I just got my hands on a cool new book called The Indie Band Survival Guide.

I did not have the chance to read the whole thing yet but I love it. It’s the most comprehensive such book that I read in a while, very well written, and one of the first ones that really looks forward and talks about all the tools that an empowered band should have in their arsenal: blogging, selling music online, getting music into podcasts, learning what to pay attention to when designing your own site, etc. I am tired of all the books out there that talk about labels and managers and agents, etc. but don’t give you any practical advice that you can use right now and in today’s new environment.

There’s many of these “Indie Band” books out there but for me this is one of the best.

Panos

Back in the day, not that long ago, record labels served four distinct needs for the artists they signed, without which it was impossible to have a meaningful career out of performing original music:

Production: They paired artists with songwriters and producers and gave them money to record records in big, expensive studios that sometimes took months or even years to make;

Distribution: Once the record was made, they loaded up millions of copies in trucks and shipped those records to all the important retailers. Their tight relationships with all the important retailers (Tower, HMV, Virgin, etc.) basically guaranteed them all important shelf space. No distribution meant no sales;

Promotion: They hired publicists and radio promoters and got the word out there about the record and the artist through interviews in major newspapers, ensured heavy rotation in major market radio stations, and got the video played on MTV. It was unlikely that an artist would ever find an audience without radio airplay, MTV support, or a big publicity campaign;

Professional Connections (Touring & Publishing): They helped artists promote the record by pairing them up with an agent that helped them get on the road to build an audience. Labels also helped artists by hooking them up with publishers (often in-house) which in turn connected them with film music supervisors, advertising agency execs etc. to further each artist’s earning potential and hence the money that the label made from their investment;

Just a quick glance at the four areas I describe above, show you that the cost of offering these services was enormous (it took an army of people and a boat-load of money to get past all the gatekeepers), which meant that in order to recoup one’s investment the sales needed to be equally high.

But in the past few years three major internet-enabled shifts have taken place that have effectively brought down this entire ecosystem:

1.    The digitization of music has made it possible for recorded music to be distributed online, for next to nothing, leading to commodization and the expectation that it should be free;

2.    Audiences, spurred on by the abundance of music on the net, have shifted their tastes away from mass-marketed, mass-selling artists, to more personally-discovered, niche-reaching music (major label CD sales are down by more than 45% since 1999);

3.    The internet has entirely evaporated the cost related to offering these services hence eroding the fundamental value proposition of the average label (witness the demise of many recording studios and large scale record retailers) but labels, caught with the baggage that legacy brings have been unable to move quickly to adapt;

I’ll talk more in Part 2 next week about how these changes have contributed to the rise of a whole new class of artists that I call the “Artistic Middle Class”  — and how these artists are using the net and their low-cost advantage to totally remake the music market.

Panos

The biggest (albeit relatively low-key) news in the indie scene this past week was the acquisition of CD Baby by Disc Makers.  I know both of the guys that run the two companies and I’ll admit that I was caught a bit off guard, but not surprised. The thing just makes sense for Disc Makers.

I’ve been talking a lot about the modern indie artist tool kit (more in a subsequent post). Every artist basically needs to focus on four key areas that affect their career: Production, Distribution, Promotion, and Connections (the last bit is where Sonicbids comes in).

As the world changed in the past few years, Disc Makers was caught without a real stake in any of these areas, other than manufacturing, which at some point will move entirely away from CDs and even disappear. Buying a real player in the distribution area like CD Baby is a natural move.

The real surprise for me is the fact that the founder of CD Baby, Derek Sivers — who I know well and is a fellow Berklee alumn – is moving on. Like with all companies and groups (Pink Floyd?), when the founder moves on there’s a real void left that’s hard to replace (though not necessarily impossible to overcome).  Will CD Baby be the same without Derek?

I have no idea, but if CD Baby was destined to be sold, then Disc Makers is the best home for it.

Panos

I just learned about the sudden death of soul legend Isaac Hayes at age 65.

I had the privilege of booking Isaac for about three years in the mid-nineties and those were some of the most fun tours that I booked in my entire time as a booking agent. This was at the time when Isaac starred as the Chef on “South Park” and his career was on an upswing after many, many personal set backs. “South Park” was a great gig for Isaac and it introduced him to a whole new audience. (A shame that it ended rather ignominiously after he had a falling out with the creators.) Booking a whole Europe tour around a song called “Chocolate Salty Balls” (it hit Number 1 over Christmas in the UK) was one of those Spinal Tap moments in life when you have to pinch yourself to see if it’s happening for real (I was about 25 at the time and for a kid from Cyprus, this was just otherworldly).

For those of you not familiar with Isaac’s music and voice, you should head over to iTunes and check out his catalogue. Isaac influenced a whole generation of songwriters and was the first guy to blend modern pop music with the sound of orchestral strings. You’ll hear (and even see) Isaac in everyone from Jamiroquai to Prince and Jay Z.  He was one of the first black songwriters to win an Academy Award (for “Theme from Shaft”) and he wrote and played on many Stax Records hits from the 60s and 70’s including “Soul Man” (yes, that “Soul Man”). In many ways, he was the prototypical empowered artist, always marching to his own funky drum beat.

Isaac, may you rest in peace.

Panos

An admission. I’m a football (soccer) jersey maniac. I started collecting them when I was 11 and have not stopped since. I must own well over 150 and I own every Arsenal home and away jersey since 1983. My most recent one (pictured below) is the new Arsenal away jersey that I bought here in the States two weeks ago. The catch? Official release day is today. Pretty cool (kinda like getting a pre-release copy of your favorite band’s album.)

Back when I was a kid in the early eighties, all football clubs relied on gate receipts as their only source of revenue (insert music business parallel: record sales). Sport was not yet a big business and no one was thinking about “revenue diversification” exactly. People were just happy to win a few championships and players did not make all that much money. I still remember that shirt sponsorship was prohibited and even brandmarks like adidas or Puma had to be covered when a game was televised. Back in those days a club like Arsenal would pretty much keep the same jersey year in and year out for about decade. No one ever thought of sponsorship or shirt sales as a viable way to make money.

Then all of a sudden, Liverpool FC ushered in a new era when in the early eighties did a deal with Hitachi, the Japanese electronics company, to sponsor their shirts. Purists freaked out and other clubs scoffed at the notion of having their shirts sponsored, but pretty soon Manchester United did a deal with Sharp; Arsenal with JVC; Manchester City with SAAB, Bayern Munich with Commodore, etc. Within a short period of time if your shirt did not carry sponsorship, you were not a serious club (Barcelona the only exception until two years ago when it gave in to UNICEF).

By the mid-eighties, as hooliganism drove many fans away from stadiums, football clubs realized that replica shirts can help boost sales and make up for lost revenue — so they started marketing jerseys as both a great affiliation statement but also a fashion accessory that they sold to millions of fans — some of who never paid a penny to buy a ticket for a match. Since then, club jerseys have been designed to look great both on the pitch (field) and with jeans. The David Beckham LA Galaxy jersey sold in excess of 750,000 in just a few months (at roughly $100 a pop, that’s about $75 million in gross sales). And if you take a look at any big club’s financials, replica jersey sales, shirt sponsorship and TV revenue collectively account for much more money than gate receipts do. (Adidas just paid the German national football team $298 million for the rights to make their jerseys; Fiat paid Juventus $134 million to be the sponsor on their shirt.) There are millions of Manchester United and Real Madrid fans out there that watch these teams on TV every week and wear their jerseys, but have never, ever, actually set a foot at either Old Trafford (home of Man. U.) or Santiago Bernabeu (home of Real).

I think the parallels with the music business are pretty obvious. The record labels will have you believe that just because record sales are declining, the music business is about to vanish. Yeah, right. As football clubs discovered almost three decades ago, crisis can lead to opportunity. Just as a modern football club’s income statement has revenue generated from TV rights, sponsorship, fan clubs, jersey sales, merchandise, video games, concession stands, branded gear, etc., the income statement of the modern empowered artist will be far more diverse than just record sales and touring income.

That’s what I’m talking about when I refer to the Artistic Middle Class: artists that realize that their income will no longer be dependent on a record label but on everything from brand sponsorships, sync licences, fan donations, touring, publishing, merchandise sales, and yes, shirt sales.

People like me will line up to buy them.

Panos

P.S. Is this shirt the coolest or what?

As I promised a month ago, I’ve started a series of member dinners/ lunches/phone calls/coffee-hours around the country to solicit feedback from all of you about Sonicbids.

I want to know what you like about it, what you don’t like about it, and how we can make it work even better for you. Running a company is kind of like being in a band: you need constant feedback in order to get better and improve and to keep delivering the goods.

The New York dinner took place last Wednesday in a Greek restaurant called Ethos (I try to have these events at Greek or Mediterranean places as they seem like natural extensions of my house, more hospitable if you will – plus I know what to order). Aliki in our office (also from Cyprus) did a great job arranging the get-together.

I really enjoyed meeting everyone who came to the dinner: Adam (who manages Justin Nozuka); Jessi (who I just found that she also works at BMI), Oli (who is a fellow Berklee alumnus); David from the d_Cyphernauts (a member since 2004); Josephine from France; Eric from the band Ming Dynasty and who just booked a tour using Sonicbids; and Natalie Gelman, who’s amazing feedback and ideas I thoroughly enjoyed (I also learned a whole lot about the way that she uses Twitter).

I am always blown way by two things: the diversity of the Sonicbids membersip and how entrepreneurial Sonicbids members are. This is what I mean when I talk about the “artistic middleclass”: people from all walks of life, who make a living playing music, and who feel empowered to pursue their careers by leveraging all the tools that the Internet offers.

Basically, the constructive feedback that I got was this:

- Sonicbids offers a great place for bands to find and book gigs and many of you are using it as an integral tool to book tours, get licensing deals and develop your career. This is good stuff but of course I am out there looking for things to improve. These are:

- We need to offer a whole lot more information with our gig listings. Right now, the way that gig listings are designed, don’t always give the necessary information to decide if something is always appropriate to submit to;

- We need to offer more community tools so artists can interact not just with promoters but with each other;

- The ability to read and leave feedback for promoters and listings is important. In general, more information sharing is a must;

- Artists want to get feedback too;

- The whole “all genres” thing in the gig listings is annoying. No festival books all kinds of genres;

- It would be great if for certain types of gig listings (like colleges), we enable artists to choose an auto-fill options so you don’t have to type in the same answers over and over again;

- The status manager is problematic and it needs to change. Too many promoters just don’t ever bother getting back to bands after they submit and pay their hard earned money;

- More gig listings that offer access to radio stations and colleges would be great;

What I find interesting is that your feedback is consistent. I got very much the same stuff from the lunch that I hosted in Toronto and the call that I had yesterday with a few members in DC (more on this in a subsequent post). Of course I will continue being out there, meeting many of you and I am determined to stay on top of what we need to do to keep being an important tool for developing your DIY careers.

The good news is that we are listening. Many of these changes are already in the works and nothing will make me happier than launching some of these live in the next few months.

Stay tuned and keep those suggestions coming in. More updates shortly.

Panos

Last week Live Nation announced that it did another so called “360” deal, this time with the band Nickleback. (Nickleback is for all intents and purposes the musical equivalent of a McDonald’s Value Meal: cheap, bland, one-size fits all and unhealthy but some will tolerate it if desperate).

According to Live Nation the deal “will enable us to fully capitalize on our vertically integrated platform” and “structured to increase our revenue and cash flow potential significantly, while reducing our risk profile… this investment is cross collateralized… ” and on and on.  I don’t know about you, but I have a hard time imagining John Hammond, the legendary A&R man from the 50s, 60s and 70s, joyfully making that statement after signing Bob Dylan or Bruce Springsteen to Columbia Records back in the day. Ahh, times they are a-changin’.

For those of you who have not heard the term “360 Deal” it basically means that an artist (though I hesitate to use the term to describe Nickleback) gets one big advance check from a company like Live Nation, which in exchange gets rights to that artist’s record sales, touring income, merchandise sales, publishing, etc. In the past nine months or so, Live Nation has spent over half-a-billion dollars making these types of deals with Madonna, U2, Jay Z, the Jonas Brothers, Shakira, etc.

If you read most of the press articles out there, they’ll have you believe that these deals are the savior of the modern music business and that companies like Live Nation are pointing the way to a brave new future. Moses and Abraham Lincoln all rolled into one. Wall Street’s response to all these cheerful pronouncements? Since Live Nation started doing these deals, its stock price is down about 53% compared to an 18% drop of the Dow Jones average during the same period.

I’ll let the financial analysts tell you why they think Live Nation is worth less than half it was last October but my problem with these deals boils down to this:

First, there’s nothing original about them. Berry Gordy did these deals with Motown 45 years ago. Groups like the Supremes, the Temptations and the Jackson 5 were literally owned by Motown. Record sales, touring, TV appearances, likeness, TV rights etc.  The whole thing. It was good while it lasted and then the artists decided that they did not like to be told what to wear, how to walk or what kind of music they should perform and how often. No one likes to be “owned”.

They don’t benefit the artist. Let’s face it, there is not a single company out there that can be equally adept at selling records, selling tickets, producing tours, moving merchandise sales, running websites, administering publishing rights, managing fan clubs, monitoring airplay, signing sync-licensing deals, exploiting image rights, running PR campaigns, managing social media sites, monitoring blogs, etc. That control should remain with the artist and his/her team who outsource all these activities to a host of other entities who are specialists. Specialization not concentration is the future.

They don’t benefit the music-loving public. When you take big bets with advances, your first and primary motive is to recoup – quickly. Time and again, when money is the only motivation, art, and by extent the public, suffers. Just check out any Marlon Brando movie that was done just for the money. Or, any Elvis Presley post-army service movie for that matter. Or most reunion tours. There’s no spark, no passion, no oomph. For art to flourish, there always needs to be a patron, but the artist needs to control the timeframe and the creation.

They don’t benefit the dealmaker. I personally fail to see how blowing the equivalent of a small nation’s GDP on a bunch of stars way past their earning prime makes any sense. I mean, how many more records and tours does Madonna have in her? Even for younger groups, the deals only make sense if they are able to reach a mass audience. But as all trends show, the future of the music business is not mass, it’s niche.

They are not the future. One just needs to take a look at two trends to realize that the future of music is not in mass-reaching artists and bloated big budget marketing: record sales of major label releases are going down each year; and the average age of artists that consistently sell large seat venues is going up. The future belongs to the niche.

As I mentioned many times before, the future of the music business is not in the mass-reaching elite that dominated the industry for so many years, but in the niche-reaching artistic middle class that controls both the means of production and distribution and marketing. These middle class artists will outsource all non-essential activities not to one firm but to a host of specialists.

Panos

Allow me to apologize for the short silence with my postings — just returned from a much needed vacation (though a bad case of salmonella kinda took the air out of the fun).

When I was at NXNE I had the chance to talk with Bambi Blue from TransCanadaRadio.com and she recently posted the MP3 clip of our interview on their website. You can check it out, at TransCanadaRadio.com. While you are at it, check out the rest of the site and interviews that are posted there.

This is what I am talking about when I say that bloggers are quickly becoming as influential in the new music scene as more main stream publications that everyone knows about but many of you probably don’t bother reading any more.

Panos

Just back from Toronto where I attended NXNE.

I moderated a panel with the guys who book SXSW, CMJ, Eurosonic and Hillside Festival and the topic was “I’m a Band, can I Play Your Festival?” I loved the guys on the panel, they were all pretty engaged and entertaining, and we had a great turnout too. (A special thanks to Ruud from Eurosonic who missed the awesome Netherlands (4) – France (1) game to be on the panel. If you love football as much as I do, you know that’s a big deal.)

Basically, it boils down to this: always keep your Sonicbids EPK updated with the newest info and dates; pay attention to your bio; do use social media like Facebook and MySpace; look to play gigs outside your local area; befriend bloggers and get write-ups; don’t give up even if you are rejected the first try; and (of course) play/write great music.

After the panel I had the chance to catch up with a number of Sonicbids members, which I always love. The guys from Hey Mister told me that they had booked a number of dates since March 2008 when they joined Sonicbids including MyCoke.com, Mobfest, NXNE and the Denny’s adopt-a-band program. This is the stuff that makes my job fun and rewarding.

I also had a great time hosting my first member get-together at the restaurant Kit Kat on King Street (do check it out, it’s an awesome little place). My plan over the next year is to spend as much time in different cities meeting Sonicbids members in informal settings like lunches and coffee shops and to hear straight from you what we need to do to make Sonicbids better. There is nothing quite like hitting the road for me and meeting our community. I love it.

At the lunch I met with Maurice from Whiteboy Slim (Canada); Eric, Justin and their manager Chris from Dean Lickyer (Canada); Rocco and Matt from This is Radio Freedom (UK), Greg from Flowers from Hell (Canada and UK), Lenka from Sisters of Sheyville (from the Czech Republic and now living in Canada) and — as luck would have it — our lovely bartender Stella also happened to be a Sonicbids member (I can’t tell you how many of these random meetings I have with Sonicbidders). This is what I am talking about when I say “the artistic middle class”.

All these bands/artists were playing NXNE through Sonicbids but we had a good chat about the things they love about the site (email alerts; tons of gigs; convenience; great information; etc.) and of course they gave me some candid feedback about what needs to change. Some of the stuff that I heard (and of course I know about many of these through the forums and we are already working on changes):

- The way the status manager works needs to change, promoters just don’t get back to all the submitting bands by the time they say (or ever);
- Offer more visibility into how promoters review the bands that submitted to their listing (i.e. how Sonicbids works on the other end);
- Allow bands to leave feedback on listings;
- Change the whole “All genres accepted” listings as that’s not the case most of the times;
- It would be great to have some visibility into how many submissions a gig listing gets (ranges, not necessarily exact numbers);
- Offer more gigs that pay money;
- Do everything we can to get rid of dishonest promoters;

I love getting direct feedback as sometimes it both confirms that we are working on changing the right stuff, and every once in a while, I do hear things that are so damn obvious it just hits you like a club over the head. Expect to see many good changes over the next 90 days and to hear from me about my next get-togethers – that’s a promise.

By the way, go to NXNE next year if you can. It’s a fun festival, casual, the music rocks, their mascot Sketchy is the best damn festival puppet I’ve seen, Toronto is a fantastic city to visit (at least in the summertime), and Canadians are the most hospitable people you’ll ever meet.

Check out the photos from the lunch.

Panos

P.S. Thank you Bambi Blue from TransCanadaRadio.com. I loved our chat.

I love books. Like with girls, I didn’t really care about them until I turned 12 or so (Madonna was a turning point). But nowadays, I hardly ever walk into a Barnes & Noble and not buy one. Kimberly, my wife, thinks I’m a book addict. At least they’re a legal high.

Anyway, Jim Champy, the author of a seminal business book called “Reengineering the Corporation” recently wrote a whole chapter about Sonicbids in his new book called “Outsmart! How To Do What Your Competitors Can’t”. As an obsessive book reader, I find that pretty cool.

So, besides reading about Sonicbids, why should you care about Outsmart? For starters, because starting a business and competing for customers is no different than starting a band and working hard to get a following. It takes energy, time, perseverance and, most importantly, you realize that there’s only one thing that matters and that’s hard work.

Artists and entrepreneurs have more in common than they think. They both start with a blank piece of paper (or canvas) and what they make of it is what makes all the difference. Personally, I feel that you can learn more about how to make a living in the music business by reading business and marketing books (and the Wall Street Journal) than by reading boring trade mags.

If you have time and are thirsty for some good new marketing tricks, check out Outsmart! And no, I do not get royalties.

Panos