Music Publishing & Songwriting

Here’s an idea whose time has certainly come:

Music companies have decided to sell music. Not just current music. Not just the hits of the moment. Not just the current hits and the classics. They’ve decided to sell it all.

Turns out that after decades of amassing hundreds of thousands of master recordings– some of them legendary, some serviceable, many of them justifiably ignored, and many of them prized by only a small cognoscenti of music freaks and collectors– the major labels have realized they just might have something of value back there in the archiving warehouse. Something they could sell. Perhaps not something they could sell to a mass contemporary audience, but something that could be sold in small numbers to people who know and love the breadth and diversity of popular music. Given that many current, chart-topping pop releases are selling less than 100,000 units a week, this is most certainly, an idea whose time has come.

EMI and SonyBMG have agreed to pry open the vaults and license their currently out-of-print content to Amazon, through a subsidiary called CreateSpace which specializes in providing on-demand delivery of physical content. Rather than printing up thousands of CD’s of old, hard-to-find recordings and sending them out to record stores, CreateSpace allows the companies to deliver copies based on customer orders. You want that old Hank Mancini soundtrack, or Cake’s “Motorcade of Generosity”? No problem. They’ll make one for you and send it out.

If you’ve read “The Long Tail” by Chris Anderson, then you’re already familiar with the underlying theory. Anderson argues that for too long, the music business has focused on the big hits, while ignoring the money to be made by selling a much wider variety of less-popular, more specialized titles. While I can’t say that I buy into the theory in its entirety (no one’s expecting that the orders for “Motorcade of Generosity” will keep the lights on in the Capitol Records building, or even cover Guy Hands lunch bill), there is certainly some truth in The Long Tail concept. The fundamental truth is this:

The record labels already own the master recordings. They’ve nurtured the artists, paid for the recordings, created the packaging and now they own them. In fact, those recordings are the only things a record company really owns. The office is rented. Employees on their way out will steal the pencils. The primary assets of a record company are (go figure) records. Why not sell them to people that want to buy them?

Once again, record labels seem to be learning something from the music publishing business. Granted, it’s much cheaper and easier for publishers to manage catalogues of thousands of songs than for labels to produce and market thousands of physical albums. But publishers learned long ago that some of those tunes gathering dust in the back of a file cabinet can turn into gold with a little bit of a luck and a timely film or advertising placement. Still, you have to get them out where people can hear them. The beauty of the internet, as well as new methods of manufacturing, is that finding any piece of music, no matter how obscure, need only be a matter of going to amazon.com and checking your mailbox a few days later. If the record companies are willing, the technology is in place.

Of course, music publishers will greet this new label initiative with open arms and open coffers. The numbers may be small initially, but this is an opportunity to suddenly revitalize thousands of old titles languishing in obscurity. New mechanical royalty streams will open up; new people will hear the songs and play them for their friends; new opportunities for film, TV and advertising exposure will invariably arise as forgotten songs and artists are re-discovered.

Of course, a skeptic might call the whole thing nothing more than a record company “fire sale”. Faced with plummeting profits and a major shortage of popular new stars, the labels are now down to selling the family silver. To be sure, record companies need income sources far more significant than those to be had from selling obscure catalogue pieces.

But I say every little bit helps. They say desperate times breed desperate measures. But sometimes those desperate measures are good ones that were long overdue.

To Read More about this Click the Link Below to Read the Article from Digital Music News:

Some careers are so illustrious and varied and full of ups and downs that in themselves they form an almost complete instructional primer in the music industry— Bo Diddley, the singer and guitarist who along with Chuck Berry, Little Richard, Jerry Lee Lewis and Elvis virtually created rock ‘n’ roll, had one of those careers. Having just passed away this week, Bo Diddley continued to perform up until just recently, and his innovations, particularly that signature Bo Diddley beat, will live on far beyond his long and colorful life. If you want to study with a master, here are a couple of things to pick up from the life and times of the legendary Bo Diddley:

1. Rhythm is part of songwriting too.
In a way, it seems strange to point it out– given the rhythmic-orientation of contemporary hit radio. It has become almost impossible to have a major Top 40 hit today with something that doesn’t generate airplay at “Rhythm Radio”, the format that designates what might otherwise be known as pop-urban, from straight-up rap records to hip-hop flavored R&B songs by people like Fergie, Justin Timberlake, Usher, etc.

But there was a time when songwriters were predominately focused on things like melody, harmony, and lyrics, and often neglected rhythmic innovations– and that bias still exists among many aspiring writers. Especially in the singer-songwriter world, as well as for those working in a more adult contemporary style, there is often far to much emphasis placed on things like chord progressions and not nearly enough emphasis placed on matters like tempo and groove. Bo Diddley built an entire career on the creation of one signature beat– a beat that went on to fuel hits like “Bo Diddley” and “Who Do You Love”, but also Springsteen’s “She’s The One”, The Who’s “Magic Bus”, and U2’s “Desire”. In many ways, he is the father of all of the hip-hop-oriented “beat” makers who power today’s contemporary industry, from Timbaland to Danja to Scott Storch and the Neptunes.

2. Songs give character.
Perhaps the greatest gift that Bo Diddley had was that of self-invention. Not only did he create his own beat, he created his own name (and then built a whole song around it), his guitar, his signature sonic sound, and his own character– transforming himself from a young boy from McComb, Mississippi being raised by legal guardians into the sly, funny and supremely self-confident character that the rock ‘n’ roll world all knows as “Bo Diddley”. But part of Bo Diddley’s genius was that he used the lyrics of his songs, beginning with “Bo Diddley bought his babe a diamond ring”, to define himself to his audience.

Too many songwriters forget that for the modern music industry, songs exist primarily to establish artists. One of the most important ways that songs do that is to define their artist– the persona and attitudes contained in the song will forever define the artist who sings them. In light of that function, it’s essential that songwriters learn to think a little bit like screenwriters– trying to create in the lyric not only a story, but also a point of view that will convey to the listener the attitude and persona of the singer. Think of hits like “Girls Just Wanna Have Fun”, “Skater Boy”, “London Bridge”– they tell you more about the singer and who that artist is than any press release or print advertisement ever could. Or just think about “Bo Diddley” and “Who Do You Love”, and take your cues from there.

3. Beware of the Gimme’s.

Sadly, Bo Diddley’s life also offered some fairly good lessons about the music BUSINESS– most of them fairly harsh, and many of them which still elude most artists and songwriters today. Despite being one of the seminal figures of rock ‘n’ roll, Bo Diddley never made the kind of money that even many of his 50’s peers did– and certainly never made what he felt was commensurate with his contributions. You can almost certainly chalk some of that up to the kind of chicanery that was prevalent in the music business of his era, and indeed, that’s where Bo put most of the blame– particularly on his longtime label, Chess Records.

But there was an interesting quote from Marshall Chess, the son of Chess Record’s founder Leonard Chess, in the book “Spinning Blues Into Gold” by Nadine Cohodas. In answering Bo’s frequent accusations about the underpayment of royalties, Marshall points out “What’s missing from Bo’s version of events is all the ‘gimmes’. ” As a veteran of both sides of the music industry, that rings pretty true.

What Marshall Chess is calling “gimmes” are what the modern industry calls “advances”, or even more dangerously “additional advances”. It seems that Bo Diddley had a habit of borrowing heavily against future royalties, taking money from record company in the form of additional advances to pay for everything from cars and jewelry to tours and equipment. Unfortunately, the record company kept much better track of those “gimmes” than Bo did, and would then subtract all of those advance amounts when the royalty payments finally came due. In the best of times, it would lead to some disappointment when the royalty check that Bo received was smaller than what he expected. In the worst of times, when sales of an album fell far short of what was projected (and what was advanced against), it could lead to financial disaster.

So here’s the final lesson of Bo Diddley, which should be absorbed by writers and artists everywhere:

There’s always a pay-back.

Advances are just loans that must be repaid– the more you borrow, the less you’ll ever see in the way of earnings. When times are good, record labels and publishers are happy to keep the money flowing and to loan you as much as you want– and often, much more than you really need. But when times tighten up again, that money will get paid back, and you could be waiting a long time to see your first royalty check.

Keep that in mind before you go and buy your babe a diamond ring with that new publishing advance.

As Bo Diddley said, “I tell musicians, ‘Don’t trust nobody but your mama. And even then, look at her real good’.”

To Read the More About the Passing of Bo Diddley, Please Click the Link Below:

While we’re on the subject of conferences– which we were last week— here’s a new one to check out:

London Calling 2008

This is the UK’s largest music industry exhibition conference and live showcasing event, with over 3500 attendees from 45 different countries. Not too surprisingly, the focus of the conference is on independent music and the future of the music industry– which may be one and the same thing. Definitely an appropriate topic when EMI Records, the UK’s biggest label, is about to lay-off a huge percentage of their workforce (that is, if they can ever get around to it). Should be a great conference, and a showcase opportunity that’s worth considering, even for American bands. Maybe especially for American bands…

That’s because London seems to be one of the last spots on earth with a passion for new music. You can feel it when you’re there– this is one place where people still go out regularly to clubs to see new bands, where new, unique artists emerge with some regularity, and where the industry has rediscovered that music without a TV show or a featured spot in an advertisement can still matter to people. Looking at the artists that have broken out of the UK in the past two years, from Amy Winehouse to Corinne Bailey Rae to James Blunt to James Morrison and now Duffy, it’s clear that UK is in one of its most productive periods in years.

What’s really interesting is that the UK is now breaking not only their own native artists– but Americans as well! The Scissor Sisters have all the cachet of a UK act, having become European superstars virtually overnight. The crazy thing is that they’re not British at all. They’re a New York act that made the journey to England, in search of a more open, responsive radio environment, and an audience that still appreciates a mix of style, humor, and a little camp, mixed in with some great songwriting.

The same is true of last year’s big success story, Mika– another American artist that had to go to the UK to find his true home.

It’s quite possible that this year will bring another example, with the NY singer-songwriter Julian Velarde. After several years of building a following in NY’s Lower East Side club scene, this singer-songwriter still hadn’t landed the label or publishing deal he was looking for. Then suddenly, the British A&R scene started buzzing about him and created something of a feeding frenzy, with UK execs flying across the pond to throw out offers and scoop him up right under the noses of the US A&R community. If Julian’s album is the hit that many expect it to be, there will be some A&R weasels over on Madison Avenue and at Rockefeller Center with some serious explaining to do.

Songwriters and artists have to realize that they are in a global business. Of course, that means that you can sell your records all over the world. But it also means that you can make your records all over the world. If you’re not finding the recognition that you’re looking for where you are, or if your sound is not a fit for radio in this country– there’s a flight at JFK that might solve your problem. It’s worth a trip to see if the grass might be greener on another shore.

How’s this for kicking someone when they’re down? No– this isn’t a blog about NY’s recklessly randy governor Eliot Spitzer, although one can be sure that there was some celebrating last week among the radio promotion chiefs of the various major labels, who were put under investigation by Spitzer several years ago for having paid money to persuade radio stations to add their records (NO! Say it ain’t so!)

But this blog is about screw-ups– the kind that end careers, torpedo once solid companies, and drags an industry into the abyss. Ring any bells? That’s right, kids. This is about the biggest record company screw-ups of all time.

Don’t blame me– it’s not my topic. It actually comes from a recent article in Blender recounting the 20 biggest blunders in record company history (see the link below), which is a little like trying to reduce the history of Chicago Cubs baseball down to the five most disappointing moments. There are really too many to count.

The article manages to nail a few inarguable mistakes (Decca Records passing on the Beatles; Sony deciding to drop from the roster both Alicia Keys and 50 Cent), a couple of minor miscalculations (sure, Berry Gordy sold Motown for $60 million when he should have gotten $600 million, but what’s an extra zero or two to a gazillionaire) and a few debatable decisions (the lawsuit against Napster, and the RIAA’s campaign against digital piracy). It also leaves a few doozies out. But then, how could it not?

My personal favorite (because I happened to be working at Jive Records at the time) was BMG’s failure to include a standard inducement clause in their contract with NSYNC, which allowed the group to leave the label after their first album, and re-sign with BMG-distributed Jive Records. The subsequent multi-platinum success of that group, and Justin Timberlake’s solo project, created an exorbitant price for Jive/Zomba several years later, when BMG was forced to purchase the company for over $3 billion dollars. That expenditure left BMG in a deep financial hole that eventually led to the merging of BMG Records with Sony Music, and the recent sale of Zomba Music to Universal.

It’s hard to say why the record labels make so many dumb mistakes. Most of the people working at labels are smart, music-loving, ambitious people who believe sincerely in what they’re trying to do. The rest are cynical corporate sharks that devour anything or anyone in their path. But even those people are not stupid. Somehow the pressure of chasing trends, trying to predict the unpredictable, and package that which is too ephemeral to be packaged, seems to lead to a collective abandoning of good common sense that is annoying when you’re on the inside, and embarrassing when you’re observing from the outside. Maybe it’s all those late nights, it’s hard to say for sure.

But unfortunately, the madness shows no signs of abating. I had lunch this week with a friend who created an online social networking site– not surprisingly, our discussion eventually turned to YouTube and the recent controversy between a coalition of top artist managers and the major labels. After delaying way too long, the labels finally came to an agreement with YouTube almost a year ago on a revenue-sharing plan that was supposed to compensate artists (and the label) for the use of their content. Now, top managers like John Branca and Irving Azoff are threatening to sue the labels, as their superstar clients have yet to receive any money, or even accountings, from that deal.

Of course, record labels not paying artists doesn’t qualify as a record company mistake– that’s more like business as usual. What struck me at my lunch meeting was my friend’s comment that the managers and artists were waiting for the proverbial Godot. From his insider vantage point, he was quite confident: there is neither YouTube money, nor will there be– at least not any of real significance.

It appears that in their desire to reach an agreement with a company that had become a powerful marketing partner, the labels managed to negotiate a revenue-sharing plan that amounts to next to nothing. This seems somewhat incredible, given that YouTube and similar sites were entirely constructed upon illegal content. One would think that the labels had a pretty strong bargaining position, given that YouTube was inarguably in blatant violation of the copyright laws. And yet, somehow the major labels managed once again to snatch defeat from the jaws of victory, and give away the artist’s work for pennies. If you can’t win a bargaining session with someone who is on the verge of being shutdown for copyright violations, there may be no hope left. Already, the labels are starting to blame the lack of artist royalty payments on “legal costs” that have outweighed the actual income.

And that’s the moral of this story. Unfortunately, there is only one winner in this endless succession of record industry screw-ups. The artists? They’re always the losers. The record companies usually eventually feel the pain as well– just ask all the people waiting for their pink slips over at EMI. The only people that come out as winners in these situations are the lawyers. If a label signs a million-dollar buzz- band that flops, you can be sure that the lawyer got his or her percentage, and has long since moved on to the next big thing. Labels agree to a bad revenue-sharing plan? That’s okay. It still took months and plenty of legal eagles to get there. The cost of record company screw-ups is very high, because it usually comes with an hourly price tag.

Of course, one day soon, we won’t have the labels to kick around anymore. But have no fear. You can be sure that we’ll always have the lawyers.

For the full article from Blender on the Top 20 Record Company Screw-Ups visit:

Blender Article March 2008

A few weeks ago, I gave a shout out to the musical community of Nashville, having been reminded of that city’s vitality as a music center during a recent business trip. A few weeks ago, I hit the road again to visit a town that, at the moment, burns a few degrees hotter even than Nashville:

Atlanta.

Detroit and Motown in the mid-Sixties; Philadelphia in the Seventies; Seattle in the Eighties– that’s where Atlanta is right now. In many ways, it’s the epicenter of pop and urban music in America, with producers and writers like Dream, Sean Garrett, Bryan Michael Cox, and Dallas Austin, along with artists like Cee-Lo, Outkast, Shop Boyz, and Usher dominating the charts. All that success has created a must-go destination for artists seeking that magic production touch, A&R weasels looking for that breakthrough hit song, or publishers searching for the latest up and coming hitmakers. On top of the thriving urban/pop scene, there’s an active rock scene, with artists like the Whigs, as well as a healthy and thriving singer/songwriter world. Having made my way down to the ATL to check out a new songwriter/producer, I soon found myself in the middle of a musical community that is a model for how to build a modern music center.

In Atlanta, the artistic and production community live and work next to each other– everyone has a studio complex where musicians, writers, artists, and managers constantly intermingle. While most people work within a small camp of writers and producers, often associated with a specific company, everyone mixes and matches. They trade ideas, they work on the same projects, they share engineers and musicians, and they compete openly but without malice. Most importantly, they have a solid group of executives, artist managers, studio managers, lawyers and publishers that support the creative people and help to build bridges to other music centers in NY and LA. The moral to this heartwarming story: People need People.

No man is an island. If it takes a village to raise a child, it takes a whole town to build a business. Ask any neighborhood barbecue shop– if you want to be in business, you have to be part of the community.

Probably because we spent too many of our formative years locked away in solitude– listening to records, practicing our instrument or writing heartbreaking poems of love and longing– most musicians tend to be loners. The message from music centers like Atlanta and Nashville is clear: it’s time to become a team player. Your team is the musical community around you: other musicians, writers, artists, publishers, press, fans, radio programmers, independent film-makers, and anyone else who shares a similar direction. This has been a constant theme in the development of American music, from the Memphis rockabilly community that spawned rock ‘n’ roll to the Brill Building in NY, to the rise of West Coast rap. Artists, writers and companies do not develop in isolation. They grow in clusters, supporting and learning from each other.

Of course, everyone is competing with one another as well. That would be hard to miss in either Nashville or Atlanta. Everyone is working on the same projects, chasing the same cuts, and cultivating the same contacts. This is what businesses do– they compete without apology. This is also the benefit of being part of the community– competition invariably makes everyone raise the level of their game. Lack of competition gives you Amtrak and your cable company.

As you try to build your publishing business, it’s essential to start creating not just a company, but a community around you. Hitco Music was one of the early players in Atlanta urban music, and they continue to thrive amidst the scene that they built. No matter where you are, there are likely other people trying to launch similar creative ventures. It’s up to you to find them, and then figure out ways you can work together. By sharing information and knowledge, you’ll start to build something bigger than yourself– and that’s when a musical community starts to take shape. The business pay-off is big– but the personal pay-off is equally big. You just might make some friends along the way. You might also change the lives of the local aspiring artists that come after you.

Here’s an idea: get together four or five local songwriters and just throw a little party. Play some songs for each other– solicit some feedback, criticism or ideas. Find out who is doing what, and what the shared challenges are. Find out who knows who. If you have a good time, try doing it once a month. This is what was happening in NY when I arrived as an aspiring songwriter, too many years ago. That little group of 8-10 people spawned at least five people still active and successful in the industry today. It made me at least four or five friends for life. That’s not a bad investment for a Thursday night.

Maybe it’s time for a little community service.

I told you a couple of weeks ago that a war was breaking out, and now guess what? It’s here. If you don’t know what it’s about, you’d better read up on my recent blog, or study the information below– because what’s at stake will affect your livelihood as a songwriter and music publisher. How important is it? So important that I’m turning over my blog to a letter that was circulated today by David Israelite of the National Music Publishers Association. Read it, tell your fellow writers and publishers about it, and get ready to do battle…

On Monday, January 28, the Copyright Royalty Board (CRB) begins the hearing that will determine mechanical rates for every songwriter and music publisher in America. It will be the most important rate hearing in the history of the music industry because in addition to setting rates for physical products, rates will be set for the first time ever for digital products such as digital downloads, subscription services and ringtones.

The National Music Publishers’ Association (NMPA) will be representing the interests of songwriters and music publishers and will be fighting vigorously to protect those interests to ensure that musical compositions are compensated fairly.

On the other side of this fight stands the Recording Industry Association of America (RIAA) and the Digital Music Association (DiMA). Both the RIAA and DiMA have proposed significant reductions in mechanical royalty rates that would be disastrous for songwriters and music publishers. This is literally a fight for the survival of our industry.

To give you an example of what is at stake, the current rate for physical phonorecords is 9.1 cents. The NMPA is proposing an increase to 12.5 cents per song. The RIAA, however, has proposed slashing the rate to approximately 6 cents a song - a cut of more than one-third the current rate!

For permanent digital downloads, NMPA is proposing a rate of 15 cents per track because the costs involved are much less than for physical products. The RIAA has proposed the outrageous rate of approximately 5 - 5.5 cents per track, and DiMA is proposing even less.

If you find that troubling, it gets worse. For interactive streaming services, which some analysts believe will be the future of the music industry, NMPA is proposing a rate of the greater of 12.5% of revenue, 27.5% of content costs, or a micro-penny calculation based on usage. The RIAA actually proposed that songwriters and music publishers should get the equivalent of .58% of revenue. This isn’t a typo - less than 1%. And DiMA is taking the shocking and offensive position that songwriters’ and music publishers’ mechanical rights should be zero, because DiMA does not believe we have any such rights!

The initial hearing will last four weeks, with the three permanent Copyright Royalty Judges hearing arguments Mondays through Thursdays from 9:30 am - 4:30 pm each day. At the conclusion of the initial hearing, there will be more discovery, followed by a rebuttal hearing in May, and a final decision expected on October 2.

The NMPA will be spending millions dollars in this proceeding to protect the interests of songwriters and music publishers against the much larger record labels and digital media companies. And although we face such an enormous fight, we have an incredible advantage - we represent songwriters, without whom the record labels and digital music services could not exist.

Please forward this to anyone who is involved in the songwriting and music publishing industry. We will be sending out regular updates as the CRB progresses to keep you informed. Through your networks, we hope to reach the vast majority of the industry. If you did not receive this directly, and would like to be added to the master NMPA communications list, please send your contact information to Jamie Marotta at jmarotta@nmpa.org.

As always, we appreciate your support of the NMPA which allows us to wage this fight on your behalf.

David M. Israelite
President and CEO
National Music Publishers Association

Hope everyone had a great holiday! While most music weasels remain sequestered away on holiday, trying to shield themselves from the year-end numbers or the Bahamas sunshine, it might be an apt time for a year-end wrap-up, and some thoughts for the new year. Here’s a start:

Let’s officially declare the Music Business of 2007 a Disaster Area. There’s no way to put a positive spin on this one. Major record label profits are down by as much as 50% from last year, which itself was not exactly a Golden Age. The biggest tours of the year were by artists that in better times would be considered oldies acts. Among the few new artists emerging this year—Daughtry, Colbie Caillat, the Plain White T’s—it would be hard to find anyone breaking much new ground. Even among music fans, there seemed to be more interest in new marketing strategies like the free Radiohead release or the Prince gift with newspaper purchase scheme, than in any new musical trend. You could call it a time of challenges. You could call it a mess. Let’s just call it over. Onward to 2008…

So what can the industry do in the new year to avoid a repeat of last year’s highlight reel? What has to change? Who has to change? And how do we find the solutions to the problems that are draining both the profits and the fun from our industry? My suggestion:

Start with the little stuff. No one is going to solve the dilemma of the 99 cent download or the waning public interest in new music overnight. Certainly, no one is going to do it alone. So in the meantime, here are a couple of suggestions to the musical community—record label executives, music publishers, artists, writers, managers and producers – that we can all undertake on our own. These won’t solve the problem. But they might create an environment in which all of us can do a better job, make better use of our time, and hopefully bring the talents that have gotten us this far to bear on the challenges now staring us in the face. THE MUSIC WEASEL’S NEW YEARS RESOLUTIONS:

1. Stop the bleeding.
However the music business comes back, it’s unlikely to do it in a way that justifies the midtown skyscraper office buildings, private planes, company dining room, and lunch at Mr. Chow lifestyle that the record business seems to feel is part of the cost of doing business. The sooner we cut back expenses, the sooner we can all re-imagine a way to make this industry profitable. The major labels are like a couple of drunks lingering in the empty ballroom on New Years Day. The party’s over guys. It was fun. But now it’s time to go to work.

2. Stop stalling.
Imagine a year where we all quit wasting each other’s time. Where phone calls were returned the first time. Where people actually said what they thought. Where the artist turned up at the session on-time and ready to work, and the producer didn’t triple-book, and the songwriters actually showed up at their writing session.
Where showcases started on time, rather than keeping the whole industry milling around the bar for an hour. Time is running out my friends, because we’re wasting all of it!

3. Start innovating.
This year, let’s figure out what we would normally do—and do something else instead. If we’ve got a hit single, let’s not make a perfunctory and over-priced album. Let’s try another single. Or an EP. If we find a hot new songwriter with potential, let’s do a single song agreement, rather than an onerous and expensive three-term co-publishing deal. Let’s try a few projects on spec, or use some street-team marketing techniques, or play a venue that hasn’t had music in the past, or figure out ways to tie into electronic games, or theater productions, or books, or sports events. The definition of insanity is doing the same thing over and over and expecting a different result.

4. Have fun.
Sure, it’s a job. But it’s a job that is hardly necessary for the preservation of life as we know it. It’s a job that most of our parents told us not to take. It’s a job that we chose because we wanted it, so let’s at least have some fun before they shutter the doors and we all go to work for Steve Jobs. Enough of the corporate back-biting, and “the record label ruined my life” whining, and the anti-technology bickering, and the endless negotiating over contractual points that will be forgotten the minute the deal is signed. Let’s make some music and have some fun. It’s worked before.

All the best for the new year. See you in 2008!

“I have great confidence that we will have the best record company in the industry, but the reality is, in today’s world, we might have the best dinosaur.” Rick Rubin, President, Columbia Records

Having been in Europe last week, I happened to pass by a rack of CD’s in an Autogrill (a sort of European McDonald’s with real food, and a shopping center attached)– and to my wonderment, was actually able to spot the 21st Century dinosaur, right there in living color. Here was a whole section of new album releases by top superstars just in time for the holidays, each available for a mere 25 euro apiece.

Wait. What was that price? 25 euro? Isn’t that the equivalent of almost $40 USD? Like anyone who’s just seen a prehistoric creature rumbling through the shopping mart, I couldn’t help but shout in amazement:

What’s going on?!?

As anyone who’s seen my previous blog, “Water Into Wine”, will note, I’m not a huge proponent of free music, or ad-based models. I think music has a value, and we should be willing to ask people to pay for it. But $40 for a CD? When any 10 year old can figure out how to listen to the whole thing for free with the click of a button? What is our industry thinking?

Incredibly, my wife actually did purchase two new CD’s while we were away, thankfully at a price less severe than 25 euro: the new James Blunt album “All The Lost Souls” and Craig David’s “Trust Me”. While I’m not looking to play music critic, one could politely describe both records as imminently forgettable. They did however bring to mind any interesting question, albeit not a musical one:

Why are we making this stuff?

Not music– I think we can all agree that there’s still some use in that. But why do we keep making 10,12,14 song albums? Just because the Beatles made “Sgt. Pepper’s” back in the Sixties? Because Stevie Wonder made “Songs In the Key of Life” in the Seventies? Because it’s all the industry knows how to do?

This past summer, the Shop Boyz had one of the biggest hip-hop hits of the year, with “Party Like A Rockstar”. On the heels of that hit, they hurriedly slapped together an album, “Rockstar Mentality”, that failed to produce even a follow-up hit, much less any significant record sales. Mim’s “This Is Why I’m Hot” generated an album as well– but not much in the way of subsequent success. Why are we doing this?

What if rather than throwing together an album to capitalize on a hit single, the Shop Boyz or Mims had concentrated on creating just one more hit of the caliber of their initial single, and then selling downloads and ringtones of that new hit? And then doing it again, and again– one song at a time? What if rather than trying to push out an uninspired sophmore album in time for the 4th quarter, James Blunt had put out a reasonably priced, 4 song EP, with one song that actually measured up to his previous hit “You’re Beautiful”? Why keep making albums when there is no indication that an audience wants to buy them, or that an artist actually has enough to say to actually justify a 10 song collection? There is no law that requires this. We can put out any kind of product we want.

I just finished reading Alan Greenspan’s book “The Age of Turbulence”– in it, the former Fed chairman talks again and again about “creative destruction”: the way that capitalism allows old economic models, old businesses, old industries to be destroyed by new, more useful, more efficient ways of meeting consumer demands. It’s time for the music industry to read the writing on the wall at the Autogrill, and put the Long Playing Record album (and its $20 price tag) on the scrap heap– unless an artist’s vision really requires that format, and his or her audience demands it. Otherwise, let’s find new, more engaging ways to package music– ones that are competitively priced, and artistically appropriate.

Like every other business, the music industry is going to have to come to grips with creative destruction. Either we destroy the old dinosaur, and get creative about building a new model– or we watch the old dinosaur destroy a once creative business.

The definition of insanity is doing the same thing over and over and expecting a different result. Please– somebody stop the madness!

As the music industry closes in on what may prove to be the worst fourth quarter in its history, it might seem an odd time for saying thanks. But there’s always room for some positivity, and what better time to take stock of the good news than when you’ve got a couple of days off to eat and watch football. What a great holiday Thanksgiving is!

In that spirit then, here are 5 things to be thankful for (10 would be pushing it– it’s a pretty ugly year out there):

1. Thanks for the ringtones– Never thought I’d say that, but money talks. While I can’t say I’m thrilled that the future of music has been reduced to the sale of 5 second soundbites– at least they pay royalties. Let it be acknowledged that in 2007, ringtones kept the music business alive.

2. Thanks for the adspace– Again, after years of complaining about the inane commercials constantly interrupting the baseball game, I’m now forced to acknowledge that advertising has become a music publisher’s best friend. Here’s to more and more music on Madison Avenue. Feist will second that…

3. Thanks for LA– not the place (I’m a NYer after all). The guy. Among major label presidents, LA Reid at Def Jam/Island seems to be one of the few that still believes in the music business– that means signing new artists, breaking new acts, and making hit songs. While everyone is else is playing defense, trying to see if they can limit the amount of money they lose by hacking the payroll and pumping out reissues, LA Reid is still playing offense, and looking to win big.

4. Thanks for the Old Guys– they’re everywhere. Springsteen has made one of the best albums of the year. The Stones continue to be one of the biggest box office draws in the world. The Police tour proved that Sting has not lost his, uh, sting. Madonna just reinvented the recording artist contract, confirming that she’s a business visionary, as well as a musical and fashion trend-setter. Prince– ditto. And the Eagles have the Number One album. It’s deja vu all over again.

Of course, there’s also the Spice Girl reunion, which is something else entirely…

5. Thanks for the MUSIC. In the end, as tough as it can be, the music industry involves very few life-threatening emergencies and not much heavy lifting. Most of the day is spent just listening to stuff. When I was a kid, I would have been thrilled to know that you could get paid just for listening to or playing music. I still am. Let the industry go where it will. But long live music…

Wishing you all a great Thanksgiving!!

Here’s a recipe for dissension within a band:

Four guys in a group– but only one writes the songs. Happily, one of those songs becomes a huge hit, playing daily on the radio and bringing stardom to all. But look out Johnny, there’s trouble in paradise. When the royalty accounting arrives from the record company, the band is shocked to find that they’ve earned… $0. No payments are due, as the income from record sales, while significant, are not yet enough to pay off the expenses incurred in making the record and promoting it.

Meanwhile, back at the ranch, the one guy in the group who wrote the songs is walking out to his mailbox, where he finds a very large surprise: an envelope from BMI or ASCAP or SESAC. “Oh yeah. I remember those guys”, he thinks to himself, vaguely recalling that he signed a contract with them, but never really understood what they were supposed to do. It now appears that what they have done is to keep track of every time his band’s song was played on the radio and television. In the envelope, there is a very long statement showing the various uses. There is also a very large check, made out to him alone. Indeed, it’s so large that this lucky band member is now buying a new, much improved ranch.

Things are getting very tense on the tour bus right about now…

Here’s a similar scenario for strife within an industry:

Record company pays A&R people to find the band. Pays to make the record. Pays to promote the record. Pays ridiculous amounts of money to get the record on the radio. Then when the label finally bribes so many stations that the record is playing all around the country, the label earns… nothing. Sure it sells a few records (these days, very few). But as far as earning money off the radio play? Nada.

Meanwhile, the music publisher, having heard the finished record a few weeks before release, signs a deal with the primary songwriter in the group. The publisher pays nothing to make the record, and does nothing to promote it. The publisher does however register the song with ASCAP, BMI or SESAC, which means that once that song is playing all over the country, the publisher, like the songwriter, is earning a big, pleasantly plump check.

All of which brings us to: The Public Performance Right for Sound Recordings.

At present, labels and artists have joined forces to demand that they too receive performance royalties each time one of their songs is used on the radio or on television.They are trying to convince Congress to change the rules that require broadcasters (radio stations, television stations, etc.) to pay performance royalties to songwriters and music publishers, but exempt them from paying those same performance monies to record labels and artists.

Granted, the present set-up is a little strange. It’s odd to think that if Rihanna’s “Umbrella” is played 1 million times on pop radio stations around the US, the writers of that song will get paid for each play, but Rihanna, as the artist, will earn nothing. However, the argument has always been that Rihanna benefits from the radio play because of the exposure it offers her– it fuels record sales, concert tours, and her general, all-purpose fame. Likewise, the label benefits from the radio play to help sell albums– that’s why labels spend so much money to get things on the playlist. It’s a quandary for the music industry, for the broadcasters (who would prefer to keep more money, and forgo paying the artists), and for the lawmakers (who have a lot more ties to broadcasters than they do with rockstars or label presidents).

The interesting thing is: the performance right for artists and labels already does exist… in the digital realm. In fact, it was the 1995 Digital Performance in Sound Recording Act, that ultimately led to the current call for performance money from radio and television. In the digital world of webcasters, satellite radio, cable subscriber channels, etc., the user of music must not only pay ASCAP, BMI, and SESAC, but also SoundExchange, which is the performance rights organization for artists and the sound recording owner (i.e. the label).

The fact is, SoundExchange is a pretty cool thing… if only people knew about it. Unfortunately, many labels and performers have no idea that they are earning a royalty each time their song is on satellite radio or a webcast. Consequently, much of the money is unclaimed. SoundExchange can’t find you– you have to go to it and tell them where to send your money.

Am I saying that you should be for or against the performance right for artists? I’m saying, don’t worry about it. Let the big boys fight that one out. I’m saying: GO GET THE MONEY YOU’VE ALREADY EARNED. If you are a label, an artist, a band, or a featured musician on a sound recording that has been used on satellite radio, webcasts, cable tv, or anywhere else in the digital world, go visit the website of SoundExchange today. I just hate the idea of unclaimed money. Go for yours at:

www.soundexchange.com