Category Archives: Tech

The Lie of “Live Won’t Save Music”

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The Introduction

Yesterday, I posted my second article inspired by Fred Wilson’s comments to Jason Calacanis during LAUNCH, wherein I focused on his comments about Kickstarter regarding the music and movie industries. The post itself became too long to explain the economics of the paradigm (of the music industry, at least), so I figured it would be better to do so here in a more focused post. So let’s jump in.

The Lie

In the music business, there’s a well-known adage: “Live won’t save music.” This is the argument that many within the established major label machine use to fend off the assertion that free distribution of music would actually help the music industry in the new digital era. The argument is that artists can’t make enough on a live performance to offset losses they would see by distributing their music for free. And in some cases this is true; income from live shows may not be able to offset those losses…for the major label artists, who have huge stage crews, large arena shows, and a long list of people to pay back (not least of which is their record label). 

The Secret

What industry professionals don’t tell you is that live shows are where artists have historically always made most of the money that goes into their pocket. Money from album sales most often gets paid back to the record label and company, whose “signing” of the artist was simply a monetary advance in the first place. In 1993, well-known artist/producer Steve Albini took aim at the expenses squeezed from artists in his essay “The Problem With Music.” Excerpts from the essay clearly detail how the real economics worked behind the scenes.

The Simple Economics

This simple economic reality means two things: 1) That it’s true that major label artists like Beyoncé and Robin Thicke may very well have a hard time making any real money from live shows and will possibly need to continue to rely on the age-old system’s business practices, and 2) That newer, increasingly independent artists can leverage this new business dynamic to their advantage. Whereas their major label peers are essentially tied to the old system (and streams) of revenue, newer artists who are either fully independent, or have contracts with smaller indie labels which afford them more control, don’t need to sell 150,000 albums or fill an arena tour to make a profit. In fact, they will have an easier time of it, precisely because their “stage crew” many times may only consist of a friend from high school watching the merch table.

And this is where Wilson’s comment comes into play, and is exactly right; crowdfunding platforms like Kickstarter and Indiegogo provide a way for artists (both inside and outside the music sphere) to secure funding for that next tour without being on the hook for ~$400,000 in album distribution and tour expenses.

In fact, there are many artists now exploring the possibilities of free precisely as a way to use their music as a means of marketing to jack up the money they’re able to raise on sites like Kickstarter. By using their music as a “free sample” of their brand, artists are able to explore the dynamic of giving their prospective fans a reason to come out and see them live, buy a shirt, bring a friend—all things that are better for them than the money for one album sale anyway. Music is increasingly being used by these artists as major means of marketing and branding, rather than solely as an end commodity for sale.

You can’t argue with math, and here’s reality: How many times are you compelled to and/or do you buy a song or album? Just once. Why would you buy it again unless you had to? But if you examine the same dynamic with respect to going to a show, or buying a t-shirt, suddenly the answer is “as many times as you want.” It becomes a self-feeding cycle, wherein new possibilities are presented by the power of crowdfunding, and not having to go to a major label for the financing. It boils down to simple arithmetic.

The Album You Had to Buy Over and Over Again

It’s worth noting, also, that the established music industry got used to people buying the same album(s) over and over again because they had to. With each subsequent technological change, that Led Zeppelin album you loved so much became obsolete, and thus you needed to shell out more money for something you already had. Buying music on ’45’s became buying the same music again on LP’s, then again on cassettes, again on CD’s, and then again as basic mp3 files (usually off iTunes).

But something happened during that last transformation: music became distilled down to only the information, sans any physical product, and with the power and reach of the internet, distribution costs dropped to zero. Suddenly, the ability to reproduce and distribute music became the cost of 10 minutes of your time, and didn’t even require the kind of distribution networks that record labels had spent decades building, growing and protecting.

And who was it who lost out the most? The demographic that gleaned most of their revenue from physical album unit sales—the major record labels. But the artists now had a new reality in front of them: mass distribution, but without having to indenture themselves to the “physical CD sales-dynamic.” They were (and are) free to make money where they always have: in the live sphere with grass-roots ticket sales and merchandise sales. Thus it becomes clear that the statement “Live won’t save music” is inherently a biased lie. Live won’t save the old music industry, but those within the industry who are adapting to the new terrain are doing just fine exploring the new possibilities before them.

The New Free/Live Dynamic

Those are the people I would place my bets on. They have no stake in the old paradigm, and are happy to push it aside to see what the new free/live dynamic can do for them. This is where the real money in the music industry will be in the next decade. Not grasping with frail fingers at a business model quickly fading away, but exploring with wide-open eyes the opportunities that “free/live” afford both those in the music trenches, and their prospective fans. Don’t be fooled; there’s still a ton of money and opportunity in the music industry. You just need to know where to look.

Why Isn’t the Music Business Fully Crowdfunded?

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Last week, I posted an article detailing VC Fred Wilson’s thoughts on investing, in which I drew on a few things he’d stated during his interview with Jason Calacanis at LAUNCH. This time around I want to explore another statement Wilson made during his time on stage which I thought received way too little attention at the time. In fact, I’m quite shocked that more people haven’t really latched onto this sooner.

At one point during the conversation, Wilson mused, “I don’t understand why the music business isn’t fully on Kickstarter,” to which there was some murmuring (I heard sitting in the audience), but no real discussion thereafter of that particular comment. While I was just as interested in the next point that Wilson discussed with Calacanis (the subject of my previous post), I couldn’t (still can’t) get my arms around how something so stark to many people seems to fly under the radar. But before I get too incoherent, let me back up and explain my exasperation.

The wonderful thing about Kickstarter (or any of the other crowdfunding platforms) is the freedom that they give to artists. In the case of the music industry, the freedom I’m referring to is the ability to not have to sign to a major record label in order to have money to finance an album, tour, video, etc. Instead, artists can go directly to their own fanbases and raise the required capital from them, thereby side-stepping the very real consequence of having to sign away some amount of creative control (ever hear of master tapes?) to the major label. As a result of this, artists consequently side-step the dynamic of accruing a similar sort of debt with the label itself. (I will explain the deeper economics at play here in a later post).

The dynamic of crowdfunding has changed the entire paradigm of the music industry. Wilson’s comments struck me so much because of how true they really are. He doesn’t need to be a guitarist in a band to understand that the freedom that services like Kickstarter give content-producing artists is invaluable (clearly the reason he invested in Kickstarter in the first place). His own “I don’t understand why” comment exhibits his understanding of the services that used to be out of reach of artists, which are now readily available thanks to crowdfunding dynamics.

Of course, crowdfunding alone can’t and won’t control an entire vertical like, say, the music industry. It’s one part of a larger mechanism. But it’s nonetheless a shift in the paradigm of music production, distribution and consumption that was previously unavailable. Where crowdfunding really comes into play is when it totally disrupts the age-old adage “live won’t save music” (but that’s an argument for a later post).

Here’s the real point: Fred Wilson is an investor, not a guitarist or aspiring singer. Yet he sees the value of crowdfunding so much (investment interest aside) that he doesn’t understand why any artist would forgo the opportunities presented by these new services. And I’m inclined to agree with him (and I’ve been in the music industry now for years). So here’s the real question: if he gets it, and I get it, don’t you think that all the new artists out there get it too?

It just might be a very short time until the music business is fully (or mostly) crowdfunded.

Why I Practice Singing As Much As Pitching

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Image courtesy of HamptonsAudioVisualRentals.com

 

Years before I started practicing my business pitch as a CEO, I was practicing how to do two other things in front of people: speak publicly and sing. Exercises in public speaking began as early as grade school, and served me well during science fairs and group presentations. However short-lived my science career turned out to be (another story for another time), the science fairs on the county and state levels bolstered not only a comfort, but an enjoyment in speaking before a crowd.

As I entered high school, though, I began to do something else just as seriously: I began to sing. I began to practice singing as often as I could, and not just in the shower. I was practicing with headphones, a microphone and amplifier setup so I could know exactly how my voice sounded coming through a loudspeaker (of sorts). I was doing the band thing with my friends, and we were going to conquer the world. That meant I needed to be able not only get up in front of a crowd and make some sort of sound come out of my mouth, but I needed to be able to control it.

I needed to be able to control every aspect of my voice: the tone, the inflections, the power, the breath, the range, and the melody. That’s what it took to be a lead-singer and/or rockstar, and that’s what I was going to do. I couldn’t have known it at the time, but all that practice for my music career—understanding the qualities of my voice and what it was (and wasn’t) capable of—is proving invaluable well beyond my intended career as a musician.

I’ve blown my voice out numerous times in the past exploring new ranges, techniques, pronunciations, and vocal styles. I’ve had days where people inquired about my “laryngitis.” But it’s ok, because a day later I’m all ready to go again, and each time I nail a new song and find the delivery that works for my voice, I get to know my own talkbox a little better. With that discovery comes a deeper understanding of how my voice sounds to other; its melody, its tone, its inflections. (It also has helped with my breathing, which is something I believe every public speaker should continually work on).

But the most important thing I’ve grown to have a deeper understanding of is the power and range that my voice can have. That’s something that transcends the rock stage and applies directly to my trajectory now as a CEO. Speaking comes with the territory, and having a notion of my range and potential power is like having an ace up my sleeve. I know how far I can push myself before my voice disappears under too much strain, and I what I can now do to avoid that blowout.

I practice singing any number of things as I continue to test my voice and its boundaries: post-grunge, alternative rock, ska punk, pop, metal, classic rock, rap, reggae, male vocals, female vocals—anything that piques my taste and can give me more of an edge. In retrospect, practicing singing has been as much of an advantage as practicing my business pitch. I would suggest to anyone who spends time speaking in public to start singing—really singing: really try to nail that melody, try to match and control your breathing, find the inflections that work best for you, and find your own power.

Besides, we all wanted to be rockstars at some point, right? Maybe there’s still time for some of us—maybe all of us.

Start Writing—Anything

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In a short piece posted earlier this morning, Hunter Walk talked about writing, and how the need to be right is many times what stops people from putting their thoughts out there. Whereas some may seek to “write the definitive post” on a topic as Walk puts it, his advice, rather, is to pick something you’re fairly confident you know about and “riff a bit.” This is directly in line with my thinking when it comes to putting out something with my name on it; do the best I can writing the piece, make sure all basic spelling and grammar is correct, and then see what comes back my way in terms of commentary or questions.

I would, though, dare to take Walk’s advice one step further: if you want to start writing, don’t just write blog posts—write anything. Write news articles to learn how to instigate an investigative process, write essays to learn how to really flesh out an argument, write poetry to better understand the concepts of metaphors and literary devices, do interviews to learn how to speak to people and translate it into compelling writing. Not all of these things will pan out (and you may not enjoy all of them, or even any of them), but in sharpening your teeth on different writing styles, you lear how to mix and match to make your own pieces (blog posts, for example) more powerful.

As you descend into learning each new style in a hands-on way, the need to be right will fade some, and what you come away with is a more comprehensive understanding of presenting and/or winning an argument. The ironic side-effect of this (in my experience as a music journalist) is that people suddenly begin to think of you as a voice to take seriously. Go figure: stop trying to be the definitive voice, and somehow you get closer than you ever were when you were trying!

Of course, there’s an even more basic reason to write (and very much a reason I do): it helps the mind to work through new concepts and move the creative process along. Don’t worry too much about being right—just write.

Fred Wilson Believes in Things That Everyone Else Thinks Are Wrong (But Are Actually Right)

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A couple of weeks ago I attended the LAUNCH Festival in San Francisco, where I saw a number of amazing speakers over a three-day period. Needless to say the cross-country trip from Atlanta was worth it. However, despite the fact that there were numerous speakers whose points have stuck in my head since then (particular favorites of mine were Yancey Strickler (Kickstarter), Jeff Weiner (LinkedIn), Chris Sacca (VC) and Tony Hawk (yes I’m a huge fan of skating and the Brown Brigade)), the speaker whose comments were most easily accessible to me was Fred Wilson (Union Square Ventures).

Since the wrap-up of the festival, Jason Calacanis has published a couple of posts and tweets noting the fact that his fireside chat with Wilson was one of the most popular interviews of the whole event. This I readily believe, as I sat with rapt attention as Wilson discussed a number of topics. Actually, Wilson made so many good points during his chat that I need to dissect it through a number of posts rather than in just one.

Of particular interest to me though was one thing that Wilson said. It clearly demonstrated to me his line of thinking when it came to identifying new companies that he liked to become (or was likely to become) involved in: “Believe in something that everyone thinks is wrong (but actually turns out to be right).”

That terse statement, which Wilson actually attributes as something Bill Gurley once wrote, underscored his thinking when it comes to herd-mentality and how he identifies opportunities. While I’m sure there are certainly other factors at play, the qualifier word “wrong” is an interesting choice for his (Gurley’s) adage; it implies quite clearly that he identifies opportunities not only in areas or with companies that might be viewed as rare or unconventional, but ones which may be entirely against the grain of “logical” thinking at the time. This by extension highlights the fact that one can expect Wilson’s current and future investments to be in areas or companies wherein others might not dare even entertain the notion of involvement. He benefits from the fear factor that clears the road in front of him to make it an open highway while others see the words “do not enter.” [1]

Though I’ve followed Wilson’s blog for some time now, since LAUNCH I’ve been reading his posts with this new thought in mind. With each new post I read, there’s now that nagging question in the back of my mind: “what’s the thing in this post that Wilson has identified that others think is flat-out wrong (but is actually right)?” There isn’t always a phrase with a blinking sign screaming “it’s me!” but the point remains that with each subsequent post comes a learning opportunity to go back and reexamine a possibility that I might have dismissed earlier as a “do not enter” sign.

I’m interested to see Wilson’s posts over the next month or so. I’m curious to see what piques his interest enough to blog about it that others may have already dismissed or avoided. I suspect that Wilson’s thought process might very well be as alternative as his Egon Schiele-esque Twitter profile pic (by the way Fred, kudos on that; art-history nerds like me rejoice in the fact that so many within the tech industry use so much modern art imagery). I believe that’s precisely how he’s able to identify opportunities that others miss, or dismiss altogether.

 

Thanks to Dad for reading drafts of this.

 

Notes


[1] Wilson also stated that he had been on the board of a non-profit called DonorsChoose for a few years, which, as he put it, “does exactly, exactly what Kickstarter does” for teachers and public schools. As a result of his involvement with this previous venture, which was raising between $30-40M at the time, Wilson notes that he had a bit of an inside look at the very sort of mechanism upon which Kickstarter was building.

Mean People Fight; Creative People (Sometimes) Argue

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In his essay “Mean People Fail” a few months ago, Paul Graham has provided more food for thought (for me, at least) than much of anything I’ve read of late. [1] The essay itself is a clear caution against acting nastily to others, as such actions can impede or prevent one’s intended goals. Most of the themes discussed therein I agree with readily as they are so common-sense that to disregard such proposals seems utterly preposterous.

There is, however, one area which Graham touches on lightly that I feel needs a little more attention. Graham’s short paragraph on fighting is truthful (I believe) in its intended message and account of reality. However, we all speak from our own experiences, and I feel that the term “fighting” may be too broad a term, particularly for an industry as genuinely artistic and creative as startups and tech. While I understand Graham’s point here (he is undoubtedly using the term “fighting” to refer to pointless disagreements, high tempers, and accusatory tones that lead nowhere), I think a deeper examination is warranted.

I fear the term “fighting” may be overrepresented in cases where the term “arguing” fits more appropriately. In an industry where creativity and outthinking the competition are not only realities but necessities for successful startups, it may very well be in times of arguing differing views that an answer or pivot point presents itself. Good answers and opportunities do not always appear within the vacuum of “a good day” and sometimes take a little more pressure to fully crystalize.

Much like the music industry where arguments between band members or artists and producers can (and many times do) produce the best creative results, arguing is not only a luxury but a necessity. The creative frustration can at times reach a critical mass before a meltdown occurs. But if the proper alternative lines of thinking are presented at the right time, then that critical mass not only returns to normal, but can yield a result not viewable before the high rise of creative pressure and focus. It is this creative force which drives many musicians, and which I’m sure can be likened to the creative drive to build that drives those within the tech space.

Creation is a messy, dissonant, sometimes quite frustrating process. But it’s precisely that power and sheer will to succeed that many of the great ideas (albums) are born from. Graham is not wrong about his discussion of fighting; pointless accusations and infighting drain a startup’s (as well as a band’s) lifeforce and ability to thrive (it’s this definition of “fighting” that I am convinced Graham is referencing in his essay). A band, like a startup, is very much like a marriage: both are living, breathing organisms, requiring constant care, adjustment, and which, at times, can become arenas for argument and restructuring. But, though the prospect of adjustment may pose a distasteful reality for a startup team, it could lead to bigger and better things. Then you go from being Iron Maiden with Paul Di’Anno to being Iron Maiden with Bruce Dickinson. [2]

 

Thanks to Mom, Dad, Charles Jo, Terrence Yang, and Scott Menor for reading earlier drafts of this.

 

Notes


[1] This essay does not reflect the beliefs of Paul Graham or any of those mentioned in his “Thanks” section, except where the original essay’s thesis was referenced. These are merely my own thoughts on the the thesis that Graham presented in his original text.

[2] Though I prefer the lead vocals of Bruce Dickinson, I quite like the Paul Di’Anno releases of Iron Maiden (1980) and Killers (1981) as well, since both albums are notable in their own rights. However, it is indisputable that Iron Maiden grew to new heights under Dickinson’s leadership, thus the point of the example in the essay.

Their Response Was Not a Fuckup; It Was Exactly Right

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Just a few minutes ago, Product Hunt CEO Ryan Hoover posted a tweet and article on Medium acknowledging what he called a terrible fuckup; Product Hunt’s validation programming had made the erroneous assumption that all founders are male by using the article “his” when discussing validated identity.

Screenshot of tweet to Product Hunt, earlier today 2/19/15

Screenshot of the tweet to Product Hunt, earlier today 2/19/15

The reaction from Hoover and Product Hunt to the tweet was exactly what it should have been: mortification at such a presumptuous error, speedy rectification of the problem, a personal apology to Allyson (the tweeter), and an immediate blog post owning up to the misstep for others to be mindful of. Frankly I would have been impressed by the first two things; but to see all this unfold in sequence in an expedited manner reaffirmed the reasons I use PH, and why I consider them an example of a company to emulate.

Response tweet by Ryan Hoover to the discovered problem

Response tweet by Ryan Hoover to the discovered problem

 

The corrected response on Product Hunt

Screenshot of the corrected response on Product Hunt

I have to give it up to the whole PH team; it’s not easy to admit a mistake, particularly when it’s brought to one’s attention in such a public arena. But they really went above and beyond in their response, and the subsequent Medium piece by Hoover really underscored their commitment to gender equality that I very much respect them for.

Well done PH, take a bow. We should all strive to be as good as this.

 

Notes

[1] The images used in this post were taken from Ryan Hoover’s original Medium blog post.

Flexibility in a Deviceless Atmosphere

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Mattermark CEO Danielle Morrill just published a Medium post detailing her transition from being a laptop-laden executive to living (work) life sans laptop. According to her post, she now relies on four main devices, only two of which account for work-based devices: 1) 5K iMac with iMac Cinema Display (work), 2) older iMac version (home), 3) 13″ MacBook Pro (home), and 4) iPhone 6+ (work and home).

One of the reasons she notes for her transition to fewer devices in her work life is the health benefits that come with such a transition (under the subtitle “Walking More”). Short and to the point, her basic explanation is that the changeover has allowed her to begin taking part in a healthier lifestyle. As Morrill notes, laptops are heavy (relative to an iPhone, for example), and carrying one back and forth to work can certainly be a tax on one’s back and muscles. I know—I carry mine everywhere when I go out to Starbucks to get some work done or to a business meeting.

Yet one of the things that Morrill lightly touched on was her desire to walk more to and from the office, and reap the benefits of being able to do so sans laptop. This struck a particular chord with me because of the amount of physicality that’s associated with my own job.

Being in the music business can be physically taxing: nights spent at shows—standing in dive bars or clubs—for hours on end waiting to speak to artists after the set-list finishes can be a challenge sometimes. While I’m certainly not in the habit of bringing my laptop out to a show (nor would I bring a tablet), reliance on my iPhone is just half of the equation; the other half is being able to stand for that 4-6 hour window—oftentimes in a smoke-filled (dingy) atmosphere next to sweaty bodies (and even sometimes in a moshpit)—and remain limber enough to talk to that artist after the show and project a professional vitality on par with their high of playing to an audience. In this industry, if you can’t project that to an artist, you have close to nothing.

And that’s the reason Morrill’s piece resonates with me on such a deep level: though we work in completely different industries, her thoughts about moving around unencumbered—”No backpack. No purse. No laptop[,]” as she puts it—are sentiments that hit me directly precisely because they can and do apply so much to the music business. Running a tech startup is a challenge, but the ability to transition between tech CEO and music industry professional is critical; perhaps so much so because one must be able to talk with and pitch artists most times without any graphs, slideshows, or devices available—you need to be able to speak their language, and that most times consists of nothing more than a vision, a business card and damn pitch.

So while Morrill’s experience in transitioning to a lesser device-filled professional track comes from experience in a different industry, the basic premise of health and flexibility carries over in a very palpable way. I look forward to (and hope to see) Morrill writing a further update on the changeover; in a funny way, it provides a good roadmap for those of us with highly physical jobs to see how one can be simultaneously flexible and productive.

Taylor Swift Can’t Sue Me Yet

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Last week, I posted an article detailing Taylor Swift’s statement that she intends on trademarking phrases from her most recent album 1989 like “this sick beat” and “party like it’s 1989.” I found the statement equally outrageous and unsurprising, as Swift seems intent on continuing to provide headlines in the wake of Swiftgate. [1] My disdain for this sort of play by Swift is fairly apparent.

Taylor Swift; Image courtesy: Getty Images for Moet & Chandon Astrid Stawlarz

Taylor Swift; Image courtesy: Getty Images for Moet & Chandon Astrid Stawlarz

But let’s back up for a moment. My disdain is not brought on by some anti-business philosophy or pro-starving-artist sentiments. That would make it super convoluted and essentially amorphous in meaning. It’s actually a lot simpler than that: my disdain is driven by how Swift’s actions are affecting her fans, and the subsequent results that may (and most likely will) occur. While I applaud Swift, and artists like her, for taking their business futures by the horns and seeking to transform themselves from solely artists into artists/business people, I do not agree with the way in which Swift is going about it. And apparently, neither do some of her fans.

Today, Buzzfeed reported that Swift’s lawyers began threatening Etsy sellers with legal action (which we all know is code for “we’re going to sue you the minute the ink dries”) if they didn’t take down products they were selling which referenced either Swift’s lyrics or music. Normally this would be a completely reasonable thing to request (though in this case, the “request” is actually a demand), except for 3 things:

  1. The respective Etsy sellers were selling one-off items, or just cobbled-together fan paraphernalia; hardly enough to either cause Swift any sort of economic hardship or make her any real money anyway
  2. Swift doesn’t own the trademarks yet
  3. Swift is biting the hand that feeds her (her fans), and appears happy to keep doing it

So let’s take these one at a time. Regarding point number one, we’re talking about little pieces of jewelry or candles with bits of Swift’s lyrics referenced—hardly enough to be of any real threat (or benefit) to her “empire.”

Number two, as is clearly spelled out in this Time article, in 2014 Swift merely applied for the trademarks she’s already aggressively protecting. That means she actually has no right to be sending letters with threats of legal action right now; at least not until the USPTO awards her ownership over her prospective trademarks. So, from a strictly legal point of view, Swift is very clearly jumping the gun on threats of any sort of trademark infringement lawsuit. [2] That means that this great song by progressive-metal artist Peculate is not only awesome, but completely legal (at least for the time being):

Now the last point, and actually the most important of the three: Swift is actively alienating her fanbase and leaving a bitter taste in the mouths of (possibly former) fans. Swift is so focused on protecting her (as of yet un-granted) trademarks that she is biting the hands that feed her. Let’s see what some of the Etsy sellers/Swift fans have to say:

One Etsy owner/fan said:

When we got the email that the trademark infringement occurred [(which, by the way, it hasn’t yet)], we were shocked…We were scared. We didn’t even make enough money for a lawyer…That same day, we saw that Taylor was attempting to trademark a variety of phrases trying to get them blocked from being sold. After seeing that, we grew a little angry and felt targeted by her camp. It didn’t seem like much of a coincidence anymore.

Another wrote:

Obviously an artist has a right to their art and people should respect that. But at the same time most people, like us, are trying to be respectful and contribute to the excitement that the artists brings into our lives. When that is taken away, it leaves us with a bitter taste in our mouths. It feels as though we don’t matter [to her.]

Swift’s actions will cost her very much in the long run, I believe. While it’s true that Swift is entitled to a share of any money made through sale of products that reference her material, I wonder if alienating her fans could possibly be worth the $1.60 she might receive in a one-time royalty. One commenter on the Buzzfeed article pointed out the reality that there is a ton of fan-made Harry Potter stuff floating around out there for sale, but J.K. Rowling doesn’t go around sending cease-and-desist letters to all those sellers.

Ironically, so many times in the music business, artists encourage fan art and expression; it helps them to build their brand and following. In fact, I see daily posts on my Twitter feed by the artists of fans’ work that they love. I’ve seen drawings of band members, bracelets and jewelry with the band name, and shirts with artists’ logos and lyrics all submitted by fans to the artists as away of showing their support. And so many times I find the artists so grateful for the allegiance and passion that they repost the pictures and encourage other fans to send in pictures. This is how you build a bridge to your fans.

In the music industry, it’s all about reputation: reputation amongst peers and reputation amongst fans. Few other things matter as much as those realities because those are the two realities that one can count on, particularly when things get tough. It can be a hard market, but if you’re an artist with a great reputation amongst peers, other artists will continue to want to play shows with you, vouch for you, encourage their fans to go see you. And your own fans will take up your flag. But if your reputation sucks, frankly, you’re lessening your chances of having any of those things.

Maybe Taylor Swift doesn’t care—I can’t and won’t presume to know. Here’s what I do know: her reputation is taking a beating in the music trenches, even if her wallet isn’t. 1989 sold a ton of copies and that’s great, but selling album copies doesn’t automatically rehabilitate one’s image amongst one’s contemporaries. Ironic though it may seem, the way things are going, Swift’s own fans are going to be a major headache for her camp in the future. Many of them feel betrayed, targeted, taken for granted. And that’s rule number one in this industry: never ever take your fanbase for granted.

 

Thanks to Mom for reading drafts of this.

 

Notes

[1] My first article on Swiftgate can be found here, with the follow-up piece here.

[2] This means that the poem I wrote at the bottom of my post last week is completely legal. (Though one could also argue quite successfully that it would be anyway whether Swift has been granted the rights or not since it falls under a creative parody license).

The Unflattering Spotify Light

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With the first month of 2015 under our belts, things continue on in the music industry that hearken back to the last quarter of 2014 in almost predictable ways. YouTube and Apple are trying new paths forward for their music services (which I will cover in later posts), but perhaps the most telling of dynamics is what’s going on with Spotify right now.

Most anyone who paid any bit of attention in October-November of last year will remember the meltdown between artist Taylor Swift and music streaming service Spotify so cleverly termed Swiftgate. Purportedly over compensation (or lack thereof) for music streaming royalties, the spat between the pop star and the streaming service was a true story with legs, continuing for weeks on end. As each side released statements following Swift’s pulling of her entire catalogue from the service, Spotify CEO Daniel Ek and Swift’s management engaged in a series of statements, each seeking to portray themselves in a positive light.

Many of us within the music industry suspected that Taylor Swift’s underlying motive was a PR move enacted to boost numbers of Swift’s upcoming album release (and one which absolutely worked). Swift’s October release of her album 1989 blew well past one million in sales by 2014’s end, and has now been certified 4x Platinum (in excess of four million copies shipped). [1]

At the time I predicted that the dance was not over—that things would continue to evolve in 2015—and they have: last week, Spotify released a statement noting the termination of its contract with PR agency M&C Saatchi PR, originally tasked with heading up the music service’s accounts in the consumer, corporate, and b2b arenas. The dropping of M&C is telling in more ways than either company appears ready to admit.

It is impossible to avoid the conclusion that Spotify dropped M&C because the latter botched Swiftgate. Whether originating initially from M&C itself, or from Spotify CEO Daniel Ek, it is clear that their subsequent comments on Spotify’s royalty rates and on the questions of fairness were neither well-timed nor well-received within the music community. Instead of resolving the Swiftgate debacle for the music service, it managed to stir up even more questions. What Spotify should have done (or had done on its behalf by M&C) in the course of Swift’s scathing comments is essentially recuse itself of the whole situation; their response only made matters worse. In the end, Swift got all the publicity she (most likely) wanted, and her album blew through the roof with record numbers for the year. Spotify, on the other hand, was cast, yet again, in the same light that has proved unflattering and awkward for other services like Pandora and Rdio.

Though it might be too much to assert that M&C had any control over those events, it is clear that whatever work it did in the wake of Swiftgate was at the very least misguided. In the music industry, he said/she said battles are fought out in the trenches of the fanbases, not in conference rooms, and not in statements released to the media. Though I think Swift’s move was intended more to benefit herself than her fans, a great many of those fans felt the opposite, and will migrate away from Spotify to find her music elsewhere. Swift achieved her goal by spinning the argument as being about her fans and about fairness for artists. Though the truth may be debatable, what is indisputable is that Swift came off to many as having taken proactive action for the sake of her art and fans.

Spotify (and M&C by extension), would have been well advised to spin Swiftgate as a pop star being presumptuous and out of touch with her fanbase. Instead, Spotify/M&C’s purely reactive response allowed Swift to spin the debate as being about royalty rates and artist compensation. Thus, in “commenting on Swift’s departure,” Ek ended up obliged to defend his company’s compensation policy as a whole. A simple statement by Ek that Spotify was disappointed to lose Swift’s catalogue, but that he respected her decision, would have taken the legs out of Swiftgate. Instead, his ineffective efforts to justify Spotify’s compensation policy gave Swiftgate legs, made Swift into the David fighting Goliath, and left Spotify with enough lasting bad press to make it look around for a different PR agency.

Spotify’s dance with Taylor Swift may now becoming to an end with its dropping of M&C as its PR agency, but Swiftgate opened the door for other artists to take shots at the company. Royalty rates are not about to get any better, and life for the Spotify camp is not about to get any easier concerning artist compensation. The streaming music wars have only just begun; hopefully Spotify’s next PR firm will find the right ammunition to fight them.

 

Thanks to Dad, Charles Jo, Scott Menor, and Terrence Yang for reading drafts of this.

 

Notes

[1] It is important to note that RIAA certifications such as gold and platinum do not always mean copies sold. Over the last few decades, certifications have extended to sometimes include multiple discs within one album (a double-album, for example), or simply albums shipped by the record labels to retail outlets. More information on RIAA certification qualifications can be found here.