Tag Archive for: business models

Here is a guest post excerpt from my friend and artist MC Lars from the Huffington Post UK.

“In last week’s State of the Union, President Obama stressed the importance of creatively revitalising our nation’s economy. He called for “an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values,” the blueprint for lasting domestic prosperity. There are some parallels to this shift in thinking in today’s indie rap game, specifically in application of sustainable new media economics.”

“What this means then is that in order for artists like me to survive, I must be creative with how I let people hear my music. A primary means of distribution in 2011 was my USB robot, a two-gigabyte hard drive keychain that housed all of my albums digitally. I also sell t-shirts with cartoon characters I draw myself and I try to print on shirts manufactured domestically when I can. 47% of my income comes from merchandise, 40% from ticket sales, and 13% comes from iTunes, Spotify or other paid music services through the internet. I used a crowdsourced funding site called Kickstarter to produce my last album, with added bonuses of drawings and personalized songs to the highest contributors.

If the internet were compromised or regulated to the point where the 13% of my traditional digital income (from iTunes, Spotify, and others) were to disappear, it could likely mean that people would turn to getting my music for free, which would then mean that I would need more ticket and t-shirt sales in order to maintain my income level. (My income, by the way, covers my expenses, taxes, and health insurance, and that’s it.)

“Economically, we are living in an era that takes us back to the punk and indie roots of the 70s and 80s. Musicians must be able to go out and perform for years in small clubs to tiny crowds; it’s the way one perfects his or her craft and pays his or her dues. It’s how bands like Black Flag and Minor Threat became legendary, they had explosive, powerful shows and were willing to sacrifice everything to make their music heard. Henry Rollins of Black Flag tells his story in his classic book of journals, Get in the Van, an important read for any indie musician today.

We live in an era of innovative fusion of old and new. Being a musician no longer means simply being a songwriter and performer. One must also know a little bit about business, branding, t-shirt design, social networking, production, publicity, accounting and tour managing.

Ultimately, what this is means is that if you own and run your own business, no one can take that away from you. (The MPAA and RIAA exist to maintain the status quo of the entertainment industry, but I don’t need someone with a large salary lobbying for my interests as an artist when that person is disconnected from the reality of new media economics that I’ve described above.)

The internet in its current free and open format is important to me as an independent indie rap musician and artist. In fact the internet is essential to me and to all of the other artists who are like me. The government’s harnessing and regulating the internet and its free flow of information would be a dangerous thing in that it could lead to government control of a very important channel of a portion of the income that I earn – and through which I express myself freely, exercising my First Amendment rights as an artist.”

Read the whole thing here from the Huff Post UK.

Here’s a great post by Mike Masnick.

“As you look through all of these, some patterns emerge. They’re not about getting a fee on every transaction or every listen or every stream. They’re not about licensing. They’re not about DRM or lawsuits or copyright. They’re about better connecting with the fans and then offering them a real, scarce, unique reason to buy — such that in the end, everyone is happy. Fans get what they want at a price they want, and the musicians and labels make money as well. It’s about recognizing that the music itself can enhance the value of everything else, whether it’s shows, access or merchandise, and that letting fans share music can help increase the market and create more fans willing to buy compelling offerings. It’s about recognizing that even when the music is shared freely, there are business models that work wonders, without copyright or licensing issues even coming into play.

Adding in new licensing schemes only serves to distort this kind of market. Fans and artists are connecting directly and doing so in a way that works and makes money. Putting in place middlemen only takes a cut away from the musicians and serves to make the markets less efficient. They need to deal with overhead and bureaucracy. They need to deal with collections and allocation. They make it less likely for fans to support bands directly, because the money is going elsewhere. Even when licensing fees are officially paid further up the line, those costs are passed on to the end users, and the money might not actually go to supporting the music they really like.

Instead, let’s let the magic of the market continue to work. New technologies are making it easier than ever for musicians to create, distribute and promote music — and also to make money doing so. In the past, the music business was a “lottery,” where only a very small number made any money at all. With these models, more musicians than ever before are making money today, and they’re not doing it by worrying about copyright or licensing. They’re embracing what the tools allow. A recent study from Harvard showed how much more music is being produced today than at any time in history, and the overall music ecosystem — the amount of money paid in support of music — is at an all time high, even if less and less of it is going to the purchase of plastic discs.

This is a business model that’s working now and it will work better and better in the future as more people understand the mechanisms and improve on them. Worrying about new copyright laws or new licensing schemes or new DRM or new lawsuits or new ways to shut down file sharing is counterproductive, unnecessary and dangerous. Focusing on what’s working and encouraging more of that is the way to go. It’s a model that works for musicians, works for enablers and works for fans. It is the future and we should be thrilled with what it’s producing.”

Read a lot more here.