are constantly searching for something new and surprising, and more often than not, those things do not emerge from the same community of songwriters that is creating the current hits. The hot new thing comes from outsiders– whether it’s from a regional scene (think of the music coming out of places like Atlanta, Austin, Chicago, St. Louis, New Orleans, Memphis, Portland and Vancouver), or from another country. Today’s Hot 100 is full of international success stories, from RedOne to Stargate to David Guetta to The Phoenix to The Script to Greg Kurstin to Akon to Rihanna. Being from a place outside of the music centers can seem like a disadvantage, especially if there’s no local music community with whom to work. Yet, it’s also an advantage of sorts, as it gives a story and a new, fresh perspective. It also makes it relatively easy to become a dominant player in the local scene.

RedOne

That reality has a flip side for songwriters, producers, publishers and others who are located in a music center, like New York, London, Nashville or LA. While you might be fighting for every breath in a big but very crowded pond, perhaps you would be a big fish in a smaller, less competitive environment. I often find this to be especially true for melody and lyric writers working in the urban/r&b market. What if instead of struggling to break out of the pack of the hundreds or thousands of topline writers in a market like LA or Atlanta, you were to go to a European country, where people who could write believable, authentic lyrics with an American urban sensibility and slang were in relatively short supply? Countries like Denmark, Sweden, Norway, Germany, or Amsterdam are full of fantastic programmers and producers who can compete with many of the top urban producers in the US. But they lack the topline writers who can provide lyrics that work for American audiences. It doesn’t always make sense to go where the action is. If you’re trying to get to first base, the best thing to do is “hit ‘em where they ain’t”.

That goes for the business side as well. Just as many developing countries are in need of experts in insurance, banking and medicine, they may also be in need of people to build their creative industries, like music, film, radio, and entertainment management. It’s hardly news to anyone that the music industry in America and much of Western Europe is contracting, or maybe even collapsing. But in places like Eastern Europe, China, and the Middle East, the music industry is just getting started. It’s often not very pretty, frequently lacking in infrastructure or even basic copyright law, and sometimes actually at odds with government authorities or local customs. That’s about what the industry looked like in America in the Forties and Fifties, when people like Leonard Chess, Ahmet Ertegun, Don Kirshner, and Col. Tom Parker first made their fortunes. If you want to strike it rich, the place with the least rules, the fewest entrenched power brokers, and the lowest number of competitors is an ideal place to do it.

Since it’s that time of year, I would then offer this up as advice to all of the graduates of music schools and music business programs this month:

Get outta here.

Don’t go where everyone else is going, wherever that might be. Find a place where there is an interesting local scene that’s just taking shape, or an economy that’s growing rapidly, or a place where whole segments of the music industry have never existed. Then bring your knowledge, talent and ambition to somewhere that really needs it. It will be very difficult, especially in places where there is relatively little legal or economic infrastructure on which to build. But trust me, trying to break through by gigging at the Mercury Lounge or the Whiskey is pretty difficult too– as is working your way up through the executive ranks of a major label teetering on extinction. At least this way, you have the chance to truly hit the jackpot, rather than just hoping for a decent advance or a good severance package.

Sooner or later, you will in all likelihood return to London, LA, New York, Stockholm, Munich or Tokyo– that’s why they call them music centers. These places are the ones with the lawyers, agents, major publishers and labels, and collection companies that make the business run. But when you return, you’ll come back with a story (hopefully a successful one), some momentum and credibility, and with any luck, the kind of power that comes from having created a thriving business model in unlikely circumstances. That’s very different than showing up in town with a degree and a suitcase full of resumes.

Realistically, in order to pull this off, you’ll need more than just a basic background in the music biz. You’ll want some foreign language skills, an understanding of the culture and economic system of wherever you’re headed, a musical knowledge that extends beyond the current US Top 40, and an understanding of how different aspects of the music business can change based on local custom, copyright laws (or lack thereof), and different collection systems. Needless to say, that will take some extensive studying and research.

At the moment, I’m knee-deep in updating my Berklee Music online class, Music Publishing 101. One of the key changes I’m hoping to make in the new course is a greater emphasis on the international differences in music publishing. It’s a very tough subject to address, simply because there are so many of those differences, some rooted in variances in the copyright laws between territories, others related to the size of the market, and still others based on custom and history. The US system is neither the oldest nor the most representative– it’s just one way among many of publishing music. You need to know the variations in each market, not just so that you can speak intelligently with sub-publishers and colleagues in other regions, but also so that you can take advantage of opportunities that lie outside of your own national borders. If you want to check out the new version of Music Publishing 101, visit Berkleemusic.com

When I first told my parents that I wanted to be in the music industry, they reminded me frequently that success in that field seemed to hinge entirely on being “in the right place at the right time”. Those words always drove me crazy, as they seemed to imply that anything that happened in music was all a matter of sheer luck—never a great basis upon which to build a business strategy. While I’m still not a big believer in the “lucky break” theory of career development, I now have to admit that Mom and Dad had a point. By doing a little research, keeping your eyes open, and being willing to go wherever it takes to grab an opportunity, you can put yourself in the “right place” at the “right time”, and make your own luck. Don’t be afraid to pack your bags and go west, east, north, or south to find a place where the pasture is greener.

A good friend of mine, one of the best “songpluggers” left in the music industry, has his own company through which he consults for a number of publishing companies and songwriters, pitching songs throughout the world. His company slogan, emblazoned on every email is:

Small is the new big.

He’s right– in more ways than one. Clearly, small companies with low overheads and fluid business plans are better suited to manage the challenges of the “new” music industry than the massive conglomerates that have been the dominating forces over the past several decades. In fact, even many large, well-established companies have realized that small profit ventures like low-percentage administration deals, music library businesses, gratis sync licenses that yield only performance income, and no-advance sub-publishing arrangements have replaced the big-money pay-offs on co-publishing, life of copyright deals and six-figure sync fees. Small money is not only the new big money. It seems to be the only money there is.

But “small is the new big” in another sense as well–perhaps it would be more accurate to say, “small is tomorrow’s big”, and it always has been. The music industry is full of niche markets, many of which are deemed too small or specialized to interest the major record labels, or their colleagues at the major publishers. These little pockets of activity probably don’t show up on the Billboard charts. The music may not even be sold through conventional music outlets (whatever those are anymore). The markets are too obscure to interest the big industry players, not nearly sexy or cutting-edge enough to bring up at an A&R meeting, and too limited in their earnings to attract the attention of the investment community or the financial guys at the major music corporations. And yet, if you look at some of these markets twenty years later, you’ll usually find that at some point, a smart, wily, unconventional entrepreneur came in and quietly made a killing, while all the rest of the industry slept. Out of nowhere, the small business person becomes the new big one.

Happened to read an article today about one such example– a very dramatic one at that. Check out an article called “The Influencer”, by Connie Bruck, in the New Yorker magazine.

http://www.newyorker.com/reporting/2010/05/10/100510fa_fact_bruck

New Yorker articles being what they are, this is a long and fascinating story of entertainment mogul and political powerbroker Haim Saban, full of complex political and ethical implications. But for music business weasels like myself, the primary point of interest was this one:

Saban made his initial fortune as a music publisher. He’s now estimated to be worth more than $3 billion dollars. Do I have your attention now?

In 1986, Saban sold his first music publishing catalog to Warner Communications for about $6 million dollars, which he then used to expand his empire, buying additional catalogs, and then expanding his media holdings to eventually include Fox’s Family Channel and now, Univision. Still, I feel fairly confident that most in the music business would hardly recognize his name, except for having seen it on the outside of office buildings or theaters in LA. For all his years in the music industry, Saban doesn’t seem to have any big hits or legendary acts to his credit. He probably didn’t often hang around the schmooze circuit of awards shows and music conferences. I can’t see him checking out bands at Stubbs at SXSW.

So how did he manage to make a fortune in the music business, anyway? The answer:

Cartoons.

Not exactly the mainstream of the industry. Indeed, it was even less so when Saban got into it, in the late 1970’s. At the time, Saban was managing a young French singer from Israel named Noam Kaniel. The manager brought Kaniel to Paris, taught him French, secured a recording contract and had a minor hit with the artist when he sang the theme to “Goldarak”, a Japanese cartoon series broadcast in France. You can’t get much further from the mainstream music business than that. Yet for Saban, it became the opportunity of a lifetime.

The exposure to the cartoon business allowed Saban to see that a huge amount of music publishing income could be generated by TV cartoons, which are licensed to television stations around the world and played countless times. If you’re wondering what the word “perennial” means, think about Bugs Bunny or the Road Runner, and how many times you’ve seen certain classic episodes– and how many times your kids have seen, or will see them as well. Now, imagine what those generate in performance income from ASCAP, BMI, SESAC, and the other societies around the world.

Quickly, Saban seized the moment and began signing writers to create music as “works for hire”, which he then provided to the cartoon production companies for free– Saban registered the works and took the publisher share (and often the writer share as well). In less than ten years, he was selling the company for seven figures. Small got big and was getting bigger.

It’s a remarkable story, but not an entirely unique one. There are similar tales throughout the music and entertainment industry of people who found a spot in the shadows where they could quietly mint money, while others grabbed the headlines. Actually, the story of Saban reminded me of Clive Calder, the founder of Jive Records and Zomba Music, who I had the good fortune to work for in the late 90’s, before he sold his company for more than 3 billion dollars. Like Saban, Calder found his initial opportunity in niche markets like heavy metal and hip-hop, snapping up the publishing on early hip-hop artists and producers when the general consensus was that hip-hop was unlikely to yield any enduring copyrights. Rap was too small a business to matter much, and even many of the other entrepreneurs that were pivotal in the expansion of the genre failed to see the value of the publishing rights, and focused only on starting record labels.

All of this came to mind when I met this week with Chrisie Santoni, a talented songwriter, performer and publisher. In our discussion about her band and the success she’s had in creating a self-sustaining business around her music, she happened to mention that there was another element to her company which focused on children’s music. As it turns out, she has constructed an exciting new business, Dancing Bears Music, built around her work as a performer and music educator for children– playing shows and selling CDs. Still, I could tell that she was a little hesitant to mention it, knowing that music for children was something that rarely registered on the radar of most music business weasels.

http://www.dancingbearsmusic.com

That’s their loss. The fact that most of the major labels have entirely abandoned the children’s market is incredible, especially since it’s one of the few genres that can still move physical product. People who balk at paying a dollar to download a song for themselves will happily buy a fifteen dollar CD for their kids (especially if it keeps the kids quiet in the car!). Why label A&R’s and music publishers would rather wager money on a buzz band from Brooklyn, instead of a children’s project that could be sold to all the people wheeling strollers around Park Slope is utterly beyond me. But I know that it spells opportunity.

It’s not the only such opportunity out there. Niche markets like world music, foreign language releases, theater music, modern classical, jam bands, soca, dancehall and many others all have the potential to generate big money, and yet fall outside the purview of most major label and publishing A&R people, who are segregated into pop, rock, country, urban, and (maybe) Latin departments.

Of course, there are no guarantees. Many small niche markets never grow much, and others quickly become over-saturated to the point where no one can make any money. Niche markets probably won’t get you a profile in Billboard, or generate a major label bidding war. At worst, a niche market provides a small but steady income with a minimum of risk. At best, it could be tomorrow’s hot new thing, and you’ll be there before anyone else. So never be embarrassed or hesitant to focus your company in areas that the mainstream industry dismisses as marginal. There’s a lot of money to be made on the margins. For small publishers who want to get big– this is where you start.

A quick note in closing:

I want to be sure to let all of you who follow this blog know about my new business: Ask The Music Business Weasel! This is an hourly consulting service aimed at songwriters, artists, and publishers looking for information, feedback, or advice on confronting challenges in their business. The consultation can happen in person, over the phone, through skype, or whatever suits you– but it’s a chance to chat and try to brainstorm about opportunities and strategies for your music career. If you’re interested check out my brand new website:

www.ericbeall.com

If you go to the section marked: consulting, you’ll find more information about the service. Just drop me an email at ericbeall@ericbeall.com, and I’ll be in touch to set something up.

When it comes to rites of spring, the big ones for me are Easter, the arrival of royalty statements, Opening Day, and the ASCAP Pop Awards and “I Create Music” Expo. It looks like it’s that time again. The “I Create Music” Expo, probably the best and biggest songwriter conference of the year, took place last weekend in Los Angeles at the Renaissance Hollywood Hotel, from Thursday, April 22 through Saturday, April 24.

If you’re an aspiring songwriter, or even a well-established one, this is a decade’s worth of education crammed into three days, with dozens of panels on everything from film & television licensing to the international market, interviews with superstars like John Mayer, master sessions with writers from Dr. Luke to jazz legend Kenny Burrell, and listening and critique sessions to allow everyone’s music to be heard.

The Expo is useful not only for the amazing networking opportunity it presents, or all of the information and resources it provides. One of the most important things that the ASCAP Expo does is remind all of us, whatever our level of experience in the business, how many different elements and factors go into making a professional songwriter, and how many skills one needs to really be at the top of his or her game. Success is not merely a matter of songwriting skill, or who you know, or finding the right career path, or marketing savvy, or simple, sheer ambition. It’s a matter of having all of those things at once.

I thought of this as I prepared for my own ASCAP Expo event– a workshop called “The Nuts and Bolts of the Music Business”, which I led on Friday, April 23, from 11:15 to 12:30 in the Grand Ballroom. To all of those who turned out– and there was a big group– thanks so much for all of your support!

The title of the panel was not my own, but rather one that ASCAP has used in the past, and I started thinking about what it really meant. Of course, it refers to the “basics” of the music business– the fundamentals of publishing and licensing, and the various legal and negotiation principles that go along with those things. But it also struck me that “Nuts and Bolts” are essentially tools. They’re things that you use to build something. And the truth is, the things that are necessary to build a career as a songwriter go far beyond a reading of “This Business of Music” and a few sample sync agreements.

So what are the tools that it takes to be effective as a songwriter in today’s music industry? Here are a couple of ideas that you might want to consider. In fact, if you’re going to other events like the ASCAP Expo, you might even want to take a good look at yourself in relation to these tools, figure out where you’re weak and where you’re strong, then try to focus your efforts on strengthening those areas where you feel a little weak. The tendency of most songwriters is to focus all their energies on the spots where they feel most confident. But the point is to be well-rounded, to have all it takes to get to the top. Here’s what you need:

1. An understanding of your audience.

The first thing a professional songwriter needs is an audience. Songwriting without an audience is a hobby. Who is your market? Is it a hip-hop market, made up of young, urban or suburban teenagers, or a country audience of rural and suburban women in their twenties and thirties in the mid-South and Southern states?

And just as importantly as “who is your audience”, it’s important to know “what does this audience want or need from the music they purchase?” Successful songwriters have a very clear understanding of who their target audience is. Sometimes it’s because they themselves are representative of that audience. Other times, it’s because the songwriters have studied it carefully. Star songwriters know exactly what kind of people make up their market and what those people want in the music to which they listen. Beyond that, smart writers know what magazines their audience purchase, what clothes they wear, what TV shows they watch and what kind of cars they drive. If you’re going out hunting bear, it’s a good thing to know what a bear looks like.

2. A network of people.

I’ve yet to see any songwriter actually become successful in isolation– breaking into the big time without any music community to support and nurture him or her. An essential survival skill is to learn how to choose the right people with whom to surround yourself, Your team should include a music lawyer, a representative from ASCAP, BMI or SESAC, possibly a manager, or perhaps an outside publisher. It can go further. If you’re breaking into the urban world, you might want to join forces with a well-known production team. If you’re a rock artist, you need a booking agent. The ability to build an effective team is crucial to the success of any music creator.

3. A strategic approach.

This is where the first two skills meet. Strategy is just the ability to discern what direction to go, and what the ultimate goal is is, then to figure out a way to use your network to get you there. Most songwriters fail because they don’t know where they’re going or what they’re aiming at. Many who may have that knowledge are too shut off from the industry or even their own musical community to be able to find a way to reach their goals. You have to be able to see the destination, find a path, then call upon the people you need to help guide you down the path.

To go to the ASCAP Expo is a positive career move and an aggressive approach to your career. Still, it’s not by itself strategic. If you were to look at the names on the list of panelists in advance and identify the ten key players who you need to meet… then you were to research them enough so that you could ask one knowledgeable, interesting question at their panel… all with the intention of creating a reason to be able to approach them after their panel– now that’s strategic!

4. A demo reel with hits on it!

There’s no better weapon in the war of the music weasels than a hit song. A band with one sure-fire radio single and nine mediocre songs will get signed to a record label long before a band with ten pretty good songs and no single. A songwriter with one song hitting the charts will get a publishing deal faster than a songwriter with dozens of big album cuts. Hit songs are the currency of the industry and if you have them, doors will open and things will happen. Having hits is a sure-fire strategy.

5. An entrepreneurial spirit.

If you went to hear the top songwriters speak while you were at Expo, I can assure you that you will not have heard any of them, including those signed to big publishing deals, speaking like an employee at a company. You will never hear an A-level songwriter imply that they just write the songs and leave the business to someone else. Successful songwriters view themselves as the driving force of their own career– as the CEOs of their publishing companies, their own best song-plugger, and their own toughest critic.

Life being what it is, not every top songwriter has all of these tools in equal measure. Some make up in hit-songwriting ability what they lack in team-building skills. Others let networking, strategic thinking and overwhelming ambition carry them beyond where their talent alone could have placed them. Most importantly, the great songwriters recognize what they’re missing, compensate for it, and then try to improve their weakness by any means necessary.

Opening Day at Yankee Stadium always brings to mind the legendary Mickey Mantle, who along with his rival Willie Mays, was described as one of the quintessential “five-tool ballplayers”– that is, a baseball player who can run, hit for power, hit for average, field his position, and throw accurately. There’s not many of those around at any time. The same could be said for songwriters. The five-tool songwriters are the ones who know their audience, have a network of people on whom to call, take a strategic approach, bring the hit songs, and keep an entrepreneurial spirit toward their business. They were the ones on stage, accepting the ASCAP Pop Awards at the Wednesday night event prior to the Expo.

Tools are a way of making things easier. If you have the right ones and you know how to use them, you can do the job faster and better than you could without them. The ASCAP Expo is an unparalleled opportunity to pick up those tools that you’ve been missing, or that you haven’t yet learned to use. Don’t miss the chance to get your game up to a big league level. If you didn’t make it there last weekend, try to put it on your calendar for next year. There is no better event than this one to learn from the top songwriters and publishers, and to hone your skills in every aspect of the music business.

For those of you who were there– thanks so much for dropping by to say hello. It’s always great to connect with all of you in person…

In the industry equivalent of changing from winter to summer clothes in the closet or re-planting the flowers in the garden, the music publishing biz is in a spring fever of buying and selling, with companies changing hands with a frenzy over the past few weeks. The newcomer with a basket full of cash, BMG Rights, bought up Cherry Lane Music; Bicycle Music grabbed up the TVT masters and songs from the closet of that legendary music company Prudential Securities Credit Corp. (where the catalog had been placed for safe-keeping after being lost in a long-disputed bankruptcy case), and S1 Songs and State One Music, along with it’s money-men over at First State Media Group, were acquired by Chrysalis Music. And of course, that doesn’t even address the rumors swirling around EMI Music Publishing and BMG.

None of this spring cleaning is entirely unexpected. The pressure of the falling revenues in the record industry; the impatience of some of the investors who bought heavily into music publishing several years ago only to find that this seemingly safe and steady business is neither; the credit crunch that set in last year; and the recession’s effect on the advertising, broadcasting, and media businesses that make up much of the music market these days, have all done considerable damage over the long two or three year winter of our discontent. Now, everyone’s wandering out into the backyard, surveying the damage, and getting out some pruning shears and fertilizer to see what gets burned, what can be saved, and what it would take to actually get things growing again.

The interesting thing is that most of the recent acquisitions have not involved the usual suspects. The major companies like Sony ATV, Warner Chappell, Universal and EMI have not been making any big purchases. Maybe they’re saving their pennies for that rainy day when something really exciting goes on the block, like EMI, or a handful of the catalogs from EMI. Maybe they’ve got their own financial pressures, as most of the major publishers’ parent companies have been buffeted by the storms at their associated record labels, electronics companies, or film studios. Nor have some of the most active independent players, like Imagem, been involved in the recent hunting and gathering. This could reflect a desire to consolidate what’s already been acquired before going out to buy more. It could be that the current crop of catalogs for sale just wasn’t all that attractive. Or perhaps BMG Rights, in an effort to get on the map, is buying at a premium price, and simply outbidding everyone else.

So what does all this mean to the music weasels and those who love/hate them? Other than a reassuring statement that life does indeed go on, that even in the deadliest of times there are new things coming to life, or perhaps that there is a sucker born every minute, the spring season shopping spree also confirms a couple of inescapable facts:

1. At the moment, this is a shrinking business when it comes to employment opportunities.

While only Chrysalis has made a public statement about “synergies” and a “reduction in the overall cost base” (which in office-speak means “chopping heads”), it’s obvious that most of these moves will result in a few less weasels on the job. That’s not new news to those in the A&R world, who have seen constant cutbacks both in numbers and in salary over the past years. A word of career advice to those graduating this spring: A&R is not a growth sector. If you think you have an ability to recognize and develop talent, become a manager. Book clubs or festivals. Start your own company. Do NOT spend your time applying for jobs at major record labels or music publishers. It’s like becoming a blacksmith at the dawn of the Automobile Age.

2. Songs last. Companies don’t.

No one purchases a music publishing company because of its brilliant infrastructure, executive team, or efficient operation. They buy ‘em for the songs. Other than the BMG purchase of Cherry Lane, which may have been partly an effort to acquire a North American office and infrastructure, most of the recent purchases and acquisitions are about what music acquisitions have always been about: music. A few years from now, no one other than the people directly involved with the company will remember the existence of S1 Songs. But radio will still be playing Sheryl Crow’s “Everyday Is a Winding Road” and people will be dancing to “Disco Inferno”. Indeed, “Take Me Home Country Roads” and “Leaving On A Jet Plane” had been with Dreamworks Music Publishing (remember those guys?) before Dreamworks went to Dimensional Music and then on to S1, and now to Chrysalis. I rest my point.

3. There are still bulls in the china shop.

As fragile as the music publishing business feels at the moment, with mechanical incomes plummeting, film and television fees falling, performance fees stagnating in the face of dropping revenues at the broadcasting companies, and even the concept of copyright being under attack, the investment community has not given up on music publishing. Or at least not entirely. While a number of investment-backed publishing companies like S1 have long been on the selling block, there are others who have had enough success in the music industry to re-up their financial stakes, and seek out new buying opportunities. Bicycle Music is one of these, as is BMG Rights, which is funded by Kohlberg Kravis Roberts & Co. As is usually the case, alot of money men went into the jungle– a few played sensibly and conservatively and are still standing on solid ground. Others overpaid, over-borrowed, or over-promised and found themselves knee-deep in something less than terra firma.

More importantly though, what does all of the buying and selling mean to small independent music publishers? For most of us, there are no wolves at the door, but no big benefactors either. It’s easy to assume that what’s happening with the bigger players doesn’t impact us. But to do that would be to miss some opportunities that may grow out of the March and April madness. Here are a couple of things to consider:

1. It’s a good time to build your team.

While no one likes the idea of people losing their jobs, the prospect of a lot of idle weasels out on the street could mean a chance for you to pick up a few additions to your own company at a very low cost. While you probably won’t be looking to hire people at their old salaries, you may be able to employ some very experienced people on a short-term consulting basis to help you address challenges in your business, make a few key introductions, or expand into markets where you lack experience. If you need help in a specific area, try putting an ad in the Billboard classified section, or an online posting for “help wanted”. You may be surprised at the people you hear from.

2. Keep an eye out for investors that might be in buying mode, and build your network of music attorneys to help you find them, or them find you.

Now that the economy is rebounding, Wall Street is bonusing, and interest rates are staying relatively low, there will be people with money looking at buying up copyrights. As we said earlier, for all the problems, music publishing still looks like a sound (heh heh) investment to the financial wizards. After all, these are the guys that thought mortgage-backed securities were a great place to park money. At least with music publishing, they can hang out at clubs with musicians and feel cool. If you can find even one or two wealthy backers not afraid to make a modest investment, you may be able to go out and acquire a few solid, proven catalogs or copyrights that will add huge value to your business.

The key to finding either prize (the money-bags investor or the songs for sale) is to build your network, particularly among music lawyers. The attorneys are the ones on the front lines of daily deal-making, and all information flows through them: who’s buying, who’s selling, who’s looking to get into the business and who’s desperate to get out. The more solid and extensive your lines of communication with the music legal community are, the better your chances of meeting a potential buyer, or hearing about an upcoming sale.

4. Sometimes it’s good to be the little guy. Look for writers who want personal attention and service with a smile.

Having been through several purchases and mergers myself, the one thing I can guarantee is that this summer and fall, chaos will reign. Companies who have made big purchases will be faced with the prospect of trying to absorb thousands of new copyrights into their already overwhelmed systems. Employees will be consumed with trying to figure out who their new boss is, and how long he, she or they will be around. And songwriters, faced with the absence of the A&R person that signed them, will be completely lost in the shuffle and be searching wildly for any way out.

If you can offer a well-organized, aggressive, small publishing operation with an emphasis on personal attention, you may be a very attractive option, even to writers with big hits on their discography. In fact, the big writers may be the ones most interested in working with you, as they have less need for a big advance upon signing. Despite what many in the corporate world think, most songwriters are not impressed by big offices or the size of a company. They’re looking for people who understand their music, are as ambitious and driven as they are, and who pick up the phone when they call. That’s going to be hard for them to find as all of these mergers start to overwhelm the companies involved. Don’t underestimate the power of the personal touch.

The real truth about music publishing is that bigger is better only when the company is up for sale– on a day to day level, most songwriters are far happier at a small or mid-size publisher that can focus on them and their music, rather than on the logistical challenge of administering thousands, or hundreds of thousands of copyrights. In truth, most creative executives are happier in a smaller environment as well. And in a rapidly-changing industry in which lean and mean is a necessity, and speed and adaptability are survival skills, many of the light-weights will fare better than the heavy-weights. It’s going to be a busy spring and summer in the music publishing world. My advice is: keep one eye on the action, and the other on the prize. When everyone is cleaning house, they’re bound to leave some good stuff behind…

It occurred to me as I walked the same quarter mile circuit along Sixth Street for the three hundredth time in three days that the primary benefit of SXSW for A&R people is not the opportunity to hear hundreds of up and coming bands in a single four day span. The primary benefit of SXSW for the music weasel is exercise. Instead of sitting around an office all day, the middle-aged weasel is forced to actually walk from place to place, thus ensuring more aerobic activity than most of us have seen in months. Many also seemed to be working on their arm muscles as well, with lots of pouring and heavy glass-lifting to build those biceps.

During Austin’s giant music-fest, it also occurred to me that the only thing sustaining the music industry at the moment has nothing to do with music. The only people at SXSW that brought their checkbooks and actually had money in their accounts were the media and branding companies. Record label A&R were there of course– after all, there were parties with free food– but there were far fewer than in years past, with whole major label teams missing in action. Music publishers were there too, hoping to meet people in the advertising business. Of course, the music supervision crew was in full effect, but unlike the good old days of two years ago, they were no longer the coolest kids in the room. Given the falling revenue at most broadcast companies and the ridiculous glut of music that is chasing the same gratis spot on The Hills, synchronization licensing fees have dropped to the point where even indie bands desperate for a break have realized that there is no pot of gold at the end of the Hollywood rainbow.

The only people left with any juice at SXSW are the magazines, the websites, clothing brands, car companies, or beer companies. Like it or not, music’s greatest value at the moment is as a marketing or branding tool for companies eager to target a very specific, target audience. Musicians of course are eager to embrace what they see as crucial avenues of exposure– meanwhile, the brands view music as simply one more way to attract the all-important but ever-elusive, A.D.D.-addled college and post-college demographic. The music industry may think they’re using the media. But it’s clear from the amount of music being used by the media, advertising and branding businesses, compared to the amount of music actually being sold, that it’s the media, advertising and branding people using us.

Not that there’s anything wrong with that. It’s just that once more, the music industry finds itself a pawn in a game that it doesn’t control, a plight that seems to be the underlying theme of music business history. First it was radio– since the Fifties, the record industry has found itself on bended knee, pleading (or paying) for any favors that the gatekeepers of radio might dole out. Then it was television, with MTV able to extract free 24-hour programming courtesy of the record labels. Make a half a million dollar video, give it to MTV for free, then hope they choose to play that video from among the other fifty half a million dollar videos they received that week. Wow, what a business model.

Of course, the previous decade brought us a new power player in Apple, and once again, the record industry was left at the mercy of a different business, which sees music largely as a means of selling electronic equipment. And now, with the loss of album sales draining any profitability from the business of selling music to the consumer, there’s a new power alignment emerging– and once again, the music industry finds itself a supporting actor in someone else’s play.

Why couldn’t music companies have created Sirius Radio or iTunes? Why could a music company not have diversified into the advertising business? How did Sony, which is an electronics company as well as a record company, manage to get beaten so badly with the iPod? Why do music companies not own music magazines or music websites? Even when someone tries to create some synergies with moves like the Time-Warner-AOL merger, they manage to let the politics of the various businesses impede all attempts to make the companies work together. Only a handful of organizations, Disney being the most obvious example, actually seem to have understood that controlling the means by which the music reaches the audience (the Disney Channel, Disney Radio, Disney Girl magazine, even Disneyland) or the merchandise related to the music is far more valuable than simply finding and developing artists and leaving the rest to someone else.

Just as musicians often seem to have a blindspot when it comes to realizing that there’s more to music than simply the technical level of musicianship, music business types seem to be unable to see that the power lies with those who understand how to use music to attract an audience (radio, television, internet companies and other brands) rather than those who simply discover and manufacture the music. As a result, the music weasels are left outside the Levi FADER Fort trying to talk their way past the doorman so that they can see their own band perform.

Of course, there’s not much we can do now to undo the mistakes of the past. So given this new world order, what can a savvy publisher or songwriter do to make sure that his or her music is a media magnet, that it’s brand-friendly and advertising-attractive? The one thing that even the most short-sighted weasel can see is where the money is– and ain’t in radio and records. Here are four things to keep in mind when you’re making music as a marketing tool:

1. Versatility is not an asset.

The only time versatility is valuable to a musician today is in a wedding band. The rest of the world is all about narrow-casting, about appealing to a specific, definable core audience and being immediately recognizable to that group of people. Take a look at the magazine stand– there are very few general interest magazines left. Most media companies, whatever their format, work hard to appeal to a very specific, specialized audience. That’s what gives their advertising space value. In the same way, when they consider an artist or a band, they don’t want someone that appeals a little to a lot of different types of people. They want someone that appeals a lot to a very specific group of people.

2. Know your audience.

This does not mean being acquainted with everyone that shows up at a gig or having a million MySpace or Facebook friends. It means understanding exactly who your audience is– demographically, emotionally, and financially. What is the age range of your audience? What do they do (school, work, retirement)? What are their hobbies? What movies do they see? What books do they read? What other music do they listen to?

If you can’t define your audience in that way, then a brand, advertising exec, or press person probably can’t either. That means they have no reason to think that you would help them sell jeans or makeup or alcohol or magazines (which of course also need to sell jeans and makeup and alcohol). Bands that work in the Marketing Age have easily identified audiences, which is sometimes more valuable even than the size of the audience, as measured by record sales or downloads.

For those who are songwriters, rather than artists, the point remains the same. If you wish to write for a specific artist, you need to have some idea as to the nature of the artist’s audience, and what that audience wants to hear about. A song will define the person that sings it to his or her audience, so you have to be sure that the song is presenting the artist to that audience in a way they will understand and appreciate. I’m not suggesting you write jingles. I’m urging you to do your homework, and know how the artist for whom you’re writing is trying to define himself or herself.

3. Understand music as fashion.

The branding, advertising and media worlds are not in music for the long haul. They’re not in anything for the long haul. The media business relies on constant change and ever-shifting sands, that’s what keeps it relevant and entertaining. Fashions will change every spring– they have to, because there are magazines and new clothing collections to sell. Likewise, your music, when it’s part of the media world, has to be up to the minute, reflective of the moment, and sonically on the cutting edge. And then it has to change as times do.

There’s no point in criticizing fashion for being “trendy”. That’s the nature of it. It would be like complaining that water is wet. Likewise, there’s nothing wrong with music that’s trendy. But to be effective in this new media world, you have to stay one step ahead of the trends, knowing which sounds are in vogue and which are getting worn out, what subjects are ripe for picking and which ones are past their sell date, and when it’s time to move on and re-invent your whole musical approach. The advertising, media and fashion worlds make the weasels back at the record company look like long-term thinkers by comparison. In this world everything is always changing, and fast. Which leads us to:

4. Seize the Moment.

A music manager was recently telling me about an incredible placement he had just obtained for his artist, which had the young artist featured prominently in a major national advertising campaign for a big consumer product. If this artist had already landed one such huge opportunity, he suggested, imagine how many other brand or advertising related calls were going to come his way, once people saw this campaign?

My first thought was: None. The problem in working with a brand is that it is “branding”– the brand is now identified with the artist, and the artist with the brand. The bigger the campaign, the more “branding” takes place. Once you have defined yourself to your audience, and closely identified yourself with a particular product, it becomes harder, not easier, for other brands to embrace you. Once you’re on the cover of Rolling Stone, you’re not going to get hyped in Brooklyn Vegan. Because advertising agencies or products are focused on using your music to define their brand, it will, by definition (pardon the pun), take you out of the running for many other related products, who don’t wish to share their definition with any other company. In this media/advertising world, you’ll only get a couple of big chances.

That means you have to make the opportunity work for you. If you know that you’re going to be working with a particular brand, or getting a key placement at an important media outlet, then you have to build an entire strategy around that, making sure that you are prepared to use that exposure to build your audience (and database), drive sales (which means making sure music is ready and available) and establish yourself as a key part of the brand’s identity (which means supporting the company in every and any way possible).

This is not like the old music business, where you could tour around without too much planning, and slowly build a fan at a time for as long as it took. These opportunities are windows that open and close rapidly. You have to have your social networking, music distribution, touring and marketing campaigns ready to capitalize on whatever opportunity you get, and be prepared to measure and document the results. You also have to fully embrace the brand, to make sure you hold onto the chance for as long as you can. If it means going to Phoenix to play for a room full of car salesman or softdrink manfacturers one day, then you better do it with a smile. Trust me, it will be far more useful than any conflicting gigs your record company might have put on the schedule.

This week, I’m in Miami trick! I’ll be at the Winter Music Conference and Ultra Fest on Thursday and Friday– give me a shout if you’re down there. Or I’ll see you at the Beatport Party, or the Belvedere Vodka/Sirius Radio Listening Lounge, or…. you get the idea. If you can’t beat ‘em, let ‘em throw you a party.

A couple of years ago, a family member gave me a book called You Will Make Money In Your Sleep. I think it was intended to encourage me to get more than four or five hours a night—a carry-over from my days as a musician and record-producer. That haggard, post-all-nighter look starts to get a little scary when you reach my age bracket. Unfortunately, the generous gift-giver apparently hadn’t given the text much of a look, as You Will Make Money in your Sleep turned out not to be a brilliant get-rich quick scheme or a story of the salutary effects of slumber, but rather an expose of “the financier to the stars”, Dana Ghiaccetto. Ghiacetto was a high-profile investment advisor in the Nineties, who managed to swindle people like Toby Maguire, Michael Ovitz and Phish with that tempting come-on line.

So I admit to a little trepidation when I found out that I would be a panelist at “Music Publishing– Making Money In Your Sleep” at South By Southwest this week:

Music Publishing- Making Money In Your Sleep
Thursday, March 18
3:30pm
http://my.sxsw.com/events/event/606

Thankfully, I’m not providing any investment advice. Or at least, not exactly. Instead, we’ll be looking at ways to try to make your music work for you. That’s a good topic, especially for the singer-songwriters and indie bands that throng to SXSW each year.

As many of you have probably noticed, the downside to the grass-roots, indie approach to making it in the music business is that so much of the work requires the direct involvement of you, the artist and/or songwriter. In this new 21st century business model, you can only succeed by getting out and building your fanbase person by person, show by show, and that means a lot of hands-on work for the musicians. Now, not only do you have to gig continuously, with all the drive-time, set-up and tear-down effort that is an inevitable part of rock ‘n’ roll touring, you also have to book the gigs, sell your merch, coordinate your own publicity campaign in each town, and spend at least a couple of hours on your social networking site, making sure your fans feel connected. And don’t forget to Twitter while you’re at it.

Not only do you need something that will help make you money in your sleep– you need to find the time to sleep. Probably, you are not in the mood to hear that you now need to become a music publisher as well.

But you do. In fact, as I’ve said so many times, you already are a music publisher– you have been since you wrote your first song. You are not only the author and composer of your song, you’re also the music publisher. The problem is that most songwriters haven’t learned to be effective music publishers. Of course, that’s what my book, Making Music Make Money, is all about. My course, Music Publishing 101 at Berkleemusic, goes even further, and provides a week by week guide to setting up your own music publishing company.

Unfortunately, I can’t promise that having your own music publishing company comes without effort. You have to gather the knowledge you’ll need to be effective. You will need to set up the structure and systems necessary to operate the business, administer copyrights, and issue licenses. You’ll have to strategize about the opportunities that exist for your music, and then make the calls to get your music out there. Maybe you can find an intern or a colleague to help you with the day to day operation of the company. Perhaps you can even partner with a larger, already established music publisher, who can take on most of the responsibility for pitching, licensing and administration. Still, there’s no use kidding yourself that this is a small undertaking. At any level, music publishing is a big, complex job.

Nevertheless, here’s my investment advice for the day (and most certainly, the ONLY investment advice you should ever take from me):

Do it. Stop treating your songs as something more than simply the material you perform or record– start seeing them as the primary assets of your business. Stop viewing your songwriting as inherently intertwined with your performing career. Your songs, and your songwriting talent, can generate income on their own. That’s what music publishing is all about. Here are just a few opportunities that an investment in music publishing could yield:

Place your songs with other recording artists. Let them do the touring and the twittering, while you earn money.

Place your songs in films and television shows. Not only does it publicize you as an artist—it generates sync fees and performance income.

Place your songs in video games or other products. The licensing rates are pretty low, but the exposure is ridiculously high. And you don’t have to travel in a van, tear-down or set-up.

Place your songs in advertisements. It’s not only about grabbing that Apple iPod spot. There are national, local and international advertising opportunities that could fund your band’s next road-trip.

Create new music for film/TV libraries, which license “needle-drop” music to a wide variety of media. The sync fees are virtually non-existent, but because these are non-exclusive licenses, the same piece can be used again and again, generating significant performance money.

Write new songs for projects not tied to you as a performer. Of course, your artist career or your band’s development are the priority. But you’re also a songwriter, and not every song has to be for you to sing. There are artists around the country, and especially outside the US that are looking for songs. Why not spend a few weeks a year taking aim at those?

This last strategy was one that our company, Shapiro Bernstein & Co, Inc., and our partner, Tosha Music, recently employed with one of our top songwriters, Marti Dodson, from the Ohio-based band, Saving Jane. When Saving Jane’s first single “Girl Next Door” (Dodson/Buzzard/Goodman/Martin/Misevski) became a Top Forty pop hit, showed up on NOW (That’s What I Call Music) 22, and was covered by country artist Julie Roberts, we knew that Marti had the potential to be an important pop songwriter, and not only for Saving Jane. We suggested that she spend two weeks traveling to Stockholm, which is the pop-song factory for all of Europe and much of America, and the home of many of the industry’s best production and writing teams. Marti’s first trip yielded Saving Jane’s subsequent hit single, “Supergirl” (written with Mats Valentin from Sweden), which was later covered by Suzie McNeil in Canada, who took the song Top Ten in that territory. The song was used as a theme song by superstar auto racer Danica Patrick, gymnast Nastia Lukin, and showed up once again at the recent Winter Olympics.

Through the investment of a couple of writing trips to Sweden, Marti has now had songs cut by artists from South Africa to Germany (where she recently had the theme song to the German Popstars television show). When your songs are being played on TV in Europe, you’re literally making money in your sleep. That’s the goal. And that’s what music publishing is all about.

You can’t be everywhere at once and you can’t do everything all the time. If your business plan is predicated solely on your performance schedule, you will eventually reach the end of your earning potential, because you can only play so many gigs in a week. But if you have an effective music publishing operation, your songs can indeed be everywhere at once, earning money all the time. Of course, it’s not easy getting your music out there or locating the right opportunities. Yet it’s the best investment you can make, as there’s no limit to the ultimate pay-off. Do it right, and you might even be able to get some shut-eye once or twice a week.

If you’re going to SXSW, be sure to catch this panel. Afterward I’ll be at the South By Bookstore, selling some books:

Thursday, March 18 at 4:45pm
http://my.sxsw.com/events/event/8614

Stop by and say hello! See you in Austin…