Happy Together

Sep 28 2011

During the travails of the past decade, when record label turned against downloader and publisher turned against record label and streaming service turned against publisher, the sage music industry commentators have been crying in the wilderness:

“Hold up guys! Remember: we’re all in this together”.

Yea. Right.

I think I might have even said it once or twice myself. But now, it turns out to be true—truer than any of us imagined at the time. As the giant merger wheel gains speed and grinds over anything and everything in its path, it seems we truly are in it together, all destined to be owned by the same uber-corporation, tools of an anonymous international venture capital fund. In a world where everyone is “strategically linked” (i.e. owned), every deal is a 360. Welcome to the new model music industry.

It’s not even the end of September, and already we’ve seen BMG Rights, the giant German elephant in the room, purchase Bug Music—rumors are that EMI will be the next to fall to Hartwig and his gang. Within days, Billboard blared the news of the recently struck “strategic alliance” (it would take a UN sub-committee to define what that actually entails) between Universal Music Group (the world’s largest record label) and Live Nation (the world’s largest concert promoter, artist management firm and ticketing company, albeit with the world’s smallest chairman). Then we also had the unveiling of the most unfortunately named venture of the year, Primary Violator, a merger of Primary Wave Music’s management company and Chris Lighty’s powerhouse Violator Management. If Violator had merged with Universal, would it be a Universal Violator?  I thought the guys at Primary Wave were supposed to be marketers. Name-check, please.

While the relative merits of each deal can and will be chewed over for weeks at Brooklyn Diner, the motivations are relatively clear. BMG is on a buying spree, and they’re doing what any savvy new player with several billion dollars to burn would do—they’re buying up classic catalog as fast as someone will sell it. Contemporary hits come and go, but when you’re investing money, there’s nothing like classic, proven songs to provide a steady cash flow and the musical depth you need for the big ticket sync placements. In that respect, Cherry Lane (Elvis, John Denver) was good, Bug (Johnny Cash, Duane Allman) is better, and EMI (Motown, “Somewhere Over the Rainbow”) is the Holy Grail. It’s a hard strategy to argue with, at least until everyone gets their accounting statements and we see if these guys had any clue whatsoever as to how they’re going to integrate all these separate companies.

The Universal-Live Nation deal was in some ways the most impressive. Lucian Grainge seems to be alone among the major label chiefs in being serious about constructing a comprehensive music company.  The Universal labels are so far out in front of their competitors in this respect that they seem almost to be engaged in a different business altogether. On the other hand, it doesn’t appear that EMI (which will be sold by the time I blog again) ,Warner (which still can’t seem to figure out who bought it and why), and Sony (overburdened with the usual 550 corporate bloodletting and X-Factor auditions) are engaged in much at all. Interestingly, the alliance with Live Nation seemed to implicitly acknowledge that the 360 model had not yet become effective for Uni, and that a fierce, fire-breathing dragon might be necessary to bring Universal’s artist management companies, Trinifold, Twenty First Artists, 5B, and Sanctuary into some kind of orderly place within the larger organization.

With Live Nation heading up the management side, Universal has the leadership it needs. At the same time, it’s an impressive land-grab for Irving, without much firm commitment from him for any real cooperation. (As is his custom). Front Line invests nothing, gets a 50% stake in UMG’s management companies, and agrees to discuss bringing the Madonna album to Universal, but only if Guy and Madonna want to.  Next time, can we please send Irving Azoff in to negotiate the federal budget with the House Republicans ?

By comparison, the Primary Violator deal is a genuine merger, or maybe even a “buy-out”, depending on who you talk with. As such, it may reflect a timely move by Chris Lighty to cash in on an aging artist roster. After all, it’s been awhile since Mariah, P Diddy, and LL Cool J were at the top of the game. It could also reflect that a management roster consisting only of Cee Lo Green and Eric Benet wasn’t exactly the A-list that Larry Mestel had in mind. But most importantly, it is a bold statement by a music publishing company of what a lot of music publishers are starting to see, especially as the real payments from streaming services like Spotify start to come in and they’re missing at least three zeroes on the checks:

Music publishing is not going to be enough anymore.

The numbers are getting smaller and smaller, and even as uses of music climb, the payments are not sufficient to cover the tidal wave of paperwork that goes into collecting and accounting for them. In some ways, it was better when people were stealing. At least we didn’t have to keep track of it. Music publishers are going to have to diversify into other areas, and kudos to Primary Wave for making a bold move in that direction.

Of course, what makes sense for Universal Music, Live Nation, BMG Rights, and the afore mentioned Primary Violator (I love writing that) does not necessarily make cents for artists and songwriters. Not much surprise there.  It’s easy to see the upside for most of the parties involved in the past week’s festivities.  But the creative community would be wise to approach their new adopted family with the wariness of an orphan. Grab the bread if you’re hungry and someone’s offering, but keep one eye on the giver, and make sure there’s an exit nearby. And don’t get attached. Most of these families won’t be together very long.

For songwriters, artists, and independent publishers trying to make sense of it all, here are four quick things to keep in mind:

Music companies are becoming entertainment companies.  This is an inevitable thing.

Lucian Grainge and Larry Mestel are right—no one thing is enough anymore. As I’ve been preaching in this space for several years: publishers, record labels, managers, and booking agents have to see themselves not as part of the music industry, but rather as part of show business.   Not only is the value of music falling, but the intertwining of music with all other entertainment forms, from theater to video games to sports to television talent shows is increasing tenfold. In this sense, music creators are going to have to take some cues from the corporate decision-makers and begin building a network that includes not simply other musicians or songwriters, but game designers, film directors, music supervisors and visual artists. Diversification is not so much a business strategy as a survival mechanism.

Not all companies from one sector of music are competent in other sectors of music. Some are not competent in any facet of the music industry. This is an inescapable thing.

Here’s where creators are going to have to turn up the noise filter to “high” in the next few years. The fact that a company is a proven, known entity in one field, like music publishing, does not mean that they have a transferable expertise in the management business. Simply controlling the best record label does not guarantee having the best management company. If it did, Universal wouldn’t have sought out Live Nation at all.  The merger of two giant messes (Warner & EMI) guarantees very little except one really big mess.

When I was at a major publisher, I heard a similar argument made to songwriters every day—extolling the virtues of a worldwide publishing behemoth with offices in every territory, a film division, a record label, and an electronics arm. It was all true. But it didn’t mention that the UK office hated the New York office, and the country division wouldn’t speak to the Christian division, and no one had any contacts with the film company, and the electronics arm (I kid you not) didn’t even know they had an associated publishing company.  Bigger just means bigger.

The interests of all parties in the music equation do not necessarily align simply because they are all part of the same corporation. This is a proven thing.

Of course, this is the inherent problem within the 360 structure.  A manager is not always an ally of the record label—sometimes he or she is the person to put the screws to the company, albeit with the best of intentions.  A record label may not wish to pay the tour support that a manager demands or that a concert promoter would like. A publisher may not wish to send their artist to their affiliated record division(ask EMI), and a label A&R person is definitely not going to cut every song the publishing division sends over (ask any songwriter).  We are not in fact one big happy family.  We’re in it together, but not in it for each other.

The only person who will take care of you is you. This is a historical fact.

In light of the above, don’t take any advice from a manager, publisher, lawyer or record exec about where to sign, or who to engage until you consider: what’s in it for them?  Are they sending you to their business partner because it’s a perfect fit for you, or for them?

This is not to say that there are not real advantages that can be realized by keeping things “in house”.  I used to work at Zomba Music and Jive Records, the music industry’s best example of that particular approach over the last two decades.  But not all of these new alliances are going to work out. You can’t afford to let your career be the experiment in which two new corporate partners learn, or don’t learn to work together. Lots of people who believe in public schools as a concept send their kids to private ones—because you only get one chance.

Be assured that in a year from now, when your trusted manager tells you that he’s leaving that joint venture that he assured you would be “an incredible opportunity for all of us”, he will regale you with tales of how his new partners “just never got it”.  He’ll be gone, but you’ll still be in that publishing deal for the next three years.

Not only are we not really family, often we’re not even friends.  Whatever anyone tells you, it’s never all for one (except when it comes to BMG’s acquisition strategy). It’s one on one, everyone for him or herself.  Choose your partners carefully, each on their own merits. Not every match is made in heaven.

 

 

 

 

 

 

 

 

 

 

 

When it comes to holding onto a spirit of optimism in the midst of the music business jungle, no one compares to Peter Bliss. He is perhaps the most aptly named songwriter ever (with the possible exception of Denise Rich).

Peter Bliss

Peter has been making music, and helping others make music for a lifetime—he signed his first publishing deal straight out of high school, and released his self-titled debut album shortly thereafter. He went on to write songs for Barbara Streisand, Menudo, Paula Abdul, *NSYNC, and many more, as well as composing music for film, TV and advertising. Over the last several years, Peter has expanded his outreach, from inspiring, challenging, and (always) educating his co-writers (I know, ‘cause I’ve been one), to touching the whole New York songwriting community. Most recently, he was the Professional Activities Coordinator for the Songwriters Hall of Fame. Now, he is working on a new and very exciting project:

The New York Songwriters Collective

As I’ve said so many times in this blog, as well as in my classes and books: there is no way for a songwriter to make it solely on his or her own. There is not even a single example of such a phenomenon. Everyone is lifted to success by others more established in the industry.

If we are to bring the music business back to prosperity, it will inevitably be through bolstering and supporting the network of musicians, songwriters and producers that make up our local music communities. That’s what Peter is doing with his new organization, and I’m proud to be a part of it as well.

In light of that, I asked Berklee’s Jorge Oliveres to quiz Peter about his plans for the New York Songwriters Collective:

What is the New York Songwriters Collective going to be?

The New York Songwriters Collective is essentially a place where songwriters can come to work on their craft in a collective workshop environment, as well as attend networking meetings, meet and greets, and weekend workshops. For example, weekend workshops will be six or seven hours long all over the course of one day. Eric Beall has done them for us in the past and will be doing a special workshop again for us in November.

The whole idea is to have a community for the New York and East Coast songwriters. In the workshops I did at the SongHall, I found a significant number of people who were searching for a way to work on their craft and jump into the New York music scene. There really wasn’t a great deal out there. Other organizations provided showcase opportunities in the city but the workshops with the PROs (ASCAP, BMI, SESAC) weren’t a consistent presence. When there’s something missing, you try to create something to fill the void.

Will the New York Songwriter Collective attract seasoned writers or songwriters who are just starting out?

There may be more than one level of workshop. In the city, there are certain organizations open to all, where you can just sign up for either an intensive one-day or ongoing beginner classes. In the case of the Collective, I will probably have people submit music, so that we can put an effective group together. By listening to people’s material before we pick the groups, I can gauge everybody’s ability. By listening to a song or two, I know what the strengths and weaknesses of the person’s particular craft are.

The idea is to put people together who can help each other. Over the course of eight weeks, it’s very interesting to see how people gravitate toward each other just by listening to one another’s music. We want to create an environment where creativity is maxed and where songwriters spend their energy on the songs that really matter. That means focusing in on exactly what people’s strengths and weaknesses are. We have to show them how to maximize their strengths, and compensate for their weaknesses through collaboration with other writers or producers.

The first workshop is going to be for people who have already attended workshops in the past or show a certain merit or skill in their writing up front. Because we will be putting these people together with A&R and publishers, it’s important that these songwriters are professionally ready to have their music presented to the industry.

Is being in touch with A&R people and publishers an opportunity to learn from their expertise or is it also an opportunity to show them music?

If we bring industry professionals in as guests from the A&R, music publishing, and music licensing world; immediately we are breaking down the barrier between the artistic and the business side. As a songwriter, you can hear straight from the horse’s mouth what kind of songs people are looking for.

Everybody talks about how no one accepts unsolicited material. What we all need is an opportunity for songwriters and publishers to meet, so that executives can put a face and a personality to the music that they hear. In workshops where eight or ten writers are in a room with an A&R or a music licensing person, there’s an immediate contact and impression that is made. In some cases, I can act as an agent in between the writer and the industry person, to make sure that material gets heard, without the industry person feeling inundated.

I read that some big names, like Lady Gaga, were involved with the Songwriters Hall of Fame before they were famous.

Well Lady Gaga had been involved with the Songwriters Hall of Fame very early on. I’m not sure if she actually attended workshops. But, back in the day, Stefani Germanotta–that’s her real name–was an 18 year old kid who was looking for open mikes and places to play. The Songwriters Hall of Fame was active in sponsoring open mikes and showcases and she was part of that whole process. There are videos of her performances, and it’s interesting to see her progression. It’s very heartening to see that talent emerge over the years.

It’s also kind of nice to think that a superstar like her was like everyone else; an unknown songwriter just trying to be heard.

Songwriters are a strange breed. Songwriters tend to sit in their rooms by themselves or walk down the street singing to themselves. In the old days they might have put you in an institution for doing that.

Everything that was a hit started in a room with a single person or a bunch of people shooting ideas back and forth and seeing what flies. Every song that Barbara Streisand, Celine Dion, or Beyonce sings starts out with somebody coming up with an idea that just sticks against the wall and I think that’s the beauty of it.

Whether you spend a few dollars in a workshop or hundreds of thousands of dollars at university levels, nobody can guarantee that you’ll be a hit songwriter but everybody has the potential to gain the skills of the craft. We make no promises. Nevertheless, we’re certainly there to help you along the way.

If people want to find out more about the New York Songwriters Collective or are interested in signing up, where should they go?

I think it’s important for them to go to my website www.peterbliss.com so that they understand who I am and what I bring to the table. There will be a website coming very shortly at www.newyorksongwriterscollective.com and if they’re interested they can send an email to newyorksongwriterscollective@gmail.com. The New York Songwriters Collective is very young, but by the last week of August, we hope to have a set of workshops already scheduled and we’re going to start by doing a bunch of free meetings.

Many people are announcing the death of the music industry–I am not at all on board with that sentiment. I’ve never felt more optimistic about the music industry’s future now that everyone is embracing the changes that are coming with streaming and digital sales. There are so many more channels on TV and more outlets where original music is needed.

Songwriters need to avail themselves of these new opportunities. You’re not going to find much old school thinking at the New York Songwriters Collective. It’s all about new school. But the song is still key. Everybody is still looking for something that they can listen to and love. That’s what songwriters do, and they’re always going to do it.

Follow me on twitter @EricBeall

Having vowed to keep the blog positive and focused on the new developments that could actually save the industry, I’ve decided to do what any cynical old music business weasel would do:

I’m calling on people younger and smarter than myself. (Doug Morris—wake up from your nap and take note.)

In what may be the best marriage yet of music and social networking, turntable.fm debuted this summer to rave reviews. One of those instant fans was my A&R colleague at Shapiro Bernstein, David Hoffman. Having educated our office on the endless possibilities of this new service, David recently sat down with my Berklee intern, Jorge Oliveres, to share the good news—two young guys looking at one exciting new facet in the future of music:

turntable.fm

Turtntable.fm is a virtual nightclub in which users are the DJs. The website is divided into “rooms” that play different styles of music. Users can chat with each other and bob their avatar’s head by clicking an “Awesome” button if they like the song that is being played or they can click the “Lame” button that, if pressed by enough people, skips it. DJs can choose the music they are going to play from a huge database or they can upload it themselves.

David Hoffman, Director of Creative Services at Shapiro Bernstein & Co., Inc., began using turntable.fm since soon after it was launched and he is extremely excited about its potential. I had a chance to talk to David about all the opportunities a service like turntable presents for both music publishers and songwriters.

David Hoffman

I heard you are very interested in turntable.fm.

I’m interested, almost slightly addicted to it. Probably a month ago now, a good friend of mine who is also in the music industry and one of the most knowledgeable music people I know, emailed me about turntable.fm. He said, “You have to check it out.” He’s also a DJ and I have, from time to time, guest DJed on his show–so we know each other’s music tastes pretty well. When he told me to check out turntable, I went on it immediately and was hooked. The next day I came to the office, stood up in front of everybody and was like, “You have to check out turntable.fm!”

I follow the digital music industry and the future of the music industry through blogs and reading up on the trades, and this, turntable.fm, [represents] the potential that I see for the new cloud services that are coming up. Hopefully, it’s something that will stay around for a while. Even if it doesn’t, it will show the potential of how great music discovery can be with the right website and the right digital tools.

What do you think of the legal implications of turntable.fm? I was reading that right now they claim they are protected under the Digital Millennium Copyright Act.

Like Pandora, and a few other services, they are operating under the DMC Act of 1998 that allows Internet radio to exist as long as it operates within the confines of the law. If you spend a lot of time on turntable.fm, you’ll notice that there are some interesting little rules that they don’t tell you are rules. For instance, if you go into a room, you can’t listen to music just by yourself. As with Pandora, if you want to hear the latest Beyonce single, it’s not necessarily going to play that first; it’s going to give you other music. That basically limits the listener to what is now Spotify. [On Spotify], you call up the song and listen to it, but Spotify is a service you have to pay for. Right now you can get it for free if you have an invite, but eventually you’ll have to pay. There are other rules too: you can’t play an artist more than a certain number of times in an hour.

Last week turntable signed agreements with both ASCAP and BMI. That’s really great news because I think a lot of these services didn’t originally sign with the PROs because they figured they didn’t have to. Turntable.fm signing with them is a big step in the right direction.

I think the only problem they’ll have moving forward, and it’s a big one, is the fact that you are able to upload your own music onto turntable.fm. That’s where the waters get a little bit muddy. If I create a mashup of a song and I don’t get permission from the publishers to create that mashup, that piece of music is technically one big copyright infringement. I’m able to upload that song and play it for people, and I believe once you upload a song to turntable.fm, it stays there. And those are the most popular rooms–the ones that play these mashups and remixes.

It’s going to come to a point where they’re going to have to do some licensing like Apple has done with the cloud services and Spotify has done. I hope they can really get it together. I also hope that the music industry realizes the strength of turntable.fm. I think they do.

What do you think is its potential? How could publishers take advantage of this?

Publishers can take advantage of it in a lot of different ways. Number one: for music discovery. It used to be, back in the day, music lovers would go to record stores. You’d go to a really good one (for me it was always some of the Ma and Pa cool shops or going to the Tower Records on West 4th Street). You’d go in and just thumb through the records. If I was into jazz that day I’d go to the Miles Davis section and say “Oh, wow, this is a CD I hadn’t seen before,” an interesting import CD or something, and I’d buy it. For music discovery [today], aside from word of mouth and what you read on blogs, the organic element of actually discovering something for yourself is kind of lost.

Turntable is the perfect place [to recover this] because you’re combining word of mouth (you’re learning from someone that you’re virtually meeting or someone that you know because they’re on turntable) and you’re listening to it. You’re talking about the music, you can link from it, and that, from an A&R perspective, is the closest thing to that original sense of discovery.

As publishing companies seek out talent, they can go into the cool room on turntable.fm, figure out who the DJs are going to be, and actually listen to it, learn about it and be on stuff before anybody else. I can’t tell you how many bands I’ve heard on turntable that I’d never heard before. When you are in a great room and the DJs are really going with the vibe, there could be a song that may not be your favorite song if you just heard it out of context. But when you hear it within the context of songs that are along the same vibe, [it] makes a big difference to someone who has a good ear for music and is out there to scout talent.

Not only publishers, but also record labels, managers, publicists, booking agents; everyone [can take advantage of this] to promote music. There was a band who was inviting people to a turntable.fm room for a listening party to debut their new CD. If one of our artists or songwriters has a new album or a new song, instead of sending out random emails or taking every music supervisor out to lunch and handing them a CD, I can invite them to a turntable.fm room. I’ll know if they’re there or not, see that they’re bopping their head, thinking it’s “Awesome” or not, and I can actually talk to them about it within the chat room. You’re basically creating a virtual listening party. I think that more and more bands are going to take advantage of it, and I think publishers will as well. There’s definitely the potential to have music supervision and A&R rooms.

I was also wondering about the potential it has on the other side, for emerging artists. Do you think it’s a good platform to promote new music?

I think it’s one of the best platforms. Whenever I speak on panels, people ask, “How do I get my music into the hands of the gatekeepers?” I say, “The best way to do it is to give it to someone who knows that person.” The analogy I like to use is [this]:

I’m in my apartment in NY and I hear a random Chinese food menu come underneath my door. It’s from the local Chinese place and I’ve never heard of them before. I take it and throw it out. But if Eric [Beall], my colleague, says to me, “Hey, this great new Chinese place opened down the block from me, you should check it out, ” I’ll probably go there the next day.

I take pride in listening to most stuff that comes to our office. But if I’m learning of music because I’m getting a random email, I’m thinking “OK– most of the stuff that comes randomly is not very good.” But if I’m learning of the music at turntable.fm from someone I know, or even someone I might only know virtually, it’s a different situation. If they’ve played a few good songs that I liked, and they say “Check this out,” I’m going to listen with open ears.

It seems like a really cool blend between social networking and music. I’m surprised something like this didn’t come out before.

I agree with you. It’s such a simple idea. Yet the potential is massive. Think about colleges. Since it came out in the summer, it hasn’t made its impact on college yet. Once the fall semester starts, you’re not only going to be at a party and listening to awesome music— you’re going to be playing the music. You’ll bring your laptop, we’ll get up on turntable.fm and start our own room. And while we’re partying, we’re also going to be DJing. If I were in college, I’d probably do that about 14 hours a day.

Right now [turntable has] limited capacity to 200 people [per room]. I think that will eventually expand. It’s going to become more like satellite radio. It will be an Internet radio station playing in the background, somewhat like Pandora because you’re choosing your overall theme, but more like satellite radio or traditional radio with great DJs. In fact, you might personally know the DJs.

What about when turntable has an application? What about when automobiles are wired with wifi? Once it’s on your phone and you’re able to DJ on your commute to work, you’re going to say, “This is really tremendous.” There are so many ideas I’ve been reading about, like an external “Awesome/Lame” button. You can be hosting a cocktail hour and secretly, in your pocket, hitting ”Awesome”.

Also, the link with Spotify is fantastic– turntable and Spotify go together like peanut butter and jelly. You’re discovering [music] and immediately clicking the Spotify link so that you can learn more about the band later. When you’re DJing, you can call up and research songs on Spotify—it’s a better interface than turntable for that.

Turntable.fm is the first thing in a really long time that’s made me very excited about music discovery. Instead of being an old curmudgeon saying, “Back in the day it was so much better,” this is the sort of thing that [has me] thinking, “Wow, this is amazing!”

David Hoffman is the Director of Creative Services at Shapiro, Bernstein & Co., Inc., one of America’s oldest independent publishing companies. At Shapiro Bernstein he is an A&R rep, TV/Film/Advertising placement person and song plugger amongst other things. The catalog ranges from classics including “In The Mood,” “On The Sunny Side of The Street” and “Ring Of Fire” to current hits by David Guetta, and current indie-darlings Savoir Adore. David is also a music supervisor who has worked on indie films like “Still Bill” a documentary on Bill Withers, and advertisements for Apple and Puma. Prior to becoming a full time publisher, David was a professional drummer with the popular instrumental jazz/funk/jamband ulu, touring upwards of 220 nights a year. Before hitting the road, David worked at BMI and Giant Step Inc.

David has been a featured speaker/panelist for CMJ, ASCAP Expo & ASCAP Night School, AIMP and others and DJ’s regularly on EastVillageRadio.Com.

Follow me on twitter @EricBeall

Hello Mr. Brightside

Jul 25 2011

I’ve been waiting about 5 years to write this particular blog. I can’t say that it’s done with total confidence. Like a person in the desert finding a fresh pool of water just ahead, I’m a little afraid that what I’m seeing is just one more mirage. It’s not written with much joy either. There are far too many talented music people, on both the creative and business sides of the industry, who are still out of work to unabashedly celebrate the moment. But with all the caveats and caution, I still think it’s time to go on record:

There’s light at the end of this deep, dark tunnel that we’ve been in.

After almost a decade of what has seemed like irreversible decline in the music industry, with each year bringing declining sales, more consolidation, less creative growth, and a growing irrelevance in pop culture, we might finally be turning things around. Over the past several months, there’s been not just random bits of good news, but an emerging pattern that would seem to indicate, dare I say it, positive momentum for a recovery that can reinvigorate the record labels, publishers, artists, songwriters, producers, live industry and all the thousands of other music-related businesses that have been suffering through this long slog through the wilderness.
Here’s a few of the things that have weasels smiling these days:

• The emergence of new technologies that are legal, licensable, and viable – and fun to use!

The appearance of Spotify, Turntable.fm, and iCloud, along with the continued growth of services like Pandora are showing that it is possible to make music available in a way that’s attractive and profitable. Of course, there will continue to be winners and losers in what seems to be an ongoing story of overnight sensations and quick, brutal endings (say goodnight, MySpace). But the convergence of streaming services and social networks, and the cooperation between labels, publishers and technology services in making the music available legally, is a model for a more promising future.

• A growing government concern about piracy and illegal file sharing.

I’ve been predicting it for years: once the technology of file-sharing reached the point of endangering the movie and television industry, we’d start to see a change in the US government’s willingness to step in and get involved. The truth is, politicians couldn’t care less about the music industry. It’s too small, too controversial, too disorganized, and too youth-oriented to matter, and as a result the industry has lost virtually every battle it’s entered, whether it with the broadcasters, restaurant and bar owners, or internet service providers (ISPs).

The movie business is a whole different animal. It is the big dog of American entertainment, and the companies that are built on movies, like Disney, Viacom, and Universal Pictures are among the crown jewels of the American corporate world. Now that they’re being threatened by illegal file-sharing around the world, the US government is sending signals to internet service providers both here and abroad that they will be held responsible for copyright violations occurring on their networks. In return, ISPs are showing a willingness to consider some type of punitive action toward consistent copyright violators, as well as a surcharge that would compensate rights holders. Thanks to Hollywood, what was deemed utterly impossible when the music industry asked for it five years ago is starting to look like a reasonable compromise.

• The revitalization of the CD catalog business.

Again, I’ve been at this one for awhile now—in “Living In the Past Beats Dying In the Present” I used the example of the German music market to argue that the short-term future of music was “selling old product to old people”. With its new $5 CD program, Walmart is taking that formula to the bank, selling CDs of classic music to older, mainstream consumers. Not surprisingly, it’s revitalized the catalog business, which especially for major record labels, is absolutely essential for a return to profitability.

• The opening of China.

This week brought more good tidings from abroad, where it appears that a consortium of the major US labels, called One-Stop China, and Baidu, China’s primary online Google-equivalent, have reached a deal that will allow Baidu to provide users with free ad-supported music streams. In turn, Baidu will pay the labels and creators of the music, as well as crack down on illegal sites that infringe copyrights. While it’s unlikely to generate any significant income for 5-8 years, this first crack in the Chinese fortune cookie could be a massive long-term step toward breaking into a potentially massive market of consumers. The prospect of monetizing markets like China, India, Eastern Europe, and Southeast Asia has been one of the primary factors fueling the hedge fund interest in purchasing publishers and music catalogs. It now seems that may have been right.

• The success of Adele.

Doesn’t seem right to discuss a resurgence of the music industry without even mentioning music itself. Given the divergence in tastes among any random group of listeners, as well as the constant creative rise and fall in each different musical genre, it’s possible at any time to make an argument for the proliferation or the imminent demise of “good music”, whatever that means. Still, one has to take note of the fact that just this year, Adele has sold more than 5 million copies of her album and set the record for the longest stretch at #1 of any female artist. Those kinds of numbers weren’t supposed to happen anymore in our post-album, singles-dominated, market-fractured, ADD-addled music world.

Adele

But the fact that it was done by a real singer who is neither a fashion model, television star or an ongoing gossip-column soap opera; who is not a winner of any TV talent contest; who doesn’t rent her music to advertising campaigns; who doesn’t Twitter; whose music is not aimed at Top 40 radio trends—these are signs that can’t be ignored. Add in other new artists like Mumford & Sons and Florence & The Machine, and one begins to sense a shift. This is not to demean Katy Perry, Kei$ha, or Rihanna, all of whom make great pop music for a demographic that loves and lives that kind of music. But it means that there are alternatives, and that there is more than one audience and one road to building a very substantial, and lucrative business around your music.

Of course, it would be foolish to ignore the equal number of warning signs flashing in the distance, or any of the huge potential pitfalls that could easily derail the resurgence of the music business:

• The major labels continued reliance on over-age, tired, and narrow-minded chief executives

• The brewing meltdown of many of the world’s performing rights and mechanical collection organizations

• Our continued inability to update and streamline copyright law to keep pace with technology and globalization

• The inescapable reality that music is no longer a primary pillar of youth culture, but rather shares that role with social networking, gaming, fashion, and a million other diversions

Yet even some of the worst news in the business, like the mass layoffs at Universal Records, or the continued consolidation of the major labels, has a positive aspect. At least it shows people making changes that in many cases were either inescapable or long overdue. Restructuring an industry is never pretty, and much that’s good is inevitably lost in the slash and burn of clearing the way toward the future. Nevertheless, it has to be done.

There is a time for criticism, and this blog has often pointed out the looming problems, mis-direction, or just plain dumb decisions throughout the music industry. But there is also a time for letting positive energy feed upon positive energy, re-establishing a sense of optimism and untapped potential. This business was never easy, nor was it meant to be. As I said in last week’s blog: the only thing that can truly kill you in show business is cynicism. Once that deadly element sets in, it’s over.

As we head into the 4th Quarter of 2011, this blog is going to try to focus on the good news, and what we can do to take advantage of the positive developments in the music business. With the help of my standout Berklee intern, Jorge Oliveres, I’m also looking forward to highlighting some of the people who are making new things happen, or who have a particular expertise that can help music publishers and songwriters exploit the new opportunities we’re seeing.

I think we’ve finally turned a corner in the music business. Now, it’s time to step on the gas and head toward that light at the end of the tunnel.

Follow me on twitter @EricBeall

Try Try…Try Again

Jul 15 2011

It’s become the ultimate music awards show cliché: a twenty-three year old pop star telling aspiring musicians in the crowd to “never give up on your dreams”, as if Joe Rockstar’s three or four year climb to stardom offered irrefutable proof of the inevitability of hard work leading to success.

Of course, such advice overlooks the simple statistical fact that the career dreams of most musicians and songwriters do not in fact come true. The reality is: many people play dead-end gigs night after night to make ends meet, sure that one day their labors will lead to a record deal or a publishing agreement, or a big breakthrough moment—and it simply doesn’t happen. Most people who get the major record label deal put out one failed album and disappear. Most songwriters with publishing deals don’t write a hit. That’s not negativity. It’s just the numbers, and it always has been. In many cases, people might have been better off to give up their music career and focus their efforts somewhere more suitable for them.

And yet…

And yet, those of us in the industry who come in contact with the success stories know that one of the most common defining factors among the people who find not momentary, but long-term career success in the music business is indeed a grinding, relentless, near-obsessive determination that simply refuses to accept defeat. Successful artists, songwriters, and producers do not give up. Neither do successful managers, A&R people, or label owners. It is the one common trait between a wildly diverse population of creative types and music weasels.

So how does a young musician or songwriter reconcile the need for determination in the face of overwhelming odds with the equally necessary need to face reality? It’s a question that has been in the back of my mind since the day I started in the music industry. I haven’t had a day since without it spinning around my psyche. In all honesty, I hope I never do.

That’s because the two qualities, determination and realism, are only helpful when they’re closely intertwined. Without a balance of both qualities, you can be assured of either rushing headfirst off a cliff, or throwing in the towel without realizing you’re only inches from the goal. It’s true that you should never give up. But doing the same damn thing over and over is not going to work either. You need determination all right. But you need to be realistic about what “determination” actually means:

Determination is an endless capacity for reinvention.

I thought of this yesterday, when I saw a particular new act break into the Top Ten of the Hot 100 for the first time. We’ll leave the name of the band out of it, to allow for more candor in recounting the story.

I first met the lead singer and chief songwriter of this band when he was still a teenager—he played and sang in my office, with unshakable confidence and undisguised ambition. He was clearly talented, but not yet ready to sign a publishing agreement. I didn’t sign him, and no one else in the business did either. Several years later however, he had grown both as a person and as a musician—and he did get that publishing contract, which subsequently led to him forming a band, toughening up his sound, and starting to record some demos.

Fast forward another 12-24 months, and those demos began to attract interest from managers. Soon the young band was being represented by two major industry veterans, who were able to secure a major label record deal for their clients. Now this project was off to the races—only about four years after that initial office performance in my office.

Once the band had finished recording their debut album, the label sponsored another showcase, this time at a major venue in NYC, and I had a chance to see the band a second time. While the depth of talent in both the songwriting and performance were obvious, the show didn’t sell me on the group. I felt they were a little too derivative and not terribly convincing, and definitely not packing a breakthrough first single. When the single came out several months later and quickly disappeared, I felt confident I’d made the right call.

Given the current propensity for record companies to drop an act at the first failed release, I was surprised to see the band get a second chance with a follow-up single. Most of this I attributed to their high-powered management team, who had clearly pulled some favors and issued some threats to give their act one more opportunity to grasp the brass ring. Still, even that power-base wasn’t enough, as the second single did even less than the first, garnering almost no radio action and little label support. Right around that time, I was given another opportunity to get involved with the band on a publishing level—and once again, I passed. When the president of the label and the Sr. VP of A&R, who signed the act, both left the record company, the demise of this particular band, after five or six years of local gigs, recording, showcasing and touring, seemed inevitable.

So imagine my surprise when several weeks ago the group’s new single, a third attempt at breaking through to radio, suddenly leapt onto the Hot 100. I was even more surprised when I heard the record. The band had radically shifted their sound and visual image toward a younger demographic. It worked immediately, and continues to build into one of the major success stories of the year. The band’s success is not only a testament to their talent, but also to their determination, and the determination of the business team around them. They never, ever gave up.

But they did adapt. In fact, their determination did not result in a refusal to change—their determination was expressed through their constant willingness to change. I’ve seen it through personal experience with artists and songwriters ranging from The Script to the Jonas Brothers to Stargate to Billy Mann. The kind of determination that wins in the music industry is the kind that never stops looking for a new angle, a new approach, or a new audience. Playing the same songs in the same city to an ever-dwindling number of the same people year after year is not determination. It’s futility. If you look at the careers of show business icons like Frank Sinatra, Elvis, Madonna, Tom Jones or U2, they are filled with an endless capacity for reinvention, and a conviction that there is always another way to get to the top.

The Jonas Brothers

Every artist or songwriter meets obstacles along their career path. Many of them vow never to give up—and don’t. Unfortunately, most of them fail, because they simply repeat the same mistakes again and again. The ones that succeed are like the best competitors of any kind—they simply refuse to lose, and will try everything until they find what works. Here’s four tips to keep in mind:

1. Keep an eye on the scoreboard
Anytime you’re on the playing field, you better know the score of the game, because you play differently when you’re behind and when you’re ahead. The most deadly danger is to tell yourself that you’re winning when you’re not. It’s easy to convince yourself that you’re making progress–gaining fans, building a network of contacts, refining your sound—when you’re simply standing still. Set measurable goals. Monitor your results. And be honest. If it’s going nowhere, admit it. Just because you’re behind, it doesn’t mean you’ll lose the game. But it does mean that you better be prepared to change something.

2. Change the team
Almost every great band has a member who never quite made it the distance (right, Pete Best?). If one member of the team, whether it’s a musician, a manager, a publisher or a record executive, is holding everyone back, then there has to be a change. Sometimes even the best people get stale, especially after a run of success. Look at how Madonna has switched producers or how songwriters like Billy Steinberg or Max Martin have found new collaborators. It’s never easy to do. But you have to find the chemistry that will make magic.

3. Change the field
Music is fashion, and like all pop culture, it’s constantly changing. Production sounds come and go, whole genres of music transform themselves, audiences grow older or are replaced by a new generation of listeners. Whether it’s Elvis going to Vegas, Darius Rucker going from Hootie to country star, or Rod Stewart transforming from rocker to crooner, you have to be willing to meet your audience where they are. Sometimes that means changing styles, genres, or geographical territories. Go where the grass is greener.

4. Change the strategy
Coaches put their game plan on a chalkboard, not a stone tablet. That’s because it’s inevitably going to change, based on how things are shaping up on the field. I recently signed a songwriter who had her first big cut in Nashville this week. She started as a pop singer, moved to Nashville as a country artist, got a few breaks as a songwriter and finally went with that. It doesn’t mean she’s given up her hopes of being an artist. It just means that she took her breaks where they came, and changed the plan as necessary. It’s only about winning.

5. Change the game
Kara DioGuardi went from songwriter to media personality to A&R person. Justin Timberlake went from artist to actor. Will Smith was a rapper once upon a time. Bono went from rock star to international political crusader. Sometimes the best thing to do with your musical talents is to blend them with your other skills, and use them to add a different dimension to a whole new field of work. Whether it’s in the entertainment or media business, education, music therapy, politics or technology, there are other places to bring your talents to the world, outside of the narrow definitions of the music industry.

In the end, the only mistakes I’ve ever seen that are career-ending are cynicism and bitterness. As soon as those elements set in, all is irretrievably lost. For most of us, no one suggested that we should get into the music business. In fact, most of our friends and family probably did all they could to warn us off it. We made the choice, and we continue to pursue the dream only as long as we choose to. There’s no room for bitterness in that.

I had three different chances to sign that band that I mentioned earlier—the one with the current Top Ten hit. I blew it every time. But tomorrow, I’ll pick up the phone and call the manager, who knows exactly how many chances I had to make an offer, and who is well aware of exactly why I’m calling now. I’ll tell him, in all sincerity, how happy I am for the band’s success, and what a testament it is to their determination. Then I’ll ask if the band has closed a publishing deal yet. Because real music business weasels never, ever give up.

Follow me on twitter @EricBeall

Not too long ago, I had an opportunity to work on a project alongside a large, big-name consulting firm. Here was an army of highly-educated wunderkids, all who came bearing one hundred questions, but rarely even one conclusive answer. As the project grew longer and longer, and the answers increasingly elusive, I decided that these people were simply not very good consultants. After all, where were the solutions the client needed?

One day, I shared my concerns with a friend, who herself is one of those sought-after, big-name consultants. She smiled. “Ah… they sound like they’re very good at their job,” she said admiringly. “If they accomplish the objective, everyone goes home. Smart consultants never solve a problem. At least, not before they’ve uncovered a new one.”

This came to mind recently, when I saw NMPA President David Israelite’s recent comments about the need for blanket licensing, bravely made in front of the publishing masses at the NMPA annual meeting, and also reiterated in Billboard:

http://www.billboard.biz/bbbiz/industry/publishing/david-israelite-nmpa-president-s-guest-post-1005250672.story

David Israelite

On the face of it, Israelite’s primary point is unassailable. The current system of licensing, particularly in regards to mechanical and synchronization licenses, doesn’t work and must be fixed. Who could dispute it? As Israelite quite honestly points out, after all the legal sturm und drang about YouTube, if Google came to the publishing community tomorrow and completely acquiesced to all demands, offering to pay whatever it took to license the rights they needed, the publishers would be completely incapable of actually doing the licensing necessary. On a legal, practical, and PR level, that doesn’t put the publishers on particularly solid ground.

Especially when it comes to licensing synchronization uses, music publishers have always insisted that the use of a song in “synchronization” with a moving picture (like a video, film, advertisement or game) requires the licensing approval of each owner of the copyright. That’s a number that as recently as the 1980s
meant potentially three or four songwriters and their publishing representatives, but can now often mean up to ten or twelve writers, some with different publishers in each territory of the world, some of whom may control as little as 1 or 2% of the song.

Needless to say, this could require weeks of phone calls and research, and that’s just to find out who controls the necessary rights. After that, the poor music supervisor, film studio, TV producer or advertising agency still has to come up with a sync fee number and legal terms that will satisfy all parties involved—all of whom of course insist on favored nations status with each other. Now multiply all those headaches by several hundred thousand.

Why several hundred thousand? Because in the internet age, that’s the way companies are interested in licensing music. The focus now is not on one specific featured use in a movie or advertisement. It’s not even on ten songs all needing mechanical licenses to appear on an individual album. Rather, services like YouTube, iTunes, Spotify, and others need to license the whole of popular music, en masse, in order to be able to offer the variety and selection that the consumer demands. In that context, one by one is a little impractical. Like having to obtain permission to use each individual word in your novel.

Needless to say, the need for blanket licensing is pretty obvious, particularly to those who spend each day trying to work through the morass of the current system. Historically, music publishers have not stood out for their foresight and boldness. Yet even they will acknowledge that the crisis has arrived, and something has to change.

In the area of mechanical royalties, Israelite suggests an approach that grew out of an attempt to reform the compulsory license section of the US Copyright Act (Section 115). This would provide for a series of mechanical licensing agents (similar to the PRO’s like ASCAP and BMI). Publishers would have the right to choose among the agents, or change agents, but these designated agents would represent the one-stop, or maybe three or four-stops for anyone seeking a mechanical license. Further, these same agents could also license synchronization rights, on a pre-set, “blanket” rate basis. The blanket licenses would cover everyone and everything, eliminate the back and forth negotiation over each individual permission, and hopefully bestow that warm and fuzzy feeling for which blankets are known.

It sounds more efficient for the publishers as well as for the people seeking to license music or to build services around music. And while it certainly takes away some of the possibility of demanding a king’s ransom for that 7.5% share of the classic copyright that you own, the increase in the number of small wins, on a global basis, will probably more than make up for the loss of the occasional jackpot. Not to mention, it might keep folks like YouTube from just tossing in the towel and taking the music without any licensing at all.

So why hasn’t it happened?

As I said up at the top—not everyone loves a problem-solver. If the consultants fix what’s broken, everyone goes home. Likewise, music publishers don’t necessarily want to remove the logjams in the licensing system. Those logjams are largely the reasons publishers exist in the first place. Simplifying a system is rarely good news for the middle-man. And publishers are the ultimate middle-men between songwriters and the people who actually use the music the songwriters create.

If one agent is responsible for issuing all of the mechanical and sync licenses according to a pre-set fee structure for a particular composer’s catalog, why would that composer need a publisher? After all, the agency is presumably already taking some sort of fee for its role in the process. Why would a songwriter also give a publisher a 25% share of the income for the next 15 or 30 years? To do what? In a more precise example—if the whole music licensing world worked in roughly the same way as ASCAP and BMI do with performing rights, would future songwriters have any real need for a publisher?

Skeptical music weasel that I am, I don’t anticipate that the NMPA membership will be rushing out immediately to champion the cause for blanket licensing. Still, realist that I am—it’s probably worthwhile for those in the publishing game to take a glance at the inevitable and ask, in our customarily self-interested way:

What does this mean to us?

Three quick things to ponder, as our livelihood passes before our eyes:

1. Age before beauty.
The older publishing catalogs, particularly those built in the Fifties, Sixties and even Seventies, when you could still manage to obtain a full-publishing share for life of copyright , are looking even better. They won’t be doing deals like that no more.

2. Quantity over quality.
It’s hard to see how a blanket licensing system will not in some way reduce the viability of building a successful business around a few isolated “big copyrights”. While the sync fees may come down for any one individual copyright, the theory is that the money will be made up in volume. It may well be true, but it’s a system that favors the major publishers, who own thousands of licensable songs, rather than a small independent with one classic in the catalog.

3. The end of the paper tiger.
If licensing problems disappear, administration is no longer a service for which songwriters will pay. That means it’s all about advances (as if it weren’t already) and creative services. Songwriters may still need a bank, at least to keep them alive in the early stages of their career. They may also still need someone to help them jump-start their career and keep it moving—pitching songs, setting up collaborations, and finding opportunities for their music. At least, I hope they will.

Otherwise I’m going back to my consulting business.

Follow me on Twitter @EricBeall

Tomorrow's Forecast

Jun 22 2011

Today was a strange day in NYC —not quite sunny, but not giving in to rain either. The skies were in constant motion, drifting from lightly overcast to grey and ominous to hazy and hopeful in a constant cycle that never seemed to reach a culmination.

It’s not unlike the music business these days. No doubt there are some dark and weighty issues hanging over us, including the massive restructuring (or lack thereof) of the major music corporations, the budding crisis at the PROs and HFA, and our continuing inability to sell music, except when we essentially give it away at 80% off. Still, the mood among the weasels is noticeably brighter these days, and it’s not only due to the promise of a summer weekend with Lyor in the Hamptons. It’s as if those dark grey clouds have lifted a bit, and have been replaced by clouds of the whiter, puffier sort. Clouds that look a lot like an iCloud.

Negotiating season is over, and for once a new music technology is being brought to consumers with the blessing of the music industry—we’ve not been blindsided, ignored, or misled. Or at least we don’t know it yet. In fact, for the first time in decades, the music industry and the publishing business in particular acquitted themselves quite nicely at the bargaining table, not sticking in the fork to gouge a promising innovation but not settling for table scraps either. Maybe ten years of trouble has taught us something. No one wants to mess up what might be the last great hope for the music business.

Of course, at the moment, it is indeed a matter of hope. On the positive side, a partner like Apple certainly instills some confidence. Since the inception of iTunes, they’ve managed to consistently comprehend the way the modern consumer wants to listen to music, and to provide the best, most stylish, and most iconic technology to meet that need, in a way that music companies, including technology giants like Sony, have not.

At the same time, it remains to be seen how much of that genius stemmed directly from Steve Jobs, and how much will endure now that he is no longer an active presence in the company. I’m sure I’m not the only one to at least ponder why someone who refuses to pay even 99 cents for a legal download will pay $25 a year for a music locker, in which to store the contraband. But like the rest of the publishers, labels, artists and songwriters that have suffered through a decade of downloading and file-sharing, I sure hope they do.

In fact, one of the best aspects of the new licensing agreements between labels, publishers, and Apple is the chance to actually monetize, in retrospect, much of the music that has been pilfered in the past. With iCloud, Apple is charging $25 a year to scan and match a user’s existing music collection for songs not purchased from iTunes against the iTunes library—users will then be able to redownload up to 25,000 tracks to those same devices. With labels and pubs actually getting significant share of that $25 fee, this is a chance to recover at least part of what we missed the first time around. Life does not offer many such second chances.

Even better, the technology of the cloud allows true, verifiable accountings of what is being purchased, using iTunes Match to monitor what each individual consumer is putting into their locker. Unlike radio monitoring at the PROs, which is an error-ridden exercise inevitably weighted toward the mainstream pop playlists and the major publishers who represent the bulk of those writers, or the questionable system of divvying up the pots of gold netted in settlements with YouTube, Napster and the like, the accounting practices of iCloud should allow for a reasonably transparent system. While Apple has yet to lock in deals with the indie record companies and independent publishers, they have said that they will offer independent publishers the same percentage as is received by the major publishers who have signed on. Happily, the deal structure that’s in place would seem to be capable of getting everyone a piece of the pie.

Most importantly, unlike previous deals with companies like YouTube, we might be getting a share of a pie that’s actually large enough to mean something. Under the current agreement, the revenue from iCloud will be split with 30% going to Apple, 58% to record companies, and 12% to the publishers (and songwriters). For publishers and songwriters, that’s a big raise from the .091 cent per unit statutory mechanical rate—and most of us haven’t been seeing full stat rate on a consistent basis for a long, long time.

David Israelite

On the songwriter and publishing side, much of the credit for wrangling a more equitable split of the money goes to David Israelite, the president and CEO of the National Music Publishers Association. Easily the savviest of those trade group lobbyist/media spokesperson/diplomat/enforcers who’ve become the real champions of the music industry while the label presidents and publishing chiefs have been busy moving offices, schmoozing with hedge fund managers, and judging TV talent shows, Israelite was not directly a part of the iCloud negotiations. But according to Greg Sandoval’s insightful article in CNET News, Israelite was key in encouraging the publishing community to put some steel in their all too flexible spines. It’s a little like telling Charlie Brown, the perpetual loser, to man up and kick the ball. But lo and behold, it seems to have worked.

http://news.cnet.com/8301-31001_3-20071823-261/apple-google-music-clouds-can’t-snub-publishers/

Now, we can only hope that the publishing powers that be will also listen to Israelite’s advice about the essential need to streamline the process of licensing. Tech services have been demanding this for years, and every person that labors in the publishing community on a daily basis knows that the system as it currently exists is entirely dysfunctional. It doesn’t work for the new technology services, it doesn’t work for the old ones, it doesn’t work for the publishers themselves, and it certainly doesn’t work for the songwriters. If you want a peek at how bad it is, check out my blog “Life In The Slow Lane”:

http://ericbeall.berkleemusicblogs.com/2010/08/12/life-in-the-slow-lane/

But with the prospect of clouds on the horizon, publishers are going to have to sacrifice a certain level of independence in order to make sure that this new technology can be successful. The ability to access all music all the time without restrictions is a key factor in winning over the public to a format that could be the miracle cure for our business. We simply can’t afford to cling to our old system of clearing songs writer by co-writer, publisher by co-publisher, territory by territory around the world. No one has been a more outspoken advocate for the rights of publishers and writers than Israelite. But even he realizes that now is the moment to seize the initiative.

For the first time in a very long while, music publishers are in the drivers seat, but we have to keep the motor running. As we’ve already seen with YouTube, technology will move ahead with or without us. If people can’t get what they want legally, they will simply find another way. It’s up to us to create a centralized, global, uniform licensing system. If we can provide that, we are in a position to leave behind a mechanical royalty rate that even at its best was wildly weighted in favor of the record labels.

The current deal with Apple is a good one, and any competing service is going to have to match or better it in order to get in the game. Moreover, no one can win this game unless they have access to all our songs—old, new, hits, misses, and obscure album cuts.

All we have to do is go back to making music that matters to an audience, and figure out a quick way to make it available to them. The opportunity is there. As any kid who’s ever stared into the sky could tell us, clouds are what you make of them. If we make the necessary changes in the licensing process, they could bring an end to the longest drought of our lives. But there has to be something to put inside them. The cloud without our music is just that – an empty, substance-less piece of dead air. It’s up to us to make it rain.

Follow me on Twitter @EricBeall

With Memorial Day quickly approaching, it’s time for the annual migration of summer interns, returning from school to fill their summer with a dose of real-world experience, an insider’s view of the industry, and the kind of work history that will actually mean something when graduation rolls around. Unfortunately, three years of academic study have not necessarily provided a background of fundamental skills for a day in the office. Having been a songwriter for almost 20 years before I ever got my first taste of an office gig, I can assure you that it requires some adjustment.

Whether you’ll be spending your summer working in a small start-up venture or wandering the halls of 550 Madison Avenue or Rockefeller Center, you’ll need to know more than how to run the coffee-maker. That “Critical Analysis of Music and Entertainment Industry Paradigms in 21st Century American Popular Culture” class you took might not have fully prepared you for 12 weeks in the trenches. Here are 10 Tips for Maximizing Your Internship, and Getting Invited Back Next Year:

1. Be on time.
Most music companies do not open at sun-up. A 10a.m. start time will not strike most of the working world as cruel and unusual punishment. Nevertheless, showing up at 10a.m. for a job that begins at 10 will put you ahead of 90% of the other employees and interns. It’s that easy.

2. Do some homework.
I know—school is out. But the homework continues. One hour on the company website and a little Wikipedia should be enough to give you what you need to know: the company history, top executives, biggest hits in the catalog, top current acts, whether or not the company is being bought or sold and to whom. Now that you have all the essential information… memorize it.

3. Read Billboard.
The people around you are watching their lives and careers rise or fall with the chart positions each week. If you want to understand their mood, share their humor, feel their pain or avoid their wrath, it’s best to know who’s moving up and who’s falling down.

4. Accept all invitations.
If you’re asked to check out a showcase, attend a video shoot, go to a rehearsal, put up fliers on telephone poles or join in a birthday party for another intern, it is not actually a social proposition. It is a command performance. Be there. Everything else you’re doing can be cancelled or rescheduled. That’s life in the music business.

5. Know the music.
No one actually cares what kind of music you like. Or what new bands you’re into. Or that you’re a hip-hop kid who happens to have gotten an internship at Sony Masterworks. You need to know the music that your department works with, whether it has any appeal to your personal taste or not. This is not actually about you. It’s about the music that pays the bills for the office you’re sitting in.

6. Listen.
Even when no one is speaking to you. I had an intern once who overheard me speaking with someone about dub-step, and ten minutes later brought me information about an upcoming NYC show and two hot producers. Mastering the art of subtle eavesdropping is a valuable survival skill.

7. Elevate the communication level.
If someone asks you to give them an update, a report or a brief on something, they’re not looking for some jotted down notes on a piece of tablet paper or a print-out from the internet. Write a report, or a memo, or an email—with a proper heading, a consolidated and edited summary of what you’ve found, and bullet points for what you feel is the crucial information. Use spell-check. If you speak in a meeting, don’t ramble and don’t be shy. Especially in a large corporate environment, appearances matter, from the layout of your memo to your posture when you speak.

8. FOCUS.
It is possible to go a full eight hours without checking your Facebook page. Try it. If you’ve got a YouTube video on your computer screen, it better be an act on the label, a song in the catalog, or an artist the company is looking to sign—not a funny kitten or an SNL segment. Unless your boss has your number, turn off your phone. Listening to your iPod will preclude listening to what’s happening in the office—see item #6. You’re at work. So work.

9. Ask questions—that aren’t about you.
Everyone likes an intern that is full of questions. But not the following questions:
Will you listen to my band? “
“What do you think should be my career focus? “
“What’s the best way to work my way into a full-time gig at the company?”
“Can you introduce me to your contact at the company across the street?”

These are questions about you. The questions that are interesting to the people at the company are about them—the company itself, the artists or songs that the company represents, the people who work there, or the business strategies that are paying off or not paying off. Try:
“What were the key factors in deciding to sign that particular act? “
“What areas of this company will be the growth sectors in the next few years?”
“What are the skills that this company feels are the most important for entry-level employees?”
“How long have you been doing business with Joe across the street? How did that relationship develop? “

10. Bring the energy.
No one expects a young intern to know everything, to solve their company’s problems or even to drastically alter the workload. In fact, it’s pretty acceptable to screw things up once in a while—everyone’s done it. You’re supposed to bring the youthful energy. The know-how can come later. What’s not acceptable is to be tired, bored, distracted, or anonymous.

Even in the relatively small company where I work, we’ve had numerous interns who became full-time employees after graduation. We’ve had interns who we later signed to publishing contracts. We’ve helped interns get jobs with other companies in the industry. We’ve also had a reasonable number of interns fade off into the sunset, leaving no follow-up email address, no sustainable relationships in the company and no lasting impression on anyone. That’s a wasted summer.

Andre Harrell & Russell Simmons, with their best intern... P Diddy!

This is a very bad business for boring people. If you can’t make some kind of impact over a 12 week internship, then you may need go back to school considering other career options. This is the first mark you’ll make in the music industry. Make it count…

Looking Out For #1

May 08 2011

It’s remarkable how quick that warm and fuzzy feeling fades. Just last week the music weasels were gathered together at the ASCAP Awards, toasting EMI’s continued reign as Publisher of the Year. Well, okay… actually everyone was grumbling and sniping behind their back, and of course, chortling over their imminent sale. It’s a music awards dinner after all. You can only expect so much goodwill.

EMI Wins ASCAP's Publisher of the Year

Still, not too many foresaw that Publisher #1 would turn around a week later and publicly give the finger to ASCAP, and the songwriter and publisher community they represent. I suspect Marty Bandier at Sony ATV might get the front and center table next year, rather than Roger Faxon. Not that much of EMI will necessarily be around to see it.

Earlier this week, EMI Music Publishing made news by announcing that EMI would be taking back from ASCAP the responsibility for licensing digital rights in North America– EMI will now be able to “bundle” their rights together (mechanical, performance, and synchronization) and license them all directly, negotiating their own rates and terms, to digital services, rather than allowing ASCAP to negotiate and licensing the performing rights. In one sense, it’s a step closer to the “one-stop” licensing long-sought by digital services and many in the music community.

Roger Faxon

“The digital world demands a new way of licensing rights in musical compositions”, said EMI Music Publishing Chairman & CEO Roger Faxon. “We are reunifying the rights in many of the songs that we represent. By bringing these rights back together our aim is to reduce the burden of licensing, to create greater efficiency and importantly to reduce the barriers to the development of innovative new services.” Oh. And I thought it was just one more attempt to undercut the competition and cut out the middleman.

Of course, it might be some of that as well. While the ASCAP contract with publishers generally grants the PRO an exclusive right to represent the performance rights of the member’s catalog, even ASCAP CEO John LoFrumento acknowledges that “our members have always had the right under our Consent Decree to license their works directly”. Historically, most publishers have not chosen to do so– believing that the collective power of ASCAP (and BMI) allows them to negotiate more favorable licensing terms with radio, television, nightclubs and the rest of the music users than any one publisher could achieve on their own. Apparently, that’s no longer the case.

You heard it here first– this topic was brought up several months ago in this blog-space, in “With Friends Like These”. That missive explored the policy of DMX, the custom music service, which encourages music owners to license to them directly, rather than through the PROs. Of course, the money at stake from Muzak-type uses with companies like DMX is dwarfed by the monetary potential of digital rights. A publisher licensing DMX directly is someone breaking off a piece of crust from the pie that is PRO performance income. Taking away digital rights is like someone sticking their grubby hand in and walking off with a fistful of PRO pie.

http://www.ericbeall.com/with-friends-like-these/

ASCAP quickly sought to put a good face on the whole matter, even sending out a letter to members several days after the announcement– most likely to quell a quiet panic spreading among other publishers. Emphasizing that EMI continued to use ASCAP to license and collect on uses at traditional media, like radio and television, LoFrumento explained:

“A changing licensing environment has led certain members to experiment with licensing defined categories of music directly. This only involves the performing rights for those online music users who are not currently licensed or do not have licenses in effect with ASCAP. The online dollars represented by this licensing alternative could amount to less than 1% of ASCAP’s total current revenue.”

John LoFrumento

A generous statement from the little guy who just got sand kicked in his face by the big bully. But it purposely evades the point. As the undeniable industry leader in the publishing world, EMI’s decision to go it alone has an impact much beyond the actual dollar value of what it will be taking out of ASCAP coffers. Most importantly, it undermines the entire “strength in numbers” principle that justifies the existence of the PROs. If ASCAP can no longer speak for EMI, which has a larger share of the most popular songs than any other publisher (hence their status as Publisher of the Year), how effective can the PRO be at negotiating licensing terms with the digital community.

It also potentially weakens ASCAP in relation to BMI– strangely, no announcement was made as to whether or not EMI would also be taking digital rights away from BMI. It would seem very odd if EMI did not take the same action at BMI and SESAC. If the goal is to bundle rights, then certainly you want to bundle all of the catalog, not just a portion. I suspect that if BMI manages to hold on to what ASCAP has lost, it will have been by making a massive, unmentioned cash advance to bolster EMI’s shaky financial picture. This highlights the other big problem of the moment at ASCAP, which is BMI’s willingness to dole out mega- advances to major writers and publishers– a game in which ASCAP is hard-pressed to compete.

Needless to say, it all comes down to money. Despite Faxon’s media-ready press statement, this action has very little to do with easing the licensing process or encouraging new services. In fact, the licensing process would seem to have just gotten a whole lot more confusing, given that almost no current contemporary hits are entirely controlled by EMI April Music. Instead, most could easily have seven or eight different writers and publishers, all represented by some combination of ASCAP, BMI or SESAC– except for EMI April Music, which will be off on its own. That should be very simple. This EMI move is really about:

1. Eliminating the middle man.
On the most straightforward level, this move is not much different from the whole DMX idea– one less organization taking a cut of the money. While ASCAP’s fees are relatively low, they add up, especially when your company is bankrupt and up for sale. While ASCAP and most of its supporters would not paint the organization as a “middleman”, but rather an advocate and a representative in the collective bargaining process, the portrait of the unnecessary, fee-grabbing, intermediary is one that the technology community has been painting for the PROs over the past ten years. According to many in the digital community, there would be more uses of music, they could pay higher rates, and we’d all be making more money without these outdated organizations. Hmm. And the auto workers would do better without the UAW. We’ll see soon enough, I expect.

2. Screwing your buddy.
Unity in the face of opposition has never been standard operating procedure in the music biz. From the vantage point of the giant companies that dominate the landscape of music publishing, the downside of the PROs is that they even the playing field. Small publishers benefit from the clout of huge catalogs like EMI, while those same huge catalogs pay most of the cost of maintaining the organization. Being free of ASCAP allows EMI to negotiate rates on its own. In fact, it may have been the dismal state of the current negotiations at the CRB (Copyright Royalty Board) that prompted this move by Faxon. EMI could feel it can negotiate more effectively alone. At the very least, it can use the new independence to undercut the competition when it’s advantageous to do so, and to over-charge where it sees an opportunity. And what about the small independent companies? Well, they can always sell their companies to EMI.

3. Being the first rat off the sinking ship.
The real reason that the EMI move has resonated so heavily in the pub world is that it’s the first undeniable evidence of the elephant who has been lurking in the room for several years. Virtually all of the licensing and collection organizations around the world are houses of cards that will have to withstand some very big approaching storms. Dwindling mechanical royalties and exploding paperwork demands have left HFA in a very precarious position. Performance income has remained stronger, but now that looks poised to take a significant dip as well. Couple that with the pressure to make imprudently aggressive advances to top new writers and you’ve got the recipe for disaster at the PROs. All it will take is for one or two more major companies to follow EMI’s lead before that sinking feeling begins. The big guys will swim for shore and the little companies will be left behind with less influence, lower income and rapidly escalating fees.

According to ASCAP, this step by EMI is no big deal. And indeed, it may not last very long, given that the management team of EMI can measure their future with a stopwatch. It’s perfectly likely that ASCAP will be holding its awards show next year without Roger Faxon, who may be floating around outside the Renaissance from a golden parachute. But the first shot of the battle has been fired, everyone’s seen it, and everyone will react to it. There’s no taking it back.

Despite all the accolades and warm words at last week’s Awards, the truth is that the creative community that ASCAP has represented for 100 years barely exists anymore. It’s just a ballroom full of independent contractors of A&R services, speculators, investors, and hedge fund managers all in it for a quick buck before the final buzzer sounds.

Can’t wait until the BMI Awards in May.

The New Shmoo 2

Apr 05 2011

On the heels of posting the recent blog, “If the Schmoo Fits…” I made a quick trip up to Berklee College of Music in Boston to speak at a presentation for Berklee’s Career Development Center and the college’s Songwriting Club– a chance to visit the old shredding grounds where I went to school, and to check out a new generation of songwriters before they hit the streets. Happily, what I saw was a generation with far more open minds about the business of music, and music’s role in society, than one could hope to find among most of the industry’s elder statesmen like Doug Morris.

In case you missed it, it was Morris’ rant comparing the music industry to a “Shmoo” in Wired magazine that inspired last week’s blog– and raised the question:

Why do we keep getting screwed by the people building businesses around the music we create?

Inevitably, the answer to that question comes down to the pervasive tendency of all music people– executives, artists, songwriters, producers, engineers– to go myopic, and miss the big picture. We just want to make music or sell music, and spend all our time focused on that single endeavor. Meanwhile, someone else is creating radio, or MTV, or iTunes, or YouTube, or MySpace, or Pandora… The list goes on. It’s like we’re watching a movie, but we’re only paying attention to one single character. Then we wonder why we can’t follow the plot.

Certainly, music schools like Berklee have played their role in perpetuating that kind of tunnel-vision. When I attended, “going out” meant leaving the practice room, and “interaction” was a Max Roach tune. For all the wealth of wisdom shared about harmonic progressions and chord voicings, there was virtually no mention of how music fit into the larger scheme of the entertainment industry. Is it any wonder that musicians have been unable to re-imagine the music business in the face of a changing technological and social environment?

So it was a very happy surprise to see a new group of students actually looking up and over their music stands (as one student put it) and seeing the world beyond– even better, to see students reaching out to people in other schools and other fields of study to try to build bridges between creators of all kinds. There was even a philosopher coming to talk to the Songwriting Club about the role of music in culture. The mind boggles.

Plenty of negative things have been said about the “Facebook generation”, (as have been said about every generation prior), but it’s clear that young people raised on social networking understand intuitively how to build a worldwide circle of contacts and utilize them to create, market and distribute their work. These kids live naturally in the nexus where entertainment, technology, gaming, branding and social networking meet, and they see how those factors interact to drive popular culture. That’s more than can be said for 75% of the people working at the major record labels– Doug Morris included.

While music is clearly less and less the main course in the cultural smorgasbord, it remains an essential ingredient in almost everything that’s on the menu. The stand-alone business of music appears to be in a long-term decline, but music remains an inescapable part of every entertainment, media and marketing enterprise, from movies and television, to games and ringtones, to advertising campaigns to political and social activism. The problem is that so few musicians and music weasels are able to see and understand their role in this broader spectrum. None of us can afford to stay in the music business. We all have to find our place in:

1. The entertainment business.
We could start by trying to be more entertaining. Plodding through ten songs with your band at Mercury Lounge is probably not going to do the trick in 2011 and beyond. In the entertainment world, music is part of movies, television, theater, electronic games, even sports. We live in a visual, multi-tasking, multi-format environment saturated with endless variety of stimuli. Music will play a role in all of that, but simply putting a band onstage to play their songs might not be enough anymore.

2. The communication business.
Variety magazine recently cited Hans Vestberg, the President and CEO of Ericsson as predicting a world in which up to 5 billion people will have access to mobile broadband within five years. Mobile music and mobile video will revolutionize the entertainment industry yet again, but the people running the show won’t be in show biz. They will be mobile network giants like Ericsson and Nokia, or cable companies like Comcast or Cablevision.

Yet again, music will be an essential part of selling the new communication tools to the public. But it will require music that has enough global appeal to communicate with populations across cultural lines. Maybe more importantly, it requires music for which the master and publishing rights can be cleared quickly and globally. That means the music industry better start stressing about streamlining our administration and licensing systems.

3. The technology business.
Check out the great interview in Billboard this week with my friend Jim Lucchese, the CEO of Echo Nest, a company that develops application programming interfaces, or APIs, which enable app developers to incorporate digital content into their apps.

http://www.billboard.biz/bbbiz/magazine/upfront

Jim makes clear not only that the app business is a crucial one for the music industry, but that music is an integral element of many potential apps. However, just as music must be licensable in order to play a part in the communications business, music industry players, from labels to publishers, must make access to music practical, legal, and profitable in order for app designers to build products around it. The recent Echo Nest link with Island Def Jam is the first step in that direction.

Jim Lucchese-Echo Nest

4. The advertising and marketing business.
If you were at SXSW this year, then you’ve probably already noticed that the power structure has shifted drastically at gatherings like this– with the advertising, media and branding companies moving to the forefront, and the old-time record execs left standing outside the Fader Fort trying to schmooze their way in. This is because music is now far more valuable as a means of attracting a specific demographic and defining a brand to that demographic than it is as an stand-alone product. A hot indie band may not sell much actual music, but it can be extremely effective at drawing a very specific audience to a brand, or making that brand a little cooler and edgier than it is. Even when they own a record label, companies like Mountain Dew or Converse are not in the music business. They’re in the marketing and branding business. They simply use music to do their marketing and to define their brand. But if that’s the role music plays, then musicians, songwriters, and A&R people are going to have to be able to think and communicate clearly and analytically about their act’s audience, the audience’s buying power, and the qualities or values that the act conveys.

If you’re wondering why so many investment players are lining up to bid for falling-apart or already bankrupt music companies like Warner and EMI, this could be why: the financial guys see music not as a growth business itself, but as a vital component of so many other growing businesses. It’s not that anyone sees the return of peddling $20, ten song collections of music to millions of consumers. Rather, music really has become like water, in the sense that it’s valuable primarily because of it’s needed to make a thousand other things.

Maybe that’s the upside to being the “Shmoo”. Morris’ point was that the Shmoo was constantly pushed around, “you could do anything to him”. On the other hand, the Shmoo was adaptable, multi-purpose, and endlessly cooperative. We could have worse role models. The next generation of musicians and music executives is going to have to learn how to exist in a world bigger than just the music industry. First and foremost, that means looking up and out at the broader world, and learning to play, and work, well with others. It was great to go home to Berklee and see that transformation already taking place in the class of 2011.

Now if we could just get rid of all the old guys standing in the way…