The Homecourt Disadvantage
I mentioned in the last blog that I’d been reading Alan Greenspan’s book, “The Age of Turbulence”, which succeeded in making clear to me that I understand even less about economics than I thought I did. But I have learned a few things, and I picked up one new term that seems to have relevance even in the simple, survival-oriented economic world of the music business weasel:
Home Bias.
The phrase refers to the tendency of investors to invest primarily in their own country– it’s a natural and understandable phenomenon, and although it is fading, it persists even today. There’s nothing particularly negative about it, except that it can often limit the opportunities that investors have to choose from. You can stick with only buying stocks in US-based companies, but you might be able to make more money somewhere else. And it’s not only true of investing…
If you’re an American songwriter or publisher looking to boost your earnings, it might be time to examine, and eliminate, your own Home Bias. Here’s a few reasons why:
1. The World’s A Big and Wonderful Place.
In a business that is getting smaller very fast, you need as much opportunity for your music as you can get, and you simply can’t afford to write-off everything outside the US. Especially if you write music to be covered by outside artists, you will find much more opportunity in the UK, Europe, and Asia than you will in the United States. Outside of this country, you can find more artists that record outside material (you can even find bands that cut songs by outside writers, which is all but unheard of here), and you will find that in certain markets, particularly urban music, the sound of American tracks is highly sought-after, and difficult for the local writers to copy.
You’ll also find that tastes differ, and sometimes, that’s a good thing. Asia tends to prefer more harmonically complex, AC-sounding pop ballads than is acceptable in the US. If that’s what you write, you might have just found a new home. Germany embraces a classic dance sound that would be very difficult to find a home for in this country. Australia still has a healthy appetite for AOR. If your melodies are great, but your lyrics are weak, try pitching songs in Japan– they’re going to rewrite the lyrics anyway.
If there doesn’t seem to be a spot in the US market for your sound, you can either try to change your sound (which can be pretty hard) or change your market. In the last two years alone, American acts such as the Scissor Sisters, Daniel Powter, and Mika have achieved superstar status in Europe and the UK, while in some cases, finding little or no market in their own country.
2. That Foreigner’s Money Is Just As Good As Ours.
In fact, it’s better. If you haven’t noticed, the US dollar ain’t what it used to be. At present, the dollar is plummeting against most foreign currencies, especially the English pound, and the Euro (the currency of the European Union). The bad news is that a croissant in France will set you back a pretty hefty chunk of change (it’s worth it though). But here’s the good news:
For every 1 GBP you earn on your song in the UK, you get $2 USD. For every 1 euro you earn on your song in Italy, you get $1.50 USD. That’s a good deal. So good that it’s one of the primary reasons that US publishers are having a modestly profitable year, despite the utter collapse of the US music industry. If you have a catalogue of songs that is active in the UK or Europe, your income is up by almost half, just based on the currency exchange alone.
This also means that foreign publishers and labels are often able to offer deals to writers and artists in the US that are competitive with US companies, despite the fact that the foreign territories are often much smaller. There have been several important signings this year in which a UK publisher was able to sign a US-based writer or artist out from under the US publishing community. Why not? The foreign publisher is essentially paying half-price, because of the weakness of the US dollar.
3. MIDEM Is Coming!!
I know, you’re about to ask: But how do I get my music to all of these rich, musically-diverse foreigners, in order to claim a piece of this pie?
Here’s a start. MIDEM is the music industry’s annual international schmooze-fest that takes place each year in Cannes, France in mid-January. Picture 50,000 music industry weasels from companies large and small, from every different region of the globe, all converging together for one week of hyping, drinking and hopefully, deal-making. Sound like a nightmare? It is, kind of. But it is also a perfect opportunity to meet music executives, in a curiously relaxed atmosphere, from every possible corner of the planet. Even better, people come to Midem to make deals– so if you have a product you’re selling, you should, at the very least, get a few listens. Plus, you can have one of those expensive, but delicious croissants.
There’s a basic principle at work here that goes back to basic economic laws (the few that I understand). Think of it as the principle of “The Grass Is Always Greener”. Or “Go West, Young Man”. The principle simply states that if things aren’t working for you here– or could be working better– try going somewhere else. Chasing opportunity is the oldest economic trick in the book, and at the moment, there is a lot of opportunity in places other than the good ol’ USA.
With the US music industry struggling for survival, this is no time for Home Bias. If you’re having trouble seeing a light at the end of the tunnel, then you have to broaden your horizons.
