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The New Artist Model is all about looking at your music career in the same way an entrepreneur looks at a startup company. You are a music entrepreneur! And there’s no better entrepreneurial book out there than The Lean Startup. I would recommend everyone giving it a read, but Ed Rex, a musician a CEO of Jukedeck, has laid out a few of the main points in this article. This is just an excerpt, but you can check out the full article on Hypebot.

Create Minimum Viable Tracks

It used to be the case that software companies would spend a year or more working towards a big release, moving through various phases of development one at a time and launching into the unknown with a ‘no going back’ approach. This is known as the Waterfall method. It’s now been widely replaced by Agile, which involves building fast, releasing a Minimum Viable Product as early as possible and learning from feedback.

A composer might spend years on a piece, working in complete solitude until the last note is in place. What if, at the premiere, no one likes it? Shouldn’t that have been found out sooner?

Enter the Minimum Viable Track. When you’re recording an album, why not play the first takes to as many people as you can, before you embark on weeks of editing and post-production? If no one’s going to buy it, doing that post-production is a waste of time — time you should be spending writing new tracks. And you need to find that out as early as possible.

Iterate & Pivot

Startups are obsessed with iterating: constantly trying new things and experimenting with new features until one proves popular.

There’s no reason, as musicians, we shouldn’t do the same — that is, once we’ve got the early versions of our music in front of our audience, start responding to their feedback. If there are bits they like, concentrate on those — if there are bits they don’t, scrap them and try something else in their place. I tried this recently with a song I’m writing — instead of spending months working on it on my own, I put together a rough and ready demo on my iPad, sent it to a couple of people, and immediately found out there were a couple of lyrics they thought let the rest of it down. So out went those lines, and in came a series of new ideas, which I kept changing until they had the desired effect — the approval of these early listeners.

What if you find from your early demo that people basically don’t like what you’re doing, full stop? While this is never nice to hear, it’s better to find out early than keep going with something no one will like. In this case, in the tech world, you’dpivot — that is, change course and try something entirely new. Pivoting isn’t a sign of failure — it’s a badge of honour, a sign that you’re willing to take tough decisions to get to a product that people actually want. Indeed, some of the biggest tech companies out there performed early pivots. Twitter? Originally aplace to subscribe to podcasts. Starbucks? Started out selling espresso makers.

So if your early feedback tells you you’re writing music people don’t like, why not try something else? There’s nothing wrong with pivoting.

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TheNew Artist Modelis an online music business school for independent musicians, performers, recording artists, producers, managers and songwriters. Our classes teach essential music business and marketing skills that will take you from creativity to commerce while maximizing your chances for success. Get 5 free lessons from the New Artist Model online courses when you sign up for our mailing list.

 

Top 10 strategies for indie musicians

Photo credit: http://bit.ly/1dCOr9T

One of the best ways to grow is to look at what’s worked for other indie musicians and adapt it to your own career. I’ve compiled 10 great strategies with 10 real examples to get you going. A lot of musicians I’ve talked to think they can’t start making strategies to move their career forward until they’re making money, until they take some business classes, or until they get a manager. The coolest thing about these strategies is that you can start using them TODAY.

Here’s strategies 6-10. (You can find part 1 right here.)

6. Find Your Niche

The best way to get a really dedicated fan base is to start small. Start local and move up from there. Just focus on your town or city and build up a strong following. Stay after your gigs to get to know your fans. Give them something really valuable and unique. Once you’ve conquered your local scene, move on to the next city. Its a long process, but in the end you’ll have a lot of people who are very excited about your music.

In the same way, you should really focus in on a niche. This can be anything you want – a genre, a attitude, a belief. Aligning with a niche creates the opportunity for a connection – chances are there’s a lot of other people out there who are just as excited about that niche as you are!

Eileen Quinn, is a songwriter and sailing enthusiast who combines her two passions into one by writing sailing songs. She targeted a market that isn’t already saturated with music – the sailing market – and was able to really be the star. It may seem like she limited themselves in terms of audience, but in the mainstream music industry they would have been just another artist. In their specific niche, however she was able to really stand out!

7. Get Your Fans Talking

As an indie artist today, you’re most likely in charge of your own marketing. Marketing can seem like a completely daunting task if its just you trying to get the word out, but you actually have a whole team of marketers just waiting to share your music – your fans!

With the constant presence of social media and the internet, most music fans today are bombarded with more information than they can possibly process. As a result, most music fans look to recommendations from trusted sources for new music. These trusted sources could be a good music blog but more times than not it comes from a friend.

The Wild Feathers are a rock band out of Nashville, TN. In the week leading up to the release of their self-titled debut album, The Wild Feathers made the album available early at their live shows. On top of that, the band gave their concert-goers a little surprize. Every album sold included two CDs – one to keep and one to share with a friend. (Source) By selling the album early they are specifically targeting their superfans – the ones who would travel hours just to get their hands on the album before everyone else. Because they are so passionate about the music, superfans are also most likely to tell their friends about The Wild Feathers. Giving them an extra CD to do just that really empowered their superfans to share.

8. Develop a Brand Strategy

“Branding” and “artist image” aren’t new concepts at all. Since the beginning of music artists have been defined by genre and personality attributes. Especially today, there are so many people out there trying to make it as a musician that you really need to consider why people would buy your album or go to your show instead of someone else’s.

There are two common approaches when it comes to defining a brand. Some musicians like to list every single genre they draw influence from. On the other end of the spectrum, some artists are afraid to even approach the task of labeling themselves. No brand is just as bad as a confusing one.

You don’t have to confine your brand to just musical style. Weave in elements of your personality, your beliefs, and your attitudes. Before  Sum 41 made it big, they had a hard time getting a record deal because many labels thought they were just another Blink 182 imitation band. The labels only heard one dimension of the band – their sound. It was their image, personality and attitude that really set them apart and got them the deal in the end. The band took camcorder footage of them goofing around and edited it into an audio-visual EPK. The resulting seven-minute hilarious video showed the labels that they were more than just punk music. They were characters and they were very good at projecting their character through media.

9. Find a Balance Between Free and Paid Content

Your music is valuable, and you can ask people to pay for your music in a variety of ways! Remember that money isn’t the only form of payment that has value. Information can be just as valuable or more than cash in many instances. Free music is one of the most effective ways to grow your fanbase. Even big-time musicians like Radiohead and Trent Reznor have used free music to their advantage. The key is to have a reason for free.

When trying to navigate the realm of paid content don’t let yourself be restricted to the typical music products like the CD and tshirt. Services like BandPage Experiences allow you to sell unique products and experiences to your fans. The sky’s the limit, and the more personal the products and experiences, the better. Rock Camp used a BandPage Experience to host a contest, allowing guitarists to purchase entries to win a spot at the Ultimate Musician’s Camp. Anberlin used a BandPage Experience to sell all access passes to their tours.

10. React to Opportunity

In music, opportunities pop up when you least expect them, and it’s your job to be ready! These opportunities could be anything from a pick up gig, to a publishing deal to a chance to collaborate with a local musician. Either way, the artists that can react quickly are the ones who succeed. While you want to take the time to weigh your options, remember that overthinking an opportunity can be just as bad as under thinking. There comes a point where you need to just decide to take the leap or not!

Amanda Palmer made $11k in two hours by jumping on an opportunity. (Source) Palmer was tweeting with her followers about how she was once again alone on her computer on a Friday night. Fans joined in the conversation and a group was quickly formed – “The Losers of Friday Night on their Computers.” Amanda Palmer created the hashtag #LOFNOTC and thousands joined the conversation. When a fan suggested a t-shirt be made for the group Palmer ran with the idea, sketched out a quick shirt design and threw up a website that night. The shirts were available for $25 and two hours later Palmer had made $11,000!


To learn more strategies that you can be applying to your music career right now, signup to get our most popular ebook, Hack the Music Business for free. 

Photo credit: http://bit.ly/1dCOr9T

Photo credit: http://bit.ly/1dCOr9T

One of the best ways to grow is to look at what’s worked for other indie musicians and adapt it to your own career. I’ve compiled 10 great strategies for indie musicians with 10 real examples to get you going. A lot of musicians I’ve talked to think they can’t start making strategies to move their career forward until they’re making money, until they take some business classes, or until they get a manager. The coolest thing about these strategies is that you can start using them TODAY.

Here’s strategies 1-5. (You can find part 2 right here).

1. Make a Plan from the Start

Making a great plan is one of the best ways to get to that music success you deserve. Not only do concrete goals give you something to aim for, they also help you decide what your first step should be.

Try to make your goals as specific as possible. Instead of saying “I want to be rich and famous,” try something specific like “I want to be able to be a full time musician with a yearly salary of at least $75,000 and be able to tour outside my home state.” Break down your lofty goal into smaller tasks like “gather contact information for local venues,” “contact 5 venues this week,” and “connect with another band to share a gig.” Suddenly finding a way to reach that goal becomes more manageable.

From the start Karmin knew they wanted to be a pop duo targeting a young teen audience. Manager Nils Gums suggested the duo cover current popular songs to get in front of their target audience. They followed the charts and consistently covered the most popular songs every week. The important takeaway here is that Karmin knew their goal, they made a plan to get there, and they stuck with it. If they had given up on the cover strategy after only a few weeks, they would never have gotten to where they are today.

2. Leverage Your Copyrights
Your copyrights are your business. They are your assets and your products, so it makes sense to take some time to understand them. You don’t need to be on the same level as a big-shot entertainment attorney, but it helps to have a general understanding of copyright law.

There are two kinds of copyright: composition and sound recording. Copyright is created when a musical idea is put into tangible form. So when you write that song down (composition) or record it (sound recording) you own the rights!  All those rights are exclusive, meaning you, and only you can leverage your song. Remember that copyrights are power! You own the copyrights, so you have the power. Think about it, without your copyrights would labels or publishers have anything to sell? Lots of musicians have been realizing this and have figured out cool ways to leverage their copyrights.

The Happen Ins are an Austin-based rock band that were featured in a catalog from the clothing company Free People, a corresponding video, many blog posts, and played at the catalog release party. In order to grow their fan base, the Happen Ins offered a free download to Free People’s customers. In many cases this exposure can be far more valuable than money.

3. Focus on Time Management

Today’s indie musician plays the part of the artist, and the business professional, and as a result, many find themselves juggling entirely too many tasks. It’s great that artists today can be 100% in control of their career, the problem comes when you can no longer find enough time for what matters most – your music!

If there’s anything you are doing that’s not bringing you closer to your goals, stop or take a closer look.  If you’re spending hours each day on tasks that don’t have much benefit, eliminate, simplify, postpone, or delegate to your team members. Try to prioritize the list. More urgent matters and tasks that you keep putting off and putting off should have a high priority. AND REMEMBER, make time for your music!

Michael Shoup is a musician and entrepreneur who turned his career around and started making profit with time management. After graduating college with a Bachelors degree in music, Shoup started his career as a musician and effectively gigged himself into $6,000 of high interest credit card debt. Time management has helped Michael Shoup become debt free. On top of that, he’s managed to self-fund an album, started a music marketing agency, 12SouthMusic, and created a social media app, Visualive.

4. Build a Team that Grows with You

DIY may not be the best option for indie artists. There are a lot of artists out there with excellent business chops, but they’re still not experts. And that’s okay, because you have more important things to do like creating music! The key is to find a team who is motivated and passionate. Instead of DIY, move towards a do-it-with-others (DIWO) strategy.

Your team doesn’t even have to be seasoned pros. If you have a band you’re already way ahead of the game. Everyone has their own unique skills, so take advantage of that!

Pop singer/songwriter Betty Who was able to be really successful with a team made of college classmates. Producer Peter Thomas and manager Ethan Schiff attended Berklee College of Music with Betty Who. With Peter Thomas she was able to find and really latch onto her signature pop sound, and Schiff helped set her up on the business side of things. Betty Who’s “Somebody Loves You” began drawing the attention of the pop music world after the release of her first EP The Movement in spring of 2013. In September 2013 the song was featured in a viral gay marriage proposal video and just a few days later she was signed to RCA Records.

5. Get out There and Network!

Networking is really important to success in music, but it’s easy to get overwhelmed with internal tasks and forget to take the time and introduce yourself. You don’t need a big speech or a prepared pitch. Just get into the habit of introducing yourself to one person at every show you play or at every studio you record in. Talk to the guy in charge of the soundboard, maybe he loved your show and wants to produce your next album.

Remember, networking is a two-way relationship, and collaboration is usually the best way to promote this win-win situation. If you collaborate on a show, a song, or a recording, both of you will be exposed to the other’s fanbase!  Always remember to give before you ask. Do something for someone and they will remember you.

Vinyl Thief used their extended network to find success. The band released their first EP, Control, in 2010 but were disappointed in the results. They called on a former high school classmate, now music marketing graduate, Wes Davenport who started working on improving their marketing efforts. Davenport helped them grow their fanbase through the digital releases of single, White Light, and second EP, Rebel Hill. (Source)

 To learn more strategies for indie musicians that you can be applying to your career RIGHT NOW, sign up to get a free copy of our most popular ebook, Hack the Music Business.

 

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So we’ve covered the fact that many musicians don’t know the next steps they should be taking in their career and many more don’t have enough time to get everything done. Now, we’re going to address both of those problems with a method commonly used by entrepreneurs – a business plan, or in this case, a musician career plan.

I know, most of you probably didn’t get in to music to write a business plan, but if you’re really serious about making a living off your art, it’s an invaluable resource that will help you succeed. Think about all those choices you face everyday. How long should you spend on social media? Which social media channels should you be on? How much time should you dedicate to touring? Is crowdfunding the right way to fund your album? If you have a plan in place that states where you are, what you’re focusing on, and where you want to be in the future, these choices become a whole lot simpler.


If you need more guidance on setting your goals and putting a plan in place that will set you up for success in music, we have a free workbook that you can download right here. Learn how to create a unique plan for your own music career and start putting it into action today!


1. Business Structure

You probably don’t think of your band as a business, but that’s exactly what you are. A lot of the professional bands and musicians out there even go so far as to organize themselves into a Partnership or even a Corporation. You don’t have to go that far quite yet, but you need to think about what everyone’s roles are within your business and how each moving part works together to make one whole unit. How do you communicate with each other? Is one person responsible for decision making or does the whole group vote? Talking about these things up front will make everything run a lot smoother and more efficiently.

2. Revenue Streams

There’s more revenue streams out there beyond just selling albums and singles. Of course, the revenue streams you draw on depend entirely on your career focus. A songwriter will pull from different revenue streams than a recording artist. The main point here is to be creative with it! The music industry is ripe for innovation. Sponsorships and brand partnerships have grown exponentially lately. Some musicians even make money from exclusive membership sites.

3. Booking Strategies

Playing gigs shouldn’t just be something you do on the side. It should be part of your overall strategy. Depending on your goals, you can use your live show to forge a deeper connection with your fanbase, spread awareness for your music to a new city, or meet new collaboration partners.

What’s your musician career plan?

Goal-setting-plan

Running blind never got anyone anywhere, especially not in the music industry. Not only do concrete goals give you something to aim for, they also help you decide what your first step should be. I know, everyone wants to be a rich and famous musician, but as you’ve probably realized, a vague goal like that leaves you discouraged and confused on how to move forward.

Before you set any goals, you’ll need to do a little soul-searching. Figure out what you really want and how much time and dedication you are realistically going to put in. If you have a team, like co-writers, band members, or a manager, make sure everyone is on the same page. The key here is to be as specific as possible. Instead of saying “I want to be rich and famous,” try something specific like “I want to be able to be a full time musician with a yearly salary of at least $75,000 and be able to tour outside my home state.”  Or whatever your number is.

On top of that, you’ll want to start mapping out some milestones or tasks within each goal. Breaking your goals down into small, achievable steps helps keep you motivated and positive. Think about the goal we just set above. Break down a lofty goal into smaller tasks like “gather contact information for local venues,” “contact 5 venues this week,” and “connect with another band to share a gig.” Suddenly finding a way to reach that goal becomes more manageable.

With so many apps and services available today, many indie musicians suffer from choice paralysis. What tool should you use to build your website? What company is best for digital distribution? What social media sites deserve your attention? The choice is especially daunting when money is involved. No one wants to fork over cash for a service that may not work out as planned. So how do you get past these decisions? While research is your best friend in these situations, keeping your goals in mind will also help. Every single time you’re faced with a choice, ask yourself: “What option brings me closer to my goals?”


Download my most popular ebook, Hack the Music Business, for free and get more indie musician strategies and case studies.


One band that used goals and planning to their advantage is Karmin. From the start they knew they wanted to be a pop duo targeting a young teen audience. Originally, they were releasing original music but weren’t getting much traction or interest. Manager Nils Gums suggested the duo cover current popular songs to get in front of their target audience – these were the songs that young teens were searching in YouTube. They followed the charts and consistently covered the most popular songs every week.

It took time, and a lot of covers before one of Karmin’s covers went viral. The important takeaway here is that Karmin knew their goal, they made a plan to get there, and they stuck with it. If they had given up on the cover strategy after only a few weeks, they would never have gotten to where they are today.

Want to know the other 9 musician mistakes?

  1. You Aren’t Leveraging Copyright
  2. You Skip Time Management
  3. You Don’t Have a Team
  4. You’re Not Out There Networking
  5. You Don’t Focus on a Niche
  6. You Don’t Let Your Fans Market
  7. You Don’t Have a Brand Strategy
  8. You Overuse Free Music
  9. You Don’t React to Opportunity

New-Artist-Model

In the New Artist Model online course we take you through the process of creating your own goals and building a plan to achieve them.  Amy Heidemann from Karmin studied and worked with Dave Kusek at Berklee and this course will bring YOU the fresh and practical steps and advice that you need for making it in the music business today.

 

Photo by smaedli

Photo by smaedli

The bigger the industry, the more powerful it’s smallest players. That saying is derived from John Naisbitt’s book, “Global Paradox,” and while it was meant to describe the global economy, it holds true for most industries as well – especially the music industry.

The music business is a huge multi-million dollar industry with hundreds of thousands of players. Big record companies can throw around huge amounts of money to make things happen for their artists, and as a result, super star acts seem to snowball out of control while smaller artists struggle to just get by. As an independent artist, its easy to feel trapped by your small size. You can feel like you can’t possibly get the same kind of success without the big marketing dollars and top-of-the-line production quality. That’s one way to look at it.

There is another way to see your situation. Instead of that depressing outlook, keep Naisbitt’s thoughts in mind. The bigger the industry, the more powerful it’s smallest players. This means that the most powerful player in the music industry is YOU – the indie musicians, indie labels, and music entrepreneurs. Power doesn’t have to mean money, influence, or even fame. Power can be the driving force behind the industry – the force that brings about new ideas, the force that paves the way for the future of the industry.

Big companies can’t be as creative with their business.  When there’s that much money being thrown around, safety is key. They stick to the tried and true for the most part. If they try something new for the release of their top artist’s album and it flops, they will miss out on the millions of dollars in sales that keep their business running.

The small players, on the other hand, don’t have as much to lose. A musician just starting out can experiment with a new album release strategy or promotion campaign. A music entrepreneur can start a business around a completely new concept that the big players are afraid to experiment with.

More often than not, its the smaller players that come up with the new ideas that drive the music industry forward. After they have been proven, these ideas are adopted by the big companies and artists.

Don’t look at your size in comparison to this massive industry as an inhibitor. Instead, view it as a freedom. You don’t need to be afraid to experiment and try new things. YOU are the driving force behind the music industry.

Are you using YouTube to its full potential? For many artists, YouTube is a secondary thought. Lots of musicians will simply put their music, music videos, and vlogs up on YouTube without much thought and then forget about them.  If they get a lot of views it will be a nice surprise, but many don’t do anything to help their music and videos get those views.

The truth is, like everything in the music industry today, you need a plan if you really want to get the most out of YouTube. Figure out what kind of videos best fit with your image and brand as an artist. Do a little experiment to see what your fans like watching. Release 2 videos on the same day, promote them equally, and see which gets the most views after a set period of time. Depending on your music, personality, and fan relationship you could focus on cover songs, original music videos, vlogs and behind-the-scenes looks into your life and musical career, instructional videos, or live footage from shows.

Here’s some misconceptions many musicians can have about YouTube and how to fix them to create a great strategy:

1. YouTube is a secondar, tertiary, or more like septenary focus.

Most times when we’re talking to creators, they approach YouTube with a “set it and forget it” mentality.  They upload their videos onto the platform (“set it”) and forget any strategy around how to amplify viewership.  

You can absolutely build an audience with new music videos, but there are countless ways to help increase views.  Your keywords, metadata, and release strategy all play a large role in discovery.  Don’t tag things you think will get you views, only relevant keywords.  And use every space!  Fill in as many sections of the metadata as you can: album title, song title, ISRC, UPC, etc.

When you finally get through the upload process, tell people about it!  Tweet it, post it on Facebook, share it with your Circles on Google+, and send it to any blogs or journalists who’ve written about you in the past.

 

2. Artists under estimate the power of the audience on YouTube.

Not only does YouTube have an enormous and rabid community, but they have a fan base incredibly eager to discover new content of all kinds, especially new material from talented musicians. Think of YouTube as the modern-day equivalent to CBGB, Troubadour, the Fillmore, or the Roxy, except potential fans are behind a screen at any given moment instead of hanging around by the bar.  

And, who knows, maybe there’s a young, longhaired Rick Rubin looking to lay down some bass on your punk band’s new single. Remember that YouTube is the second largest search engine in the world and people want to discover your music.

 

To read the full article and learn about the other 3 misconceptions, visit Digital Music News.

 

Getting creative with your marketing is a great way to stand out from the crowd and really engage your fans. Muse recently ran a marketing strategy titled The Bank of Muse, based off a previous Foo Fighters campaign, In Rock we Trust. The band printed their own currency, the Muso, and distributed the bills at their live shows with a confetti cannon. From these bills, fans could visit the printed link to unlock content.

Lee Martin created both marketing strategies. He explains the strategy on his blog:

I was approached by Muse in April to help develop an interactive campaign that would exist alongside their massive European summer tour both online and at the shows starting May 22nd at Ricoh Stadium. As it turned out, their team were fans of the In Rock We Trust Foo Fighters FOO bill confetti to online campaign I was recently a part of, so we decided to expand upon the concept so that it could exist over the 3-month lifespan of the entire tour while hopefully staying interesting enough for the fans to keep caring.

On the back of each Muso and printed within the tour program, was a link to the Bank of Muse. Fans visited this URL via their mobile devices at the show (or when they returned home) and were prompted to make their first deposit to the bank in order to contribute to a global financial ticker which would unlock exclusive tour content as certain targets were met. Mobile was very important here, because we actually served the behind-the-scenes instant-grat video of Dom to each new account holder, allowing fans to participate right from the show.

Our content rollout strategy was kept very loose in order to respond to fans’ reactions throughout the tour, rather than get locked into something that might fail. In the end, we released several videos, photo galleries, and downloads. We also put together a mid-tour crowd-sourced video campaign for fans attending the Paris shows. It was really convenient to have the app setup to market this before, during, and after the event.

This marketing strategy effectively connected the online and offline experience for fans. It also got fans to work together to unlock content, creating a stronger community. Instead of unlocking individual content, fans contributed Musos to a global total.

To read more about The Bank of Muse, visit Lee Martin’s blog and check out this article on Hypebot.

Do you want to create a successful career in music?  How you think about your future is critically important. Always be as positive as you possibly can be. Think about what success means to you and how you can get there.  Define your goals and be realistic in what you are trying to achieve.  Get others to join in your vision and support your efforts.

Be honest and dependable in your pursuits. The music business is a very small world, and it is likely that you will form a network of people that will help you at various times along your path. Treat them with respect and take responsibility for your actions, and you will find a lot of support when you need it.  Often times things you setup at one point in your career, will come around again and be available to cross your path.  Be sure you that the encounter will be something you expect and not an unpleasant surprise.

Make a 360 degree deal with yourself and find ways to generate revenue from your writing, performing, brand, name, activities, and interests that suit you and what you stand for.  You do not want to sell your soul to another entity that will control your career options and minimize the revenue opportunities that you will have down the road.

Build a team around yourself.  It is impossible for one person to do everything that needs to get done. In the case of an artist or writer, you need to write, create, record, and produce art.  You need someone else to promote your work and manage the business side of things. You are forming a musician business around yourself, and eventually you will need help. The team you need will depend on what stage of your career you are at.

Eventually, as you begin to take off, you will need some combination of a manager, booking agent, producer, publisher, lawyer, publicist, agent, marketing person, online specialists, technologist, and others to help you. What does your mix look like? Imagine an organizational chart in your head, with you as the CEO. Who do you need on your team?

When trying to recruit people to your team, sell your vision and art, and get them to join in with you. It is a good reality check to try recruiting people to your dream to see if it resonates with them. Learn to understand, listen to, and ultimately motivate others by communicating clearly. Build a team around you.

Here is a list of 9 trends and challenges that were recently published as part of an overall report on Digital Music by Redwood Capital.  You can download the entire report here.  What I find most bothersome about all of this is that it is a very backward looking, rationalization and justification about the collapse of the recorded music business and the fantasizing about protection of the label’s assets and proliferation of the traditional business model.  While it may be a good snapshot of some of the major issues the industry has faced and a good way for people to orient themselves, this is hardly the way to think about the future.  No wonder the investments made in music startups over the past decade or so by the VCs and Investment Bankers have not panned out.  If this is the way VCs and investors look at the world of music, I got to tell you, we are all in a lot of trouble.

I have pitched and have had many deep discussions with investors over the years about the music industry and have learned one thing that is holding the entire industry back.  Investors say they care about the music business, but when it comes right down to it, they don’t care about the musicians.  Not one of them would bet on a new label or artist driven business model.  They all wanted to back technology or distribution, but not musicians.  Pathetic.

I have taken the liberty of annotating some of these “treneds and challenges” below:

1) Rampant Piracy Continues

Despite a decade of aggressive attempts by the industry to reduce illegal downloads and peer-to-peer file sharing and preserve what remained of the old model, the biggest challenge facing the industry is still the fact that consumer attitudes towards paying for music have been forever changed, especially amongst the ever-important younger demographic. This places tremendous pressure on industry players to provide the consumer with an experience that exceeds that which can be achieved illegally and for free. The solution likely lies in packaging music with other products and services that consumers expect to pay for, such as mobile phone service, Internet connections, ringtones, concerts, merchandise, etc., and taking advantage of improvements in broadband speed and access to provide a service that can’t be replicated for free. – Certainly this is true for recorded music and something that we predicted nearly 8 years ago in our book on the Future of Music. However you cannot expect a healthy market when you have to “package” what you are trying to sell with something else as the primary means of distribution.  New forms of music experiences would certainly trump “bundles”.

2) Strategy of Major Labels

Despite numerous attempts to cut out the labels as middlemen, and the potential damage they have done to their relationships with the public after years of suing their customers, the major labels still have tremendous clout in determining the fate of the various new distribution models and emerging companies. While backing by the major labels by no means guarantees any degree of success, opposition from the labels is an obstacle that is extremely difficult to overcome. That being said, many of the larger players today began without the blessing of the labels, but once they became too big to ignore the labels were willing to make a deal. – Again I would argue this perspective assumes that the existing music, the existing catalog is more important than the new music, or the music yet to be created.  Tens of millions of dollars have been wasted and countless hours of negotiation sunk into trying to secure licenses to existing major label content by many companies trying to recreate the distribution model for an asset class in severe decline.  I will go out on a limb here and say that the new music matters far more in the future than the existing music, and that licenses from the major labels are far less valuable than the labels think they are.  Perhaps an order of magnitude less.

3) Legal Complexity

Many US copyright laws were written when the only form of music distribution was printed sheet music and as such, obtaining the proper licenses from all relevant content owners is extremely complex. Given the relative youth of the digital music industry, the law is being written and applied haphazardly and has been difficult to interpret. International differences make it difficult to offer consistent products on a global basis. For example, currently Pandora is legal in the US, but illegal in the U.K, and vice versa for Spotify. Developing a business plan in this environment is extraordinarily difficult. – Of course this is true if you are building a business based on catalog.  New labels and music companies that are forming to support new artists can completely eliminate this issue by creating licenses for their content that bundle all the rights in one global license that can be easily acquired.  By using this strategy, new content businesses can outrun old content business and begin to take over the landscape.

4) The End of DRM

The recent decisions by the labels to finally eliminate digital rights management for many applications should represent a landmark change for emerging growth companies in the music space. This greatly reduces a longstanding barrier by allowing compatibility of content and devices across platforms. By decoupling content and devices, consumers can now download a song from their choice of providers and listen to that song on their choice of devices. – Excuse me but the labels had nothing to do with the elimination of digital rights management.  That was eliminated long ago when people began trading MP3 files while all the attempts to distribute “legitimate” digital music failed. This is just the labels saying uncle.

5) Mobile Strategy is Critical

Whereas it has been extremely challenging for content owners across all digital media sectors to monetize online content, consumers do not expect mobile content to be free to the same degree because they have been conditioned to pay for such services. Therefore, we believe that online models that don’t have credible mobile strategies will continue to struggle, and killer mobile apps will prosper. We believe that one of the primary reasons for MySpace’s acquisition of Imeem was Imeem’s mobile capabilities. – Here I agree with the basic premise that a mobile strategy is critical, although have yet to see one that works.  Do people really want to listen to music on their phone?  Is that the killer app?  I expect that something far better is around the corner, more integrated into your life at the moments where you can and want to listen to music.  The damage being done to people’s hearing by the “Ear Buds” sold with the iPod and nearly every other mobile listening device is limiting the experience and holding back the growth of mobile music more than anything.  MP3 sound like crap.  Ear Buds are destroying people’s hearing.  No wonder hardly anyone wants to pay for digital music.  Anyone who focuses on improving the sound quality of mobile listening will find a explosive opportunity.

6) Dominance and Importance of the iPhone

With iTunes’ almost 70% US share in digital downloads, and the iPhone quickly taking market share in the smartphone category, alliances with Apple and/ or apps on the iPhone have become critical to success. Rhapsody, Spotify and Sirius have all launched iPhone apps in the past few months, and MOG’s is expected shortly, and this should give each an important boost in marketing their products. Without the iPhone app, customers would have had to spring for another device to use those services. With customers hesitant to even pay monthly service fees, adding a hardware requirement would have been an insurmountable obstacle in reaching a large customer base. We believe that Apple has been smart in its willingness to approve apps even from services that compete with iTunes. – I love my iPhone, I think it is the coolest thing ever invented.  But I also know that worldwide, the iPhone is just a speck on the landscape of mobile phones.  Will Apple really dominate this space over time?  I doubt it very much.  The vast majority of people cannot afford to buy Apple products.

7) Importance of Wireless Broadband

The widespread availability of broadband in the home and the office in the past decade has enabled computer-based downloading and streaming to develop entirely new methods of discovering, purchasing and listening to music. Many of the previously mentioned business models revolve around this experience. However, the next frontier for the developing models is to take the experience mobile without frustrating consumers. Now that consumers have accepted that cell phones are also music players, the market for mobile music has dramatically expanded, given that 139 million smartphones were sold worldwide in 2008 (Source: Gartner). To date, while streaming services such as Rhapsody and Pandora are a great way to listen to music at one’s desk, the experience on a mobile phone is mediocre at best, given dead spots and dropouts, and in the case of Rhapsody, low bitrate streaming. We suspect that many early adopters have tried these mobile services, only to get frustrated and go back to listening to MP3s on their iPods. Spotify’s and Slacker’s ability to cache playlists may prove to be a good workaround until wireless broadband availability and quality catches up. – I am a firm believer that you do not have to worry about storage and bandwidth, that they will always expand faster than you think they will.  Agreed.

8 ) Consumers Remain Willing to Pay for Exciting New Technologies and Products

Consumers have proven that they are indeed willing to pay for new products and technologies that enhance the music experience or provide new uses for music. The tremendous initial growth of the ringtone market is one example. US ringtone sales grew from almost zero in 2002 to a peak of $714 million in 2007, before dropping 24% in 2008 (Source: SNL Kagan) as consumers ultimately figured out how to create ringtones on their own for free. iTunes has created new value added products that sell at a premium, such as iTunes Pass, which automatically delivers all new product, including exclusive extras, from a specific band to its fans, and iTunes LP, which adds album art, videos, and other extras to an album purchase. Shazam is another good example. Shazam is the second most popular music app on the iPhone and claims 50 million users. Shazam is a unique technology that enables users to use their mobile phone to identify and tag any song they hear in public or on the radio and immediately purchase the song. The app is so popular that Shazam is now charging customers $5 for the premium app, and is limiting free users to five tags per month, and its usage is accelerating. – Completely agree.  This is in line with my basic premise that the new stuff matters far more than the old stuff, and if you can deliver a unique experience to a fan, especially one that is fun and sounds incredibly great, they will eat it up.

9) Convergence of Models

Most streaming services also offer the ability to purchase tracks either with their own ecommerce model or with links to others, most often iTunes and Amazon. To date, most ecommerce models have not offered streaming services, likely out of fear of cannibalization as well as licensing requirements. We believe that as streaming catches on with a broader audience, the e-commerce players will have to offer both. Apple is now more likely to move in this direction with its purchase of Lala, and increases our level of confidence that the streaming model is the wave of the future. – I believe as we wrote about in the Future of Music, that a utility model is the only way to make money with recorded music in the future.  Until music become always on and always available and feels like it is free to you, the market will continue to decline.  It is not so much the convergence of models but the ascendance of a model that will work.  The broadband mobile carriers are the ones that can make this happen.  It is a winner take all business strategy for the company with the balls and commitment to bake paid media distribution into their basic business model.

Comments anyone?

Success in music

Here are 10 recommendations for strategies that can lead to success in music, and in life.  Take them with a grain of salt.  With this new decade comes the promise of digital music, the power of the entrepreneur and the tools to connect with an audience and deliver the goods.

1.  Living a life in music is a privilege. Earn it.

There is very little more satisfying then spending time making music.  If you make this your life’s work, then you can be truly joyful.  However, the chances of being successful are extremely low and the only people who are going to get there are going to have to work hard and earn the right to be a musician.  Respect the privilege of being free enough to have this choice (if you do) and honor the opportunity.

2.  No one is in charge of your muse but you. Be happy and positive.

People can be their own worst enemy.  Countless times I have heard artists tell me the reasons why their career is not working out.  Most of the time they are putting blocks in their way and pointing fingers at people and things that are holding them back.  Stop whining and blaming other people and make the conscious decision that you are going to be successful and that things are going to work out in your favor.  You are creating your own reality every day, so make it a good one and excel.

3.  Practice, practice, practice – then go for it. Over prepare.

You can never be ready enough for opportunity.  Your live shows can always be better, your songs can be more amazing, and your playing can only improve.  As the CEO of your own musician business, you can learn how to run the company more effectively, reach out to more fans and be an more effective social media marketer.  Don’t hold yourself back by not being ready.  Be a professional.

4.  If you suck, you will never make it. Find a way to be great.

Lets face it, it is really hard to be amazing.  Some people have the natural talent and you can see it in the first 5 seconds of meeting them.  They are truly blessed.  The rest of us have to find our niche, our passion, our calling and then reach for it.  Ask people around you for feedback.  Find what you are good at and focus on that.  Get other people to help you.  If you don’t stand out and rise above the pack, you will struggle forever.  Be amazing.

5.  Learn how to breathe and keep your focus.  Stay calm.

There is nothing more pleasant than working with someone who knows who they are and what their goal is.  Remember the old adages of thinking before you speak, and taking a deep breath before you lay into someone.  Most of us have a lot going on in our lives and we can all benefit from staying focused on our goals and remaining calm in most situations.  Learn yoga, exercise, run, meditate, sit still, breathe, learn who you are.

6.  Don’t take yourself too seriously, no one else does. Have fun.

I am amazed at how many people spend so much time looking backwards and trying to understand what people think of them.  This is worrying about the past and not embracing the future.  Reviews are important, but don’t run to them or let them ruin your day.  Not everyone is going to like you, but more people will if you are having a good time.

7.  No matter how difficult things get, move forward. Don’t give up.

The only thing that will help your career take off is forward momentum.  That is how you are going to reach your goals.  A lot of people are stuck in their own mud.  Take action, make a move and then see what happens.  Don’t spend time procrastinating or worrying about how hard it is, just do something positive to advance your cause.  You will feel much better by acting instead of waiting or worrying.

8.  Find a way to make money. Start small and grow. Avoid being in debt.

This is probably the most important strategy of them all and why so many artists have gotten into trouble in the past by taking label advances.  All that is, is a big loan.  Get some kind of cash flow happening right away, no matter how small.  Sell merch, play for the door, license your songs, play sessions, teach, write, start your musician business.  The biggest mistake you can make is to borrow a lot of money and then spend it on things that don’t matter.

9.  Be unique and true to your vision.  Say something.

The people that we remember are the ones that are unique, exciting, special, provocative, fascinating, original, inventive, interesting.  Music is a basic form of communication.  The really successful artists have something to say and work on delivering their message.  Your chances of success go up exponentially if you have a unique position and message and create a following of fans who really listen to you because you have something important to say.

10. Work and play with people you like every day.  Collaborate Often.

Music is a tribal experience.  You cannot make great music alone.  Surround yourself with talented people, write together, play together, try new things.  Bounce inspiration off of each other and learn.  Listen to each other and let the music weave it’s way around you.  Find a producer, songwriting partner, other musicians and dive in together.  The whole is greater than the sum of its parts.

Wonderful things are waiting to happen to you.

Want more strategies for success? Download my most popular ebook, Hack the Music Business, for free here.