Tag Archive for: touring

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8 Tips for Making a Good Impression at Gigs

Making a good impression at gigs

Guest post by Jonathan Sexton | CEO Bandposters

Before I ran a company, I played hundreds if not thousands of gigs all over the US. I’ve played to 10,000 people (2 or 3 times) and I’ve played to 10 people (more than 2 or 3 times). As important as learning how to book gigs, I’ve learned 8 things NOT to do when showing up for gigs, especially to a new venue in a new town.

Everyone of these tips come from cringe worthy personal experience. Here are some great ways to make a good impression on your next show or tour.

1. Don’t Be Late for Your Gigs

Everybody is late, be different. This is the baseline of professionalism, if you show up on time, are professional and easy to work with and don’t have a huge crowd your first time out, it is more than likely you’ll get a few more shots at it. Venues and sound teams have a million better things to do than come and find you. If something happens that you can’t help (van breaks down etc.), then call as soon as you can. Then be on time next show.

2. Don’t Hangout in the Green Room All Night­

Your show and your career completely hinges on how many fans you can earn. Fans love your music and they want to know you. If you are new to the market, you need to get to know the sound guy, the bartenders, the regulars; you’re playing gigs to earn fans and build a business.
Don’t hide, get out and talk to everyone, be friendly. Relationships are the key to the music industry and this where those relationships are made. Don’t hide. Get out there with the people

3. Master Stage Volume­

If you play a show, and the crowd can’t hear the vocals, you’ve lost (this includes punk and metal). There are a million scientific reasons that the human vocal cords cannot compete with drums and amps. Some big clubs have the power to get the vocals up over anything, but most small clubs do not. In my opinion, it starts with the drums, you can play great without playing as hard as you can. Then guitars have to get over the drums, and the vocalist is generally screwed, let the PA do the work, so you don’t have too.

4. Talk to the Crowd

­You may have played your songs 1000 times, but that new person in the crowd or in a new city has no idea who you are, what your songs are called, and what your twitter handle is. Tell them, thank them for being there, introduce the band, say something funny. You have to engage the audience. It’s a show and you are earning their interest. The best bands plan when they are going to say something in the set, and what they are going to say. Not scripted, but at least a general idea.

5. But Don’t Talk too Much­

Don’t ramble on before every single song, also, my pet peeve is when people say “this is a new one” it’s like a reverse apology. 9 times outta 10­­ they are all new ones, even the old ones, because most people haven’t heard you before. I prefer to play 3 songs, then say a little something, then play 3 more. It seems to be the right mix. Find what works for you and your audience. In the end it’s a music show, engage your audience, but don’t monologue.

6. Don’t Get Wasted­

This screams amateur hour. It’s not even about acting like a fool, you also lose awareness of how you are performing. No one in the industry wants to babysit you. Have fun, but don’t fall off the stage.

7. Thank the Crowd (even if it’s just the sound guy)

The first 15 minutes after your gigs are your best opportunity to collect new emails, thank fans and sell merch, especially if you are the opening band. Once the next band starts, it’s harder to talk because it’s loud and people’s attention is elsewhere. In my band, we had a deal that we’d divide and conquer. 3 bandmates would get the gear taken care of and 2 of us would immediately hit the crowd or get to the merch booth. That way we could maximize the small window of opportunity and have contact info for the people that we would reach out to when we return.

8. Thank the Venue­

Taking 5 minutes to find the manager or head bartender after your gigs, look them in the eye, and thank them for having you can do wonders for your career. You are building relationships and it’s something that most people do not do. It’s a great way to stand out from the hundreds of other bands that play at the venue around the year. Same with being on time and professional, venues will remember it the next time that you want to play at their spot.

Bandposters lets you design, print, and ship customized posters everywhere in seconds. We make it easy, in just three simple steps. First, use our powerful design tools to create a custom poster. Next, choose your tour dates or other destinations, and we’ll print that data directly on the poster (no more magic markers!). Then we take care of the rest – we print every poster with care and ship directly to the venues or wherever else you’d like. 

Take 20% off your first Bandposters order with code “NAMPOSTERLOVE”

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Break out of Your Local Music Scene

Photo credit: http://bit.ly/1h7Jdlk

Photo credit: http://bit.ly/1h7Jdlk

Whether you’re just starting out or a superstar, there’s always a barrier stopping you from performing in new places. Maybe you can’t seem to break out of your local music scene, you want to move from regional to national tours, or maybe you’re a US artist unsure of how to make the jump to performing in Canada. Depending on your career level, your resources will differ. Musicians further along may have an agent or a tour manager to help them out. Either way, the formula is the same.

Check out this article written by Jamie Ford from Music Gateway. This is just an excerpt, but you can read the full article over on Cyber PR.

Research

Do your research: look up different cities, the popular small venues and the promoters within. Once you have this information, there is knowledge of who to contact to get a gig. It is likely that if you are from another city that you won’t be offered the best slot of the night… Be patient with this, the promoter may not have heard of you, and may be sceptical about ticket sales so they’re giving you a fair chance, and hey… if you’re good, you’ll probably be invited back with a better slot. Promoters aren’t only useful for gaining a slot at one of their venues, but they also have a good contact list of the city of which they work. If you’re impressive, there’s no doubt that the promoter will spread the word and help you branch out around the area.

Make the most of the trip

When travelling to another city to play a show, make the most of the trip and get yourself heard more than once! Perhaps arrange another show (depending on promoter terms) but there are other avenues to go down other than booking a show at another venue… Play an acoustic set in a record store, busk in the city centre with some CD’s ready to hand out, be imaginative! It may also be useful to think about taking along some merchandise, such as CD’s, badges/stickers and t-shirts etc. This will look professional and make people in the city remember you whilst also making some money!

There are other ways to get your voice heard in the city you’re heading to, again linking back to Research, find all the local radio stations and contact about a possible interview or play of your song whilst you’re in the city. This is great promotion for your act, people become aware of whom you are and may even come down to your show, pleasing the promoter too! The harder you work and the more promotion made, the more the city will want you back after your show. Engage with the audience and make them excited about your music!

Where do you really want to play? What’s stopping you from playing there? 

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3 Steps to a More Efficient Merch Table

The live show and merchandise are becoming more important in the music industry. On top of that, there has been a surge in small indie musicians trying to make it on their own. Many think that merch is out of their budget, but with the right planning and strategy merch can become a profitable revenue stream for anyone.

This article, written by Robal Johnson of PUMP Merch, was originally posted on Hypebot. To read the full article, click here. 

1. Decide what to sell

Where to begin? Start small, be patient, and analyze your early merchandise investments. Get creative. Have an artist friend design your logo: pay them in drinks and guestlist spots. Be conscious of your audience: determine what apparel and accessories are trendy. Understand the demographic: ask how they consume and share music, which can easily be done via social networking. Acknowledge your environment: if its hot, tank tops and ballcaps are essential; if it’s cold, hoodies and beanies are a must. At first, focus on selling more for less: keep designs to 1-3 colors, buy the inexpensive option, and charge fans as little as possible. Remember, you can always upgrade later.

Don’t be afraid to be aggressive. You’re not bothering anybody at the show. I guarantee most of the people there will be excited to meet you and honored you came up to talk to them. They know you’re just doing your job and they actually want to talk to you. I have approached the bar in a small town in Mississippi and sold $10 T-Shirts. I have wandered a club in Nashville asking folks if they’d like to buy $5 CDs. Merch is a souvenir purchased to commemorate a notable experience. Every music fan enjoys the pride that comes with seeing an act “back in the day” and you need to offer them something to take home that night.

2. Convenience

Once you have decided on the right products to sell on tour, your next focus should be on convenience. If you do not accept credit cards while on the road, you are leaving countless dollars on the table. Just ask Laura Keating, Melissa Garcia, and Emily White of Whitesmith Entertainment and Readymade Records: “We have been taking credit card payments in some form or another since 2005 and it always doubles our sales at the merch table.” Now THAT should motivate the hell out of all of you.

Companies like Square and PayPal Here have made it extremely simple for you to accept all major credit cards as long as you have a smartphone or tablet. If you have not already, stop reading this right now and order one of the FREE card readers from either of those companies immediately. It will take you a few short minutes and the results are literally priceless. I can not stress the importance of this enough. In this day and age, you MUST accept credit cards. You will not only sell your merch to more people, you will sell even more items.

At this time Square is only offered in the United States, Canada, and Japan. PayPal Here is available in the US, Japan, Hong Kong, and Australia. For acts touring the United Kingdom and Europe, Team Whitesmith/Readymade suggests using iZettle for your credit card processing needs. iZettle is now live in Sweden, Norway, Denmark, Finland, the UK, Germany, Spain, and Mexico.

3. Get organized!

Third on your to-do list while gearing up for tour should be organization and accounting for your merchandise while on the road. For decades this was done by either the merch guy or the tour manager in a looseleaf notebook with pencils and a whole lot of mistakes. Then came Microsoft Excel, which we ALL love to hate. But I have seen the future of tour merchandising and it comes to us via Orange County, California in an app called atVenu. These guys are changing the game and every single touring artist needs to take note.

I spoke with co-founder of atVenu, Ben Brannen, and he shared his story of what drove him and his partners to create the service. “While on the road, I experienced first hand the inefficiencies of existing methods by which we track and settle our touring merch. Too much money is lost due to inventory issues, poor nightly settlements, limited analysis, or one broken cell in an Excel sheet. atVenu solves these problems by empowering merch reps with a mobile app designed for their needs which syncs to the artist’s web-based account where merch company and management can login and easily access a robust suite of real time analytics and reports.”

This is a game-changer for many reasons, but most importantly it is something that will save artists time and money on the road. As a merch rep myself, I can attest to the great many headaches that go along with inventory, accounting, and restocking of products while a band is touring. It is all about organization and communication. With a system in place that knows when you’re getting low on the green v-necks in small and medium and your merch guy gets a notification, imagine how much money you’ll save on those rushed deliveries from halfway across the country that will hopefully make it to the venue on time. Envision how much easier it will be to do reorders for the next tour because you know exactly what you sold, when, and where.

My buddy Randy Nichols of Force Media Management, who represents The Almost and Bayside, among others, also works as Strategic Music Industry & Product Advisor with atVenu. He sums up the app perfectly, “A tool like atVenu shows me real time forecasting data for my tour so I can both improve my profit margins and be sure to maintain a healthy stock of my in demand items. This can easily mean the difference between 10 boxes of merch in the drummers garage at the end of the tour vs an extra $10,000 in profit.”

 

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Improve Your Live Show

Photo by DrabikPany

Photo by DrabikPany

The live show is a very important part of your musical career. Today, you can find plenty of fans online, but if you really want to form a relationship you need to go offline and interact. You should put the same kind of dedication into your live show that you put into your music. Use your creativity to make each show better than the last!

These tips came for the Hypebot article, “5 Tips for Improving Your Live Show,” and the Music Think Tank article, “6 Ways to get More People to Your Shows.”

1. Videotape your show and study that tape

These days it’s an incredibly mundane thing to get some footage of your live show so, if nothing else, get a look at yourself from an objective perspective just like you might check out a mirror on your way out the door.

But to really benefit from video, plan to get decent footage that includes your stage entry, stuff that happens between songs and your exit. Those are all part of your show and some acts undermine themselves by only taking the songs seriously.

Check it out with nobody around and check it out with a sharp eye at your side. It doesn’t have to be a complicated process in order to reap high returns for taking this process seriously.

2. Take every show seriously

It’s so offensive to the audience members present when a performer focuses on their disappointment at the size or responsiveness of the crowd. Do the best job you can everytime. Maybe afterwards it will still feel disappointing but, by building with those who are present and by reaffirming your commitment to your art every time you perform, you will still come out ahead.

3. Make the Event Interactive

Think of some new ways to make fans a part of the live show. Maybe you can have a “frequent fan” card where they collect stamps for each show and redeem it for a free t-shirt or unreleased material. Maybe you can invite some other artists who are fans to guest perform during your set. Or maybe you can shoot a fan-made “live video” for YouTube shot entirely with Vine videos on cell phones. Whatever it is, get creative and make fans feel like they’re an important part of the experience so they won’t want to miss out.

4. Find a Different Angle for The Show

It’s easier to get more people to show up if it’s your band’s first show, when you’re releasing a new album, it’s a tour kick off, or when it’s your final gig. Obviously, it’s because your fans realize those as special occasions and want to be there.

So rather than making every local show the same, find creative ways to make them more enticing: film a live music video, let fans write the set list, do special covers, play acoustic if you normally don’t (or vice-versa), record a free download of a live track, etc. In other words, give your fans a compelling reason to show up. Answer: Why will this show be different than any other? What makes this exact show special?

What do you do to make your live show awesome? Share in the comment section below.

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Three Revenue Streams for DIY and Indie Musicians

Today, indie and DIY artists have the potential to bring in more money than ever before, but sometimes all the potential revenue sources can be overwhelming and difficult to manage.  This article describes the three most profitable revenue sources for indie musicians.

1) YouTube

Complain all you want about musicians making YouTube covers and goofy videos instead of being “serious”. The reality is many of them make a good living from this. Costs are minimal compared to professional studio time. Distribution costs are near zero. The casualness of the content also allows for more rapid creation than one might find for “official” recorded work.

Companies such as Maker Studios and Big Fra.me have grown to help these artists monetize their music with better-leveraged ad rates, production assistance, and channel cross-promotion. Once ramped up with a lot of content, successful artists in this area can clear mid-to-high five figures in revenue. Since they are often solo artists, they also don’t have to split it up much.

To find out the other two revenue streams, visit Music Think Tank.

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Marketing Strategies – ADISQ Presentation

Last week, Dave Kusek did a keynote presentation at the ADISQ conference in Montreal, Canada. He spoke about current effective marketing strategies for musicians and artists in the digital age. Business models for success. Here’s the presentation.

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Ridin’ with Hypebot

My buddy Bruce Houghton at Hypebot, caught me last week for a quick interview before Rethink Music.  Here is an except from our discussion:

HYPEBOT: Your new focus is on consulting and investing. Are there any sectors, particularly within music and music tech, that particularly interest you or where you see the most room for growth?

DAVE KUSEK: Online education is one of them. This is an area that is already transforming how people learn and gain job skills and it is only going to grow as time goes on. There are big opportunities here that will effect tens of millions of people around the world. Online training is going to be huge. Job requirements are shifting and people need to be able to adapt to changing circumstances that can benefit them. The traditional model of higher education is already under pressure and there are many people and companies exploring alternative models that are very interesting.

The other area I am bullish on is live music and live events. The live concert experience cannot be digitized, yet can benefit enormously from technology. There really has not been much innovation in live music or in music merchandising beyond ticketing. I think there is a lot more that can be done with mobile technology and am actively working in this area. My investment in Tastemate is one way of digging into this potential in a meaningful way. We will be bringing our service to a venue near you, very soon.

I also think that there is potential to expand the reach of live performance using remote technologies. I am interested in ways to cut the costs out of touring to make it more profitable and to reach broader audiences. It is amazing to me that there has not been more activity in this area either, so I am looking for companies and people to work with that are thinking differently about what live music is all about and how to make it even more lucrative.

HYPEBOT: What are some of the things that Digital Cowboys has done in the past or is looking to do now?

DAVE KUSEK: We are focused on business development, marketing and product development, particularly in online and mobile services. We also do strategy consulting for businesses wanting to expand or enter new markets or make acquisitions. I say we, because while I am the managing partner, I also leverage a network of people around the world and with different specialties that I bring together to form a team to address the issues. For example, with a lot of the product work that we have done I brought together a team of visual designers and user experience people to execute on the product vision and do the testing. With business development projects I sometimes work with friends that have particular contacts or relationships that are beneficial to my clients. Sometimes I put together a couple different investors or strategic partners to provide capital or distribution or some other need. The main thing is to get the work done and show results, while trying to have some fun and work on interesting projects that are pushing the envelope.

HYPEBOT: There’s some talk of another tech bubble. Do you see think we’re approaching one in music and media technology?

DAVE KUSEK: I do think that some of the deals we have seen recently are off the charts, like Instagram – but who knows? That has all the earmarks of “bubble” written all over it. But Facebook is also about to go public and at their level, what’s another billion dollars?

But really I don’t think overall that we are at the point of frivolousness and excess that we witnessed in the earlier dot-com bubble, at least not yet. I believe that people are just beginning to figure out better ways to communicate and interact and learn via technology. That is having massive implications on the future of society around the world. Take a look at the stock market trend over the past 100 years and you will see that things tend to move up and people get smarter and more prosperous. I am an optimist.

There are a lot of music startups getting funded these days and certainly they are not all going to make it. I think we will see some consolidation in the DIY space as there are probably more companies addressing that market than the market really needs. The same is true for music streaming and distribution and music discovery. I think the real breakthrough companies will be formed by trying to do something completely different, rather than mimicking the past with technology. We’ll see.

HYPEBOT: Any plans to write a follow-up to the “Future Of Music” book?

DAVE KUSEK: I plan to spend a lot more time posting things to my blog and on digitalcowboys.com. This is a much better way to continue to update original thinking and way more efficient than writing another book. The music industry has gone digital and online outlets like Hypebot really do work as conduits in this business. That is a real bright spot in the transformation of the music industry. So, look for more at futureofmusicbook.com.

You can get the entire interview here.

More coverage from Hypebot here and from Billboard here.

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Artist Revenue Streams Research Project

Artist Revenue Stream Poster

My friends at the Future of Music Coalition are conducting an online survey from Sept 6 – Oct 28th to determine the variety, depth and complexity of the ways that musicians are making money these days.  Not theoretically, but actually.  We are looking for performers, songwriters, composers, band members, session players, producers, MCs and anyone else making music to join in and take the survey.

A while ago, I posted this from my friend and Berkleemusic student David Sherbow showing a pretty comprehensive list of the different ways that musicians can make money.  This might give you food for thought on taking the survey and planning your career…

The artist music business model has been in flux for years. The record deal dream that most artists sought is no longer the viable alternative that it once was.  The leveling of the music distribution playing field by the Internet is virtually complete.  Terrestrial radio is on a path towards destruction that even the major labels can’t compete with.  People now access and download music from multiple sources, usually for free.  D.I. Y solutions are everywhere, but for many artists hard to integrate into their daily lives.

Where does this leave the average independent artist? At the beginning. Every artist wants to know how they can make music, make money and survive to write and play another day. Here, in no particular order, is a list of possible income streams.

• Publishing
• Mechanical royalties
• Performance Royalties from ASCAP and BMI
• Digital Performance Royalties from Sound Exchange
• Synch rights TV, Commercials, Movies, Video Games
• Digital sales – Individual or by combination
• Music (studio & live) Album – Physical & Digital, Single – Digital, • Ringtone, Ringback, Podcasts
• Instant Post Gig Live Recording via download, mobile streaming or flash drives
• Video – Live, concept, personal,  – Physical & Digital
• Video and Internet Games featuring or about the artist
• Photographs
• Graphics and art work, screen savers, wall paper
• Lyrics
• Sheet music
• Compilations
• Merchandise – Clothes, USB packs, Posters, other things
• Live Performances
• Live Show – Gig
• Live Show – After Party
• Meet and Greet
• Personal Appearance
• Studio Session Work
• Sponsorships, and endorsements
• Advertising
• Artist newsletter emails
• Artist marketing and promotion materials
• Blog/Website
• Videos
• Music Player
• Fan Clubs
• YouTube Subscription channel for more popular artists
• Artist programmed internet radio station or specialty playlist.
• Financial Contributions of Support – Tip Jar or direct donations, Sellaband or Kickstarter
• Patronage Model – Artist Fan Exclusives – e.g. paying to sing on a song in studio or have artist write a song for you
• Mobile Apps
• Artist Specific Revenue Stream –  unique streams customized to the specific artist, e.g Amanda Palmer
• Music Teaching – Lessons and Workshops
• Music Employment – orchestras, etc, choir directors, ministers of music, etc.
• Music Production – Studio and Live
• Any job available to survive and keep making music
• Getting Help From Other Artists and Helping Them –  Whatever goes around come around. – e.g. gig swapping, songwriting, marketing and promotion

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Words of Wisdom from Roger McNamee

My friend Roger McNamee, a founding Partner and Managing Director of Elevation Partners has been getting some great press lately on his thoughts on the new music business, investing in technology, Apple, Google, Facebook and much more.  Here is the transcript of a speech he gave at NARM earlier this summer, a must read.

“Our band – Moonalice – is inventing new opportunities in music. We would like you all to join us.

I have been a working musician for more than 30 years, and a technology investor for 29 years. I have played about 1000 concerts over the past 15 years, which means I have personally experienced everything in Spinal Tap except the exploding drummers. I also spent three years helping the Grateful Dead with technology and many more advising other bands, most notably U2.

My band is called Moonalice. We play 100 shows a year in clubs and small theaters, mostly on the coasts. Moonalice was the first band broken on social networks. What broke us was 845,000 downloads – and counting – of the single “It’s 4:20 Somewhere.” We’re the band that Mooncasts every show live, via satellite to thousands of fans on iPads, cell phones, and computers. We’re the band that has a unique psychedelic poster for every show. After four years, Moonalice has 371 poster images from the likes of Stanley Mouse, Wes Wilson, and David Singer. Licensing those images will eventually a big business for us. We’re the band that offers the EP of the Month for $5. And we’re the band that uses the latest technology to radically improve both the production cost and commercial value of the content we produce. Now I’m looking for people who want get on this bandwagon with me.

The first question I hope you ask is “Why now?” The world of technology is beginning a period of disruptive change. The old guard – represented in this case by Microsoft Windows and Google search – is under assault and hundreds of billions of dollars may become available for new and better ideas. I hope that gets your attention!!!

The biggest beneficiaries of this disruption should be the people who got the short end of Google’s business model, especially creators of differentiated content. For the past twelve years the technology of the internet has been static. Every tool commoditized content by eliminating differentiation. The most successful companies monetized content created by others. Google was king.

I believe Microsoft and Google are about to get a taste of what the music industry has been dealing with for a decade. Their world is going to change and they won’t be able to stop it. Not so long ago Microsoft’s Windows monopoly gave it control of 96% of internet connected devices. Thanks to smartphones and tables – especially the iPhone and iPad — Windows’ share of internet connected devices has fallen below 50% … and it will fall much further in the years ahead.

Consumers are abandoning Windows as fast as they can. I expect businesses to follow suit.

This is a HUGE deal. Businesses whose employees use smart phones and iPads instead of PCs will save up to $1000 per employee per year in support costs.If corporations buy fewer PCs, they will save tens, if not hundreds of billions per year.

This is happening because today’s strategic applications – email, Facebook, Twitter, LinkedIn, YouTube and other internet applications – don’t need a PC . . . in fact, they are far more useful on a phone.

Microsoft has been in trouble since it first missed the web in 1994. Then it was unable to prevent Google from taking charge in 1998. When Google showed up, the World Wide Web was a wild environment. No one was in charge. The prevailing philosophy was “open source” . . . and free software.

Google had a plan for organizing the web’s information that treated every piece of information as if all were equally valuable. To create order, Google ranked every page based on how many people linked to it.

What we all missed at the time is that by treating every piece of information the same, Google enforced a standard that permitted no differentiation. Every word on every Google page is in the same typeface. No brand images appear other than Google’s. This action essentially neutered the production values of every high end content creator. The Long Tail took off and the music industry got its ass kicked.

Google captured about 80% of the index search business, which gave it a huge percentage of total web advertising. Google’s success eventually filled the web with crap, so consumers began using other products to search: Wikipedia for facts, Facebook for matters of taste, time or money, Twitter for news, Yelp for restaurants, Realtor.com for places to live, LinkedIn for jobs. Over the past three years, these alternatives have gone from 10% of search volume to about half.

As if all this competition wasn’t bad enough for Google, then along came Apple with the iPhone and App Store. Apple offers a fundamentally different vision of the internet than Google. Google is about the long tail, open source, and free, but also had to remove 64 apps from the Android app store for stealing confidential information. Apple is about trusted brands, authority, security, copyright and the like. In Apple’s world, the web is just another app; it is called Safari.

People who have iPhones and iPads do far fewer Google searches than people on PCs. The reason is that Apple has branded, trustworthy apps for everything. If they want news, Apple customers use apps from the New York Times or Wall Street Journal. If they want to know which camera to buy, they ask friends on Facebook. If they want to go to dinner, they use the Yelp app. These searches have economic value and its not going to Google, even on Android.

When Apple and the app model win, Google’s search business loses. Like Microsoft, Google has plenty of business opportunities, but the era of Google controlling all content is over. Consumers compared Google’s open source web to Apple’s app model and they overwhelmingly prefer Apple’s model. Software development and innovation has shifted from “web first” to “iPad first” . . . which is a monster long term advantage. Get this: Apple may sell nearly 100 million internet connected devices this year!

Apple’s strength can be seen best in the iPhone vs. Android competition. There are many Android vendors. Together they sell more phones than Apple does. But Apple gets around $750 wholesale for an iPhone. The other guys get between $300 and $450. This means Apple’s gross margin on the iPhone is nearly as big as its competitors’ gross revenues. Game over.

The other thing that makes Apple amazing is the iPad. No electronic product in history – not even the DVD player – can match the adoption rate of the iPad. Apple may sell another 30 million this year. At this point, the competing products have not put a dent in the iPad. Image what happens if Apple’s share of the tablet market remains closer to the iPod (at 80%) than to the iPhone (20%)?

This sounds like, “Game Over, Apple wins” . . . but it’s not . . . at least, not yet. The open source World Wide Web has finally responded to Apple. A new programming language has come to market called HTML 5. HTML is the foundation of the World Wide Web. For the past decade, HTML has been static, which allowed Google to dominate.

HTML 5 is a new generation of HTML and it changes the game fundamentally. It allows web developers replicate the iPhone experience, but with many extra bells and whistles … and no App Store. One reason HTML 5 matters is because it eliminates Adobe Flash, which has been an inadvertent barrier to creativity

Creativity enables differentiation. Differentiation can be monetized. Huge differentiation can be monetized hugely. With HTML 5, creative people can now use the entire web page as a single canvas. For the first time in a dozen years, web pages will be limited only by the creativity of the people making them. They can create experiences that will be more engaging to consumers and more profitable for advertisers than network television.

New forms of entertainment will emerge. New forms of business. Companies the size of Facebook and Google will develop in categories I can’t guess at. Companies as important as Amazon, iTunes, and Netflix will emerge to support what new content comes to market.

Whether you view Apple as friend or foe, HTML 5 offers real opportunity. Why?

Because you can deliver a better experience than an app . . . without an app. HTML 5 is cheaper to build, cheaper to support, no 30% fee . . . oh, and the apps perform better, too.

I believe Apple’s best response would be to focus on selling hardware and accept that consumers will demand products that happen to bypass the app store. Based on the argument with Amazon, I sense Apple is not ready to concede the point. That’s ironic, because the only way Apple can get hurt would be if they try to force all commerce through the App Store. The would create a real reason for customers to buy a tablet other than iPad.

Let me review my key points so far:

Google and Microsoft will remain huge, but their influence is evaporating, which means we can ignore them

Apple is winning big, which means we have to support their platforms first

For people who make content, Apple is a better monopolist to deal with than Google.

HTML 5 will give you a better product than the Apple app model at a lower cost and with more value.

Now let’s figure out what we can do together. My band Moonalice exists because T Bone Burnett wanted to produce an album of new and original hippie music in the old school San Francisco style. We put together an all-star band with in late 2006 and recorded the album. T Bone was about to win the GRAMMY for the Alison Krauss/Robert Plant album, Raising Sand, so we thought we were made.

We had a budget
We had an A-list PR guy
We had a really fine manager
We had custom label deal with a nice budget
T Bone’s innovative sound technology would make the album cutting edge

Old school music is good. Old school marketing wasn’t going to work for us. About four months before release, I reviewed the media plan with our PR guy. He said, “Sorry, man, but nobody cares.”

A few moments of somber reflection followed. Then, with great regret, I let our manager go. I let our publicist go. I let our label go. For all intents and purposes, we wrote off an album everyone was extremely proud of and which accounted for half of T. Bone’s portfolio the following year when he was nominated for Producer of the Year.

But I freed up most of our operating budget. Real money. And I focused it all on Twitter and Facebook. Our goal was to build an audience of dedicated fans around a Moonalice lifestyle. Three years later, we have 57,000 fans on Facebook and 75,000 on Twitter. We learned a great truth: as hard as it is to get people to spend money, it is much harder to persuade them to spend enough time listening to you to become a long term fan. We traded our music for their time. We discovered we could build an audience by giving away stuff that costs nothing to produce and distribute. These are serious fans who engage with us dozens and often hundreds of times a year.

The first thing we invented was the Twittercast. Before us, no one had ever done a concert over Twitter. Now we have done 103. Our marginal cost is exactly zero. Next we created Moonalice Radio, which has broadcast one song every hour on Twitter for the past two years. Then our drum tech bought a video camera and started recording the shows. Then he bought more cameras, put them on mic stands and started doing live video mixes. About a year ago, he figured out how to mooncast our concerts over the net for free.

Nearly all of our past 100 shows have been mooncast live on MoonaliceTV and then archived. Because we play mostly late shows on the west coast, only 10% of the audience watches in real time. But approximately 3,000 people watch EVERY show on a time shifted basis. Fans like the Moonalice Couch tour because they can chat, make friends, and do things that are not permitted at a live venue. They even buy Couch Tour tee shirts. And they are helping us create a new ecosystem where most of the music is free, because Moonalice art and life style products have huge economic value.

Thanks to HTML 5 and a satellite dish, Mooncasts can now be viewed on a smart phone without an app. Our video quality competes favorably with the best you have seen on an iPhone, and the technology to do all this costs the equivalent of six months of our former manager. He was a really good guy, but a satellite-based tv network is more valuable.

I want to finish up by recommending a course of action for you

Step 1: Remember that HTML 5 is just getting started, but the learning curve is less expensive and more profitable for those who commit to it from the beginning. The new business is going to emerge over a few years, not overnight

Step 2: Don’t wait for the labels to figure this out. Labels are not organized to get this right, which leaves a big hole in the new music market where labels used to be.

Step 3: Don’t wait for major artists to figure it out. The great new stuff is going to come from artists who have nothing to lose. Artists who come out of nowhere will create huge value for next to no cost.

Step 4: Make sure you are successful addressing the needs of next generation content creators … not just listeners. There are WAY more of content creators than you may realize. Thanks to Moore’s Law, Karl Marx is right at last: the means of production are in the hands of the proletariat. At the peak, there were 8 million bands registered on Myspace. They weren’t playing gigs, they were creating stuff, mostly for their own entertainment. Those people spent a lot more money creating the content they posted on Myspace than they did on recorded music. Thanks to Apple’s Garageband, the population of people capable of mixing something is now measured in tens of millions. Making these people successful is the key to creating new markets and new music products.

Step 5: Do everything in your power to encourage new product ideas and new forms of content. HTML 5 is a blank canvas and there is no telling what people will do with it. For all I know, HTML 5 may produce five or even ten amazing categories of product.

Contests, prizes and publicity will give you an opportunity to associate yourself with whoever creates the cool new stuff. If you have local stores, do local events. Think Alan Freed.

Step 6: Near term, focus your platform strategy on Apple.

Step 7: Long term, focus on HTML 5. The sooner you commit to HTML 5, the more likely you will produce something of economic value.

Step 8: Remember that HTML 5 will produce companies as important as Amazon, iTunes, and Netflix. It costs musicians practically nothing to create good digital video and fantastic audio, but they need distribution systems optimized for their content.

Step 9: Make music fun again”

—

And if that isn’t enough, Roger was kind enough to share with me his thoughts on investing in technology related businesses.  TechInvestingHypotheses

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How Will Musicians Earn Money in the Future?

Here is an excerpt from a great piece from Wyndham Wallace of The Quietus on how the music industry is killing music and blaming the fans. This rather dark opinion is spot on in so many ways and raises some very difficult questions about the future of the music business that most people do not want to talk about.

“All the time the industry talks of money: money it’s lost, money it’s owed. It rarely talks about the effects upon artists, and even less about how music itself might suffer. But no one cares about the suits and their bank accounts except shareholders and bankers. People care about their own money, and the industry not only wanted too much of it but also failed to take care of those who had earned it for them: the musicians. And it’s the latter that people care about. Because People Still Want Good Music.”

“In March this year, for instance, the RIAA – the Recording Industry Association of America – and a group of thirteen record labels went to court in New York in pursuit of a case filed against Limewire in 2006 for copyright infringement. The money owed to them – the labels involved included Sony, Warner Brothers and BMG Music – could be, they argued, as much as $75 trillion. With the world’s GDP in 2011 expected to be around $65 trillion – $10 trillion less – this absurd figure was, quite rightly, laughed out of court by the judge. The RIAA finally announced in mid May that an out of court settlement for the considerably lower sum of $105 million had been agreed with Limewire’s founder.”

What is questionable about all of this is exactly how much of the settlement of $105 million will flow to the musicians, songwriters and producers whose work was the subject of the infringement to begin with. In previous settlements including Napster ($270 million), Bolt ($30 million), Kazaa ($130 million) and MP3.com ($100 million) it is unclear how much, if any, of the money received by the labels ever reached the pockets of the artists. I have yet to see an accounting of this and many managers I have spoken with have simply laughed when I asked the question if they ever received any payment from these settlements. I suppose that proceeds from litigation may be considered recoupable costs.

“But if the industry wants to talk money, let’s talk money, albeit the ways that developing musicians are encouraged to make up the loss of sales income in order to ply their trade. Someone’s got to bring this up, because it’s not a pretty picture. Consider, first, direct-to-fan marketing and social networking, said to involve fans so that they’re more inclined to attend shows, invest in ‘product’, and help market it. In practise this is a time-consuming affair that reaps rewards for only the few. Even the simple act of posting updates on Facebook, tweeting and whatever else is hip this week requires time, effort and imagination, and while any sales margins subsequently provoked might initially seem higher, the ratio of exertion to remuneration remains low for most. It’s also an illusion that such sales cut out the middlemen, thereby increasing income, except at the very lowest rung of the ladder: the moment that sales start to pick up, middlemen start to encroach upon the artist’s territory, if in new disguises. People are needed to provide the structure through which such activities can function, and few will work for free – and nor should they – even though musicians are now expected to.”

“Still, if an act can find time to do these things, or has the necessary capital to allow others to take care of them on their behalf, then they can hit the road. Touring’s where the money is, the mantra goes, and that’s the best way to sell merchandise too. But this is a similarly hollow promise. For starters, the sheer volume of artists now touring has saturated the market. Ticket prices have gone through the roof for established acts, while those starting out are competing for shows, splitting audiences spoilt for choice, driving down fees paid by promoters nervous about attendance figures. There’s also a finite amount of money that can be spent by most music fans, so if they’re coughing up huge wads of cash for stadium acts then that’s less money available to spend on developing artists. And for every extra show that a reputable artist takes on in order to make up his losses, that’s one show less that a new name might have won.”

“Touring is also expensive. That’s why record labels offered new artists financial backing, albeit in the form of a glorified loan known as ‘tour support’. Transport needs to be paid for, as do fuel, accommodation, food, equipment, tour managers and sound engineers. These costs can mount up very fast, and if each night you’re being paid a small guarantee, or in fact only a cut of the door, then losses incurred can be vast, rarely compensated for by merchandising sales. Again, financial backing of some sort is vital, but these days labels are struggling to provide it. In the past, income from record sales could be offset against these debts, but with that increasingly impossible, new artists will soon find it very hard to tour. Everyone’s a loser, baby.”

From Beck’s ‘Loser’

Forces of evil in a bozo nightmare
Banned all the music with a phony gas chamber
‘Cause one’s got a weasel and the other’s got a flag
One’s got on the pole shove the other in a bag
With the rerun shows and the cocaine nose job
The daytime crap of a folksinger slob
He hung himself with a guitar string

Soy un perdidor
I’m a loser baby, so why don’t you kill me?
(Know what I’m sayin?)

“Whether the industry likes it or not, music is now like water: it streams into homes, it pours forth in cafés, it trickles past in the street as it leaks from shops and restaurants. Unlike water, music isn’t a basic human right, but the public is now accustomed to its almost universal presence and accessibility. Yet the public is asked to pay for every track consumed, while the use of water tends to be charged at a fixed rate rather than drop by drop: exactly how much is consumed is less important than the fact that customers contribute to its provision. Telling people that profit margins are at stake doesn’t speak to the average music fan, but explaining how the quality of the music they enjoy is going to deteriorate, just as water would become muddy and undrinkable if no one invested in it, might encourage them to participate in the funding of its future. So since downloading music is now as easy as turning on a tap, charging for it in a similar fashion seems like a realistic, wide-reaching solution. And just as some people choose to invest in high-end water products, insisting on fancy packaging, better quality product and an enhanced experience, so some will continue to purchase a more enduring musical package. Others will settle for mp3s just as they settle for tap water. Calculating how rights holders should be accurately paid for such use of music is obviously complicated but far from impossible, and current accounting methods – which anyone who has been involved with record labels can tell you aren’t exactly failsafe – are clearly failing to bring in the cash.”

“The problem is, it’s not really the industry that is being cheated. It’s the artists and their fans. People get what they pay for, but – whatever the industry claims – most fans know that. They just don’t want to hear the businessmen fiddle while the musicians are being burnt. Revenues are unlikely ever again to reach the levels of the business’ formerly lucrative glory days, but in its stubborn refusal to recognise that both the playing field and the rules themselves have been irreversibly redefined without their permission, the industry is holding out for something that is no longer viable. Lower income is better than no income, and the industry has surely watched the money dwindling for long enough. Musicians, meanwhile, are being asked to make more and more compromises as they’re forced to put money ahead of their art on a previously unprecedented scale.”

Read the whole ugly story here at The Quietus.

The comments alone tell the sad story of the state of affairs in the music industry today.

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Insight in music business & management

The music industry is being reinvented before our very eyes. Learn how it is developing from today’s entrepreneurs including Ian Rogers from TopSpin, Steve Schnur from EA, and Derek Sivers and how you can capitalize on the changing opportunities.

MPN is my latest project and an online service for music business people and music and artist managers creating the future of the industry. MPN provides online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of specially selected resources designed to help you achieve success in this ever changing industry. MPN gives you the tools, expertise and guidance to help you get organized and take your music career to the next level. Learn from industry experts, set your goals and realize your vision.


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