Wednesday, July 30, 2008

MySpace COO Explains Massive Music Marketing Expansion Plans

NewsCorp's MySpace, which was recently eclipsed by Facebook as the world's largest social network, is massively expanding its music services. In this video interview, MySpace Chief Operating Officer Amit Kapur details the new move that will make the social site more attractive to bands, fans and music-marketing companies.

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Alan Jackson’s sales top 50 million

On Music Row: Alan Jackson’s sales top 50 million

Alan Jackson has crossed the 50-million album sales milestone. Alan Jackson has crossed the 50-million album sales milestone. Since his 1990 debut, the country superstar has released 16 gold, platinum and multi-platinum albums. When his latest project, Good Time, came out in March, it was the fourth album of his career to debut simultaneously at No. 1 on Soundscan’s Top Country Albums and all-genre Top 200 sales charts.

Contributing to his stellar sales record have been numerous hit songs, a majority of which the Newnan, Ga. native wrote himself. As the first artist signed to fledgling Arista Nashville in 1989, his streak of chart-toppers started with his first project, Here in the Real World, which produced four No. 1 singles. The title track to his most recent album became his 33rd No. 1 hit.

Joe Galante, chairman of Jackson’s label group Sony BMG Nashville, said, “It’s a short drive from Georgia to Tennessee, but it’s a long way to 50 million albums sold! Alan’s songs and shows have propelled him to this incredible level of success. He has never lost touch with the fans, and they’ve shown their appreciation year after year with No. 1 singles and Platinum sales.”

Monday, July 21, 2008

Mobile Music: Marketing vs. Retail

"I heard it through the grapevine…" or maybe on my mobile phone.

The music industry is learning a hard lesson: The mobile platform works better as a marketing and customer relationship tool than it does as a retail sales channel.

"Bands and artists are increasingly using mobile to form direct relationships with their fans that are then monetized through other means, such as tickets to live shows, merchandise and fan clubs," says John du Pre Gauntt, senior analyst at eMarketer and author of the new report, Mobile Music: Ads to the Rescue. "In addition, given consumers' reluctance to pay for music on their phones, marketers are finding new opportunities to partner directly with carriers, labels and even music artists themselves."

It's not that there won't be mobile music sales, they just won't be as large as many in the industry hoped for.

eMarketer forecasts worldwide mobile music retail revenues will grow from $2.4 billion in 2007 to over $13 billion by 2012.

To replace the drop in CD sales, alternate revenue streams must be developed.

"Marketers will account for a greater proportion of that overall spending as the ad-supported model for mobile music gathers steam," says Mr. Gauntt.

eMarketer expects marketers will spend over $1.5 billion in 2012 to subsidize or sponsor mobile music to targeted customer demographics, up from $42 million in 2007.

ILike launches music concert promotion ads, targeting social network users

ILike, the music fan site that has gained millions of new users through applications on Facebook and other social networks, is releasing a new form of ads that enable concert promoters to reach fans based on location and musical tastes.

The Seattle company has already offered ways for bands to display concert dates within its applications, but these ads (sample above) are more advanced. They appear in banner-ad positions on Facebook “canvas” pages for third party applications, and include features to help spread the word about the concert. There’s a link that a user can click on to tell friends about the event, or find other local fans of the performing band who plan to attend. Users can also click on the link to buy tickets.

An advertiser can set the time frame in which they want the ads to run, similar to Google’s AdWords, and get data about the total number of people who saw the ad, how many people interacted with it, and how many people clicked on the link to buy tickets. Advertisers are charged based on the number of impressions the ads receive.

This is the latest act by iLike to connect the music business with fans, and make money for everybody — except for traditional media competitors. Concert promoting has historically relied on finding fans through methods like printed fliers, email lists and radio ads, so this is a new way for any promoter to reach social network users — typically teens or 20-somethings who might not otherwise hear about a concert.

Through a partnership with Rhapsody, iLike has also recently started letting users listen to the full recordings of songs within its applications. Previously, users could only listen to 30-second clips. After you’ve heard 25 songs, you get asked to sign up for Rhapsody, or get reverted to the truncated clips. Rhapsody covers the royalties due record labels for the service. The songs include affiliate links to iTunes and Amazon, so iLike and Rhapsody can earn revenue from any referrals. These streaming tracks are already available on and will shortly be introduced to its applications.

The new ads also include songs that Rhapsody doesn’t have, such as those uploaded to iLike by an unsigned indie band that has fans on iLike’s applications. The company is separately introducing ways for other developers to integrate songs from its service into their own applications, although this feature is not live yet.

ILike has a total of 30 million registered users, up to 20 million of which are active every month, the company says. Users of its Facebook applications make up around 40 percent of its total users — iLike was one of the companies that managed to grow big, fast through its Facebook applications, when the Facebook application developer platform launched a year ago. The company has more recently launched applications on rival social networks hi5, Bebo and Orkut. The company’s applications on those sites are also seeing big growth, iLike cofounder Ali Partovi tells me; he says the company hasn’t focused on MySpace and its new platform, however, because MySpace has its own music service, and rivals like imeem and Project Playlist have had simple, popular music-sharing widgets on the site for years.

While it doesn’t rule out focusing on MySpace in the future, the company doesn’t seem to need to do so. It has already been proving itself to the music industry, recently streaming entire new albums for bands like R.E.M. and Lady Antebellum, helping those bands to sell more albums and fill more concert seats.

iLike Hits 30M Users, Adds Major Features

Ilike_2 Concert Promoter Ad Platform,
Full Song Streams, Artist Royalties & More

Social music discovery service iLike has hit 30 million registered users and announced new features that include a new ad platform for concert promoters, limited full-length song playback and artist royalty payments via Rhapsody, and an initiative to enable music syndication via third-party developers.

AD PLATFORM: Promoters, clubs, agents and bands can now use iLike’s social, self-serve advertising tools to reach music fans across the top social networks. It enables advertisers to:

  • Target fans based on location and musical tastes rather than key words;
  • Quickly create multi-media ads, including music playback and social links
  • Manage campaigns in multiple markets via auto-generated ads with self-populating concert data
  • Tap into potential “viral spread” of concert info via built-in social hooks that encourage fans to invite friends to concerts.
  • Info @ to

FULL SONG STREAMS: Free full song streaming is now available up to...

25 plays monthly. Then users can sign up for a Rhapsody account or song samples are reduced to 30 second song samples. This feature will soon be extended to iLike's hugely popular Facebook application.

ARTIST ROYALTIES: Royalties will be paid for full song streams via Rhapsody's existing agreements. This differs from the more nebulous share of ad revenue payment offered by imeem and

DEVELOPERS: The new initiative which will launch later this quarter will allow developers to add song playback (songs and playlists) to their websites or Facebook applications.

iLike has built and launched dominant music applications on four of the top 10 social websites: Facebook, Orkut, hi5, and Bebo. With this initiative, iLike features will be available to any developer for use on other website thus expanding iLike’s footprint. iLike is now accepting early registration for developers at

Inside Sonicbids: EPKs & Opportunities

From hypebot

Sonicbids_logoSonicbids is that rare Music 2.0 business that is not only more than 5 years old, but one that people are actually willing to pay for. At a time when everyone expects free, 150,000 musicians pay $5.95 a month or $50 to $100 a year to create a electronic press kit (EPK) on Sonicbids and use it to get gigs on their own or via the site's expansive list of opportunities.

Panos_panay_founder_of_sonicbids__2 But with all success comes criticism, and a few indie artists have been vocal critics of what they see as Sonicbids' pay to play offers. While maintaining a belief that paying a small fee to submit to, for example, play at Milwaukee Summerfest is a "filter", Soncbids CEO Panos Panay is working to make the process more transparent and the "opportunities" stronger.

"In the beginning, we did not do as good a job as we should have weeding out the gigs and other opportunities that did not present real value to the artist," admits Panay."...

"After an ongoing series of advisory panel meetings around the country and in Canada, we're changing that." Some of Sonicbids' offerings like showcasing at SXSW, CMJ or the NACA college booking conventions and submitting a song to international songwriting competitions always carried a price tag. Sonicbids simply streamlined the process by taking it electronic. Other Sonicbids opportunities were simply off limits for artists without insider contacts.

"We're very proud to provide the opportunity for an unknown artist to get their songs played during MTV's Video Music Awards or the $20,000 we spent so a few bands could tour China," says Panay. "Last year we spent $500,000 on gig sponsorships and Sonicbids members booked 60,000 gigs."

Beyond providing more "aspirational" gigs, the site will also offer some free sponsor supported opportunities later this year, and all offerings will come with more transparency. "The talent buyers providing the gigs are becoming more visible members of our community," says Panay, and each submission will soon come with a money back guarantee. "If you submit, you deserve a response," he states. "If you don’t get a response or your EPK is not reviewed, then you can get a site credit.”

"Our real product is not just the EPK, but rather our network and the opportunities we present for musicians to connect with gigs and people they could not reach on their own," concludes Panay.

Tuesday, July 15, 2008

Widget Enables Radiohead Style Distro

Noisetrade_2 At first glance NoiseTrade is a simple widget that enables Radiohead style pay what you want music distribution. But as two dozen indie acts including Sixpence None The Richer and Sandra McCracken learned, it also can be a powerful viral promo tool which in the two weeks since launched has delivered 20,000 full albums for purchase and fan promotion

Artists distribute their music via NoiseTrade's embeddable widget where fans can sample then either choose to tell three friends about it or pay any amount in exchange for an album download. Name plus an email and zip code are captured along the way. Fans can also embed the widget into their own blog or social networking profile.

Saturday, July 12, 2008

It’s American Brandstand: Marketers Underwrite Performers

The hip-hop and R&B producer Jermaine Dupri has discovered best-selling acts like Kris Kross and Da Brat, has produced hits for Mariah Carey and Jay-Z, and now runs the urban music division of the Island Def Jam Music Group. He’s also looking for fresh talent for a new label financed by a company new to the music industry.

The new player? Procter & Gamble.

The consumer goods giant is part of a wave of companies getting into the music business to promote their own products, essentially becoming record labels themselves.

Procter & Gamble, for example, is joining Island Def Jam in a joint venture called Tag Records, a label that will sign and release albums by new hip-hop acts. It is named after a brand of body spray that P.& G. acquired when it bought Gillette.

And Mr. Dupri, a music-industry veteran and the longtime partner of the singer Janet Jackson, sounds quite pleased with his new gig.

“I’ve never seen someone wanting to devote this much money to breaking new artists,” said Mr. Dupri, who will serve as president of Tag Records while keeping his position at Island Def Jam. “Nobody in the music business has the marketing budget that I have.”

At a time when online file-sharing is rampant, record stores are closing and consumers are buying singles instead of albums, getting into the music business might seem like running into a burning building. But as record labels struggle to adjust to a harsh new digital reality, other companies are stepping up their involvement in music, going far beyond standard endorsement contracts and the use of songs in commercials.

These companies — like Procter & Gamble, Red Bull and Nike — are stepping outside of their core businesses to promote, finance and even distribute music themselves.

A few months ago, Bacardi announced that it would help the English electronic music duo Groove Armada pay for and promote its next release. Caress, the body-care line owned by Unilever, commissioned the Pussycat Dolls singer Nicole Scherzinger to record a version of Duran Duran’s “Rio” that it gave away on its Web site to promote its “Brazilian body wash” product. The energy drink company Red Bull is starting a label that is expected to release music before the end of the year.

And at least some of this music is credible: a hip-hop song that Nike released by Kanye West, Nas, Rakim and KRS-One was nominated for a Grammy Award for best rap performance by a duo or group.

Unlike Starbucks, which got into the music business to sell CDs at its stores, these companies want to use music to promote products they already sell.

“It’s not about money,” said Sarah Tinsley, a global marketing manager at Bacardi. “It’s a branding exercise.”

Unlike the exclusive album deals that Wal-Mart is striking with groups like the Eagles, these companies are attracting artists at the height of their relevance. Two weeks ago, Converse released a single by a combination of artists that The Times of London called “a three-headed Frankenstein’s monster of coolness”: the Strokes singer Julian Casablancas, the producer Pharrell Williams and the R&B performer Santogold. Offered as a free download on Converse’s Web site, the song received mostly favorable reviews from both blogs and newspapers.

Continue reading...

Digital services look beyond the music

Dave Jaworski is CEO of PassAlong Networks, which is growing as it earns "pennies per transaction" on music, tickets and advertising.

Jupiter Research estimates that digital music stands poised to capture more than a third of all music sales by 2012, about $3.4 billion in the U.S., according to its figures.

But that number sheds light only on what retail services such as iTunes, and even will bring in. What's harder to quantify is the potential market for new-media companies that have — either by accident or design — sprung up in recent years offering digital music services to a wide range of clients.

MySpace, for example, emerged unexpectedly as a default service catering to the music crowd, growing so quickly that, in July 2005, News Corp.'s Rupert Murdoch bought the service for $580 million, a valuation premised on the lure of selling advertising to young consumers.

In 1994, technology analyst Esther Dyson laid out a prescient set of rules published in Wired magazine governing media and the Internet. Chief among them was that "content is free."

"Content providers," Dyson counseled five years before the rise of Napster, "should manage their businesses as if it were free, and then figure out how to set up relationships or develop ancillary products and services that cover the costs of developing content."

That's a lesson Mark Montgomery, co-founder and CEO of Nashville-based echomusic, took to heart when he broke from his co-owners of a Brentwood recording studio in 1999 to develop an online marketing company that specialized in music.

Today, echo can most easily be described as a firm that powers fan Web sites for acts including Keith Urban, Kanye West, Alicia Keys and Dolly Parton. Beyond merely posting a few pictures and concert dates online, however, echo's technology drills deep into each fan's profile, allowing artists to precisely target customers for items such as concert tickets, merchandise and ringtones.

Connecting in a relevant way

"Our platform allows us to connect to audiences in a very relevant way," Montgomery said of echo, whose revenue and employee count have more than doubled in each of the past three years, a growth rate that prompted Ticketmaster to purchase a majority stake in the company in 2007.

Dave Jaworski, a former manager at software giant Microsoft, has seen a similar wave of good fortune come to Franklin-based PassAlong Networks, a technology startup he co-founded in 2002. The company offers e-commerce technology that powers music purchases for sites ranging from EMI Christian Music Group's online store to that of national retailer f.y.e.

In the six years that PassAlong has been in business, it has more than doubled its office space to accommodate a growing staff — a stark contrast to the layoffs that have plagued Music Row since the 1990s.

"Similar to Visa and MasterCard, we get pennies per transaction," said Jaworski, whose office is decorated, not with gold and platinum albums like most music industry executives' offices, but with historic computers, from an early IBM PC to a laughably outdated Apple Macintosh.

With revenue-sharing deals in place on everything from music and ticket sales to online advertising, he said, "Lots of pennies add up quickly."

Music Row faces new realities

By all standards, 18-year-old country star Taylor Swift has made it in the music industry.

When her debut single, "Tim McGraw," hit in 2006, it simultaneously landed on Billboard's top country, pop and digital charts, while also securing a spot on Apple iTunes' weekly top 10 downloads list.

Since then, Swift has won several major music awards, even receiving a Grammy nomination for best new artist. Her debut album has sold more than 3 million copies, and in a genre-bending feat earlier this month she took a spin as co-host of MTV's popular Total Request Live show.

But to the nearly 20,000 mostly unseen people working in Nashville's music industry, Swift represents far more than the latest young artist to hit it big on the country music scene.

She illustrates the industry's new benchmarks of success in an era dominated by the easy availability of digital music, an explosion of new media platforms and a decline in album sales, in a business that has seen a third of its $14.6 billion retail market evaporate since 2000.

Call it the music industry's new normal. Or call it the result of a business thrown into chaos by 10 years of corporate consolidation and rampant piracy brought on by the rise of Internet technology.

In either case, life has changed — and is changing — for just about everyone on Music Row, from the songwriters and musicians to the publishers and record labels that make up the heart and soul of this city's most famous product.

What does this new era mean to a person like Liz Rose, the co-writer on Swift's "Tim McGraw," when a high percentage of sales comes through digital singles at the expense of pricey full albums? What does it mean to someone like Scott Borchetta, who signed Swift to Big Machine Records, the label he started in partnership with Toby Keith in 2005 after serving as an executive at the now-shuttered DreamWorks Nashville?

The short answer is that it means fewer people in the industry are probably making as much money as they would have in the go-go 1990s, when a closed network of record labels, radio stations and retailers could have propelled Swift's album to sell as much as 10 million copies. By the same token, more music fans, spanning genres and geography, probably know who Taylor Swift is and what her music sounds like.

Consumers aren't the only ones to benefit from changes in the music industry. New media companies that couldn't have existed 10 years ago are finding lucrative markets developing a range of products. And musicians who were once beholden to layers of industry gatekeepers can now deliver their work directly to fans through services like MySpace and iTunes, which in the past several years have played roles in catapulting to prominence fresh new acts like Gnarls Barkley and Feist.

For their part, music executives in Nashville and across the country have begun to shore up the future of the music business instead of fighting to protect its past.

As Jay Frank, who oversees music strategy for Country Music Television, put it, "The groups that have the potential to lose have already lost. Now, everybody just wants to win and is ready to try new things."

Sales fall, but airplay rises

That the music business is finally headed for a new business model serves as cold comfort to Rick Carnes, president of the Songwriters Guild of America, who, in speeches and presentations, is quick to lay out the same doom-and-gloom scenario he painted for a congressional subcommittee three years ago.

It goes like this: By law, a songwriter is entitled to 9.1 cents for every song sold, giving him a starting point of $91,000 if an album sells a million copies. A publishing contract eats up half of that, reducing the figure to $45,500. That sum is typically split in half again because many artists won't cut a track on their album unless they receive a co-writing credit. That money is often used to pay back the initial investment made by a record company. That now leaves the songwriter with $22,750. But included in most standard record deals is a clause that pays co-writers only 75 percent of their congressionally mandated royalties, leaving a grand total of about $17,000 in a songwriter's pocket.

That model may have been sustainable when publishing companies would bankroll a songwriter's career in the early years and when CDs sold in bigger volumes, Carnes said. But now, "professional songwriters have no future."

For her part, Rose said that, with the success of "Tim McGraw" fueled in large part online, she has no right to complain about digital technology.

But she points out that where it was once a thrilling financial prospect to get a songwriting credit on a hit album — even if your particular song wasn't a hit — the Internet has blown that opportunity away as songs are increasingly sold individually as singles.

"Having said that, it's also cool that we have iTunes because you can get sales there that you might not get from an album or at radio," Rose said. "There are both sides of the coin."

Songwriters and music publishers typically earn royalty payments from two sources: sales of music and through licensing fees paid by broadcasters, such as radio, television and, increasingly, the Internet.

While the sales side of the royalty equation may be sagging, publishing houses and the three U.S. organizations that collect payments on broadcast performances — ASCAP, BMI and SESAC, all of which maintain significant operations in Nashville — have seen revenues steadily rise in recent years.

In its last fiscal year, ASCAP reported annual royalty collections of $863 million, a 10 percent increase over the previous year, while BMI reported
$839 million, a 7 percent increase.

SESAC, which has its headquarters in Nashville, does not disclose its financial results, though President and Chief Operating Officer Pat Collins said his organization has seen similar growth.

Driving the increases has been a surge of new companies that are licensing music, from cable television using songs in hit shows such as The Sopranos to satellite radio and Internet music services like Those new opportunities, Collins said, have more than offset any flatness in a radio industry that has seen its playlists shrink.

Those gains have flowed to publishers as well. "We have multiple ways to sell music," said Gary Overton, executive vice president and general manager of EMI Music Publishing in Nashville. "TV, movies, radio and restaurants — anytime you hear music, we get paid. That's why we've been so healthy."

As BMI explained to its members last fall, changes in the music industry have "recast the traditional revenue structure" from one dominated by conventional broadcasters to a new age in which digital media services increasingly hold sway.

Collins said he doesn't know where future royalty streams may come from, but he can make at least one prediction: "Technology does not go backwards."

Labels seek new revenue

Record companies know that their 50-year-old business model, centered on selling physical products such as CDs, tapes and records, won't survive for the long haul.

But that doesn't mean record companies — or physical CDs, for that matter — are destined to fade away like typewriters or the horse and buggy, observers from outside and within the industry say. Physical copies of albums still account for as much as 85 percent of the $10 billion retail market for music in the U.S.

"No matter where this thing goes, there's always going to have to be people on the front end exposing new music and artists to people," said Luke Lewis, chairman and CEO of Universal Music Group Nashville. "Whether that looks like a traditional record company or not, I don't know."

The key question boils down to how and where record companies will make the bulk of their money in the future.

Today's top-selling acts are simply selling fewer CDs than artists did in previous years, undermining the industry math that has long held that 10 percent of a label's artists pay for the other 90 percent of the acts on the roster.

Where a decade ago the Backstreet Boys and 'N Sync were moving between 9 million and 10 million units a year, only one album in 2007, Josh Groban's Noel, scanned as many as
3 million copies.

To make up for that loss, the industry has begun experimenting with several new deal structures with artists.

Swift opted for a smaller independent label with the promise of more personal attention and early revenue than she might have received elsewhere.

What really made the deal work, however, were new opportunities to deliver music and video to specifically targeted audiences online, rather than having to rely on the traditional system of radio and retail, a route that has been dominated by major labels for a half-century or more.

Swift's gamble seems to have paid off. Her promotion team's push online not only helped her break through to a critical mass of fans, but also placed her among a younger, more vibrant audience than she would have found solely through country radio.

One new deal that's attracting plenty of attention these days is known as a "360," in which labels take not just a portion of record sales, but also a cut of an artist's publishing royalties, endorsement deals, and ticket and T-shirt sales.

The most prominent 360 deal maker has been concert promoter Live Nation. It struck a $120 million comprehensive revenue-sharing agreement with Madonna last year, and a similar arrangement with rapper Jay-Z for $150 million. That strategy led to a rift at Live Nation last week, with Chairman Michael Cohl, who wanted to sign as many as 15 such mega-deals, resigning over the decision by CEO Michael Rapino to take a wait-and-see approach.

Greg McCarn, vice president of marketing at Disney's Nashville-based record label, Lyric Street, said record companies should have been asking for a bigger share of revenue all along.

"We can pump hundreds of thousands — even millions — of dollars into acts that never sell enough records to enable us to recoup our investments," McCarn said.

Critics say deals like the 360 amount to land grabs by labels struggling to create new sources of revenue.

"It's certainly up to labels to add value where they're taking more," said Virginia Davis, who until recently was general manager of Warner Nashville's Raybaw imprint. She now manages pop-star-turned-country-hopeful Jewel for L.A.-based Azoff Music Management.

Davis said that with an artist like Jewel, whose 1995 pop debut, Pieces of You, sold more than 12 million copies, a label deal makes sense as she tries to re-brand herself as a country artist.

"She wanted to break into country radio," Davis said. "A label was the right choice for her."

Greg Hill, an artist manager with the Nashville office of Red Light Management, a Charlottesville, Va.-based music company started by Dave Matthews Band manager Coran Capshaw, said he thinks talking about whether 360 deals are the new model misses a larger point.

"It's not just about modifying an existing agreement and giving someone extra pieces," said Hill, whose clients include country singers Phil Vassar and Rodney Atkins. "It's about ripping up any owner's manual we've ever had on how to do business and changing it."

Ten steps artists are taking to create a brand, a longterm fanbase, and a sales machine

John Mellencamp
John Mellencamp, free songs via Vanity Fair

Thinking about social advertising and targeted marketing perhaps we should take a leaf out of the book of the rock stars. The biggest story last year in the music world was how Radiohead bucked the recording industry’s distribution and marketing system and gave away their new album. The short story is that they simply told their fans that they could go to a Radiohead web site and pay whatever they liked to download the album, with $0.00 being an acceptable amount. It was an extremely successful campaign - not only did most people pay for the files but the band received unprecedented amounts of positive media coverage around the globe.

Other bands have followed the model not least Trent Reznor and his band Nine Inch Nails. The band released a limited edition 2,500 units of a coffee table book that included multiple CDs and DVDs. It was exquisitely packaged, signed and numbered and cost $300.00. It sold out in two days.

I believe this form of social marketing could serve as a model for companies that have customers who are literally fans of their products. And I don’t mean Apple.

If we think of the bands mentioned above as companies that sell product then we can take a look at what these companies have been doing to increase sales of their product. Here’s what they do online:

01. They have blogs to which actual band members [think executives] post regular updates.
02. They ensure that the blogosphere is alerted to any new and breaking news or important posts.
03. They offer early access to special offers and discounts for their customers loyalty.
04. They give away free samples of their product.
05. They are active in their customers communities.

For the rest of the list visit

ad-sponsored music and the major labels

By: Lucas Gonze

What are the economics of ad-sponsored streaming music services like iMeem? Labels want some amount, most commonly quoted as a penny a play, and the question is whether this price makes sense, or if not what the price will have to be.

A song lasts 3.5 minutes. The majors have been asking $.01 for it. The site pays for the play by selling advertising. Let’s say the site shows a new ad every time the song changes. To break even the site needs to sell one ad per song at the rate of 1 penny a song, which gives you an effective CPM (”eCPM”) of $10.

A $10 eCPM isn’t feasible. Sites don’t earn that kind of rate with 100% sell-through. Even if were feasible it leaves no room for the rest of the business. They have other costs. They need to earn a profit, and it has to yield a return on investment comparable to web businesses that don’t pay music royalties; otherwise investors will move their money out of music-related products into royalty-free products like search engines.

A $1 effective CPM is closer to the mark, meaning that Myspace, Google, Facebook, etc need a 10X price reduction from the labels to make this business work. The labels see this as unreasonable. They’re already lowering prices from what they earn at the iTunes store — why should they keep going to accomodate third party businesses at their own expense?

The alternative business for the labels to be in is selling music by the piece. The majors gross about $.70 on a download at the iTunes store, 70X what they are proposing for an ad-sponsored play; $.01 is only 1/700th of that! So naturally the price change

Continue reading ...

Thursday, July 10, 2008

ReverbNation Registers 200,000th Band in First Twenty Months

ReverbNation, the leading Marketing and Promotion Platform technology for Musicians, Labels, Managers, and Venues, signed up its 200,000th Artist last week, adding 100,000 in the last six months alone. In addition, over 6,000 Labels and Managers have created profiles to promote themselves and their rosters, and more than 2,500 Venues and Clubs are using the ‘venue tools’ to help pack their shows, grow their fan bases, and integrate promotional efforts with musicians. To date, Artists and Labels have posted nearly 700,000 full-length songs to the site.

The success can be primarily attributed to the free suite of Fan Relationship Management (FRM) technologies the company provides for Artists, Labels, Managers, and Venues . The suite includes a content repository, promotional widgets and applications for viral distribution across social networks and blogs, integrated Street Team tools for motivating, tracking, and rewarding rabid fans, a communication platform to keep Artists connected with fans, and a comprehensive stats package to provide the insight they need to make marketing and promotion decisions.

Since inception, the company has focused on helping “Independent” Artists and Labels by providing marketing tools, for free, that are usually reserved for major labels with large budgets.

“In all my years as a musician’s coach and mentor, I have never seen the likes of ReverbNation for Indie musicians. They get it,” says Madalyn Sklar, owner of GoGirls Music and operator of the ‘’ website. “They absolutely understand the needs of the independent musician and build software that makes a difference for them everyday.”

“Are you an Artist that needs to generate a newsletter and send it out to 10,000 fans?” asks indie Artist Jeff Nelson of the Syracuse, N.Y. Rock band ‘Merit’. “Need a music player for your homepage or your Facebook page? Want to build a Street Team and have their actions tracked automatically? Want to know how long people listen to your songs before they turn them off, or if they passed them on to friends? Do you need help finding venues for your tour? I need all of that. ReverbNation delivers this and more. These guys offer the sickest platform of tools I’ve ever seen, and I can actually afford it, because it’s free.”

Use of the ReverbNation technology has recently spilled over from the indie ranks to some of the more recognized names in music as well, like 50 Cent, Kenny Chesney, Madonna, O.A.R., Natasha Bedingfield, Trans Siberian Orchestra, Sara Bareilles, and Sean Kingston, to name a few. Over 60 of the Billboard Top 100 now have a presence at

Said Chris “Broadway” Romero, Creative Director, G-Unit Records (50 Cent), “ReverbNation's TuneWidget and tracking tools have been great for us here at G-Unit Records and Their tools and applications let our fans easily become involved in the marketing and promotion of our music across the web. There are a lot of ‘all in one’ solutions out there, but the ReverbNation platform is the only one that allows us to develop a marketing strategy first, then use the technology to execute it.”

“We build technology that can help virtually any musician, label, manager, or venue,” says Lou Plaia, Co-Founder and V.P. of Artist Relations at “We help Artists take the music to the people, wherever those fans are spending their time online, and then empower Artists with tools for leveraging their content to drive real business objectives at those touch points. Artist objectives might include selling music, merch, or tickets, extracting valuable fan relationships from the social networks, or keeping content up to date across all of their sites. We give them real insight into what’s happening with their content and how their marketing efforts are affecting their overall Band EquityTM. At the end of the day, the most important asset an Artist has is their portfolio of fan relationships, and it’s our mission to help them grow that asset.”

Over the coming months, ReverbNation will expand the offerings to Artists even further, giving them more tools to succeed at the ‘business’ part of the music business, including: Low-cost digital distribution to iTunes and other retailers, a dynamic ‘Reverb Press Kit’ for media outreach and gig submissions, a ringtone generator and sales tool, and several enhancements to the FanReach communication tool. In addition, the company plans to introduce an “Artist Sponsorship Platform’ where Brands can link up with thousands of interested Artists at a time, creating a new revenue stream for Artists in these challenging times of declining music sales

Tuesday, July 8, 2008

Interview with Jon Avila; Founder of So Cal Musician!

by: Sade Champagne

Jon Avila overcame poverty and misfortune, and started his own business "So Cal Musician"! So Cal Musician is often described as "a booking & networking company that is involved with over 2,000 musicians and 600 venues in Southern California."

I have personally booked many shows with So Cal Musician, and have to honestly say that they are one of the best (if not the VERY best) booking/networking companies I have EVER worked with! Jon is also a musician himself (rapper/songwriter), so he knows firsthand the obstacles and scams musicians typically face.

What is especially fantastic about Jon's music (whose MC name is Blitz The Insomnyac) is that he doesn't fit the stereotypical description of what a rapper should look like. The Insomnyac writes about his life, and is known for his deep and sometimes comical lyrics, witty punchlines, and high energy performances!

His company So Cal Musician offers many things that most booking and networking companies do not. Some of these extras include: Artist of the Month features, Designing fliers, Radio Promotions in some cases, going to every single show that they book and more! Jon's life story is just beginning, but he has already inspired many artists, aspiring entrepreneurs and business owners. He proves that no matter where we come from or what we've been through, we can STILL rise above our circumstances and achieve our dreams. WE create our OWN destiny!!!!

Bio written by: Sade Champagne

Jon was EXTREMELY thorough with his answers, and it was a pleasure interviewing him via IM! =)
Sade: Okay let's get started! =)

Sade: Thanks so much for doing this interview Jon!
Jon: No need to thank me,
Jon: Thank you! :)

Sade: Please tell me a little about how and where you grew up.
Jon: I was born and raised in a small city in Ventura County called Camarillo. Both my mother and father were disabled and physically unable to work, so my brother and I didn't have a lot growing up, however it taught us to be thankful for what we did have. We lived in a small apartment in West Camarillo. Even though we were on welfare at the time, I guess the bright way to look at it is that my mother and father were definitely around to raise us as we were growing up. Most people would look at it as being unfortunate to not be wealthy, but I looked at is as fortunate to have my parents around the house.

Sade: When did you first take interest in music?
Jon: Shoot, I have been listening to music since I could remember! I grew up listening to a great variety of things such as The Beatles, Tupac Shakur, Donnie Osmond, Michael Jackson, Led Zepplin, Queen, Eminem, Frank Sinatra, Dean Martin, the list goes on.

I was in plenty of speech classes growing up, and I listened to music non-stop, not to mention, I absolutely loved writing short I suppose when you fuse those three things together, you get a musician and songwriter.

Sade: That brings me to my next question. Who has inspired you the most in your career? Please name a person inside the business and someone outside of the business.
Jon: Inspired me to write music? Or to start So Cal Musician?

Sade: First music; we will get to So Cal later.
Jon: If I were to name some people that influenced me to write in the style that i do, the list would be very long!

Sade: You can just name a few if you like.
Jon: with Lyric complexity, I have always liked Royce Da 5'9, Busta Rhymes, Rakim, Aceyalone...from a production standpoint, I have enjoyed anything that comes from the Dr. Dre/ Aftermath camp. And of course I was always influenced by Tupac Shakur, and his style of music. As a kid I always loved how you could totally tell that he was writing from his heart. Another would be Eminem and his incredible ability of storytelling back in the day. Of course, I was also heavily influenced by people like Dean Martin, Queen, and Michael Jackson.

Sade: When did you know that you wanted to pursue music (and business) for the rest of your life? You can totally give 2 separate answers.
Jon: Well for music, I always had a way with words, putting them together, creating stories and songs. I just loved expressing myself through music. And not just hip-hop, I have written a few rock songs with some bands in my time. Putting every ounce of feelings and emotion into a song in which you created is one of the most beautiful things you can do in life. So I wouldn't say there was a point where I had to make a decision whether or not I was going to do this for the rest of my life. I just knew! I was going to be involved in it one way or the other.

After high school, I decided to try and book a few shows for myself and get myself heard. I kept running into bad promotions companies and sticky situations. I couldn't even count the times that I got screwed over as an artist by promoters. That's when the idea of "So Cal Musician" came along. And the idea was to create the exact polar opposite of what I was seeing in the music scene. I wanted to create something that treated musicians right, and at the same time helped them reveal their music to as many people as possible. A promotions company that actually worked for the musicians!

Sade: When did you began rapping?
Jon: I started writing hip-hop music when I was 13. It was all I did. Again, my family did not have a lot of money growing up, so all I would do at home is sit down, listen to the half broken radio I had (the ones where you have to hold the antenna to get reception), and write music all day long. It eventually consumed me to the point where all I was doing was writing lyrics. I would be in class thinking of good stories to put into songs, and writing them down when I was supposed to be taking a test. I would write all over my palms and arms when I would think of good ideas so I wouldn't forget. So I basically spent nearly all of high school perfecting my style and lyrical capabilities.

Southern California

Sade: What is the best advice that someone ever gave you about following your dreams?
Jon: I'm not gonna lie,
Jon: That is a good question!
Jon: Well to be honest, when I was growing up, I didn't have a lot of support when it came to music. My parents for the longest time didn't even like the fact that I listened to rap, let alone wrote it! And of course with the high school I went to, I was either jumped or had things thrown at me almost every day for being the white kid who was trying to write rap music. There were a some white supremacy kids who would jump me after I got off the bus for the music I wrote. Somehow I used all the negative energy that was pointed in my direction and used it to my advantage. The more they didn't believe in me, the harder I wanted to try and prove them wrong and succeed in life. That was my main motivation.

I did have one friend who had always supported me in what I did. He was the only one who actually took the time to listen to my music (and he was a soldier for reading all of it, because I wrote A LOT). Oh and my girlfriend at the time-she was supportive of my stuff too.

Sade: What is the best advice that you would give someone about following their dreams?
Jon: When you put your heart and soul into it, your dreams and goals become your blood, sweat and tears! Your dreams become you, and you become your dreams, it's kind of hard to describe. But when you get to that point, anything is possible!

Sade: How important is it for an artist to be involved in ALL aspects of their career (creative process, recording, publicity, etc.)?
Jon: Well if music is what you love, it is important that you are ready to do anything and everything for it. Now of course there are places musicians need to go to to get help to do other things, i.e. recording, booking, management. The problem I saw, was that there was no reliable place to go to for help. And that is why we started So Cal Musician.

Sade: How involved are you with the business aspect of your career? And how important do you think it is for every artist to be involved with the business aspect?
Jon: It really depends on where musicians want to take their music. Some musicians want to pursue a career, some don't. Some see it is a goal to get signed, some like to write music as a hobby, and don't take it too seriously.

When it comes to serious musicians looking to pursue a music career, I would say that it is very important to stay involved in the business aspect. This means, constantly writing music material, playing gigs, developing fliers, press kits, street teams, whatever it takes to get your music out there.

Sade: What can an artist do to avoid getting scammed?
Jon: They should network with other musicians, do some research, find out who the best company is to work with in whatever they are looking for. And, here's a big one, make sure you read EVERYTHING you sign when working with companies. One of the things that I kept running into constantly before So Cal Musician was in commission, was the countless amounts of shady contracts that other companies are having musicians sign. Just make sure that you are 100% confident in the people that you are working with. Especially with promotions companies. There are a lot of sharks out there! Again, hence the reason why we started So Cal Musician.

Sade: Were there ever times when you felt like giving up on your dreams? Tell me about one of those times.
Jon: There has been times, where I have felt completely overwhelmed. The thing that keeps me going is the musicians we work with. I see so much talent out there, and there is no reason why that talent should not be discovered. Seeing that talent keeps me going!

Sade: Take me through a studio session with So Cal Musician (SCM Records).
Jon: OK, well we just launched our Studio department at So Cal Musician, SCM Records. It is more than a studio; more so a place where musicians can come to when they feel they are ready to release an album. We basically equip you with the best producers and recording engineers in our network, and take you to our studio in Simi Valley, and a team goes right to work on constructing your masterpiece. This is a place where SCM producers, engineers, graphics designers, photographers, all come together to put together the top-notch album the musician is looking to release.

Sade: What do you think of the music industry today? Do you feel that it’s taking a turn for the better or worse?
Jon: I strongly believe there is an indie music revolution going on right now, and that revolution is going to change the world! And I believe that So Cal Musician is a part of that. I believe the independent and current undiscovered musicians are the future of the music industry.

Sade: That brings me to my next set of questions. When and why did you decide to start your own business?
Jon: When I was 18, my parents got a divorce and I was kicked out of the house. I was working 60 hours per week and going to school full time. I was a business and journalism major in college while I was sleeping in my car and sleeping at random friends houses. This was when my brother and his best friend (two successful entrepreneurs) found out that I was homeless, and decided to move me into their beach apartment until I could get back onto my own two feet. It was then that I was constantly being taught how to run successful businesses, from my brother, his best friend, and the college I was attending. I was getting information from all sorts of directions.

Jon: After a while, I was able to lease my own house, and that is when I started trying to book shows for myself. The only problem was, I kept running into countless amounts of shady promoters. There was even one guy who wanted me to sell 100 tickets at the rate of $30 each for a local show in a coffee shop. It was insane! And even for the shows that I was able to book, I was treated very poorly. All the musicians were, and I wanted to change that. I wanted to create the polar opposite of what I was seeing.

After running an at home recording studio in my house for some time on the side, I started networking with massive amounts of musicians. This was anything from Rock to Hip-Hop to Country to Metal and so forth. I copyrighted the name So Cal Musician immediately, and just kept networking with more and more musicians from San Diego to Santa Barbara.

Eventually, I went down to the Majestic Ventura Theater, with a new approach. Rather than contacting a promoter, I went straight to the source and talked to the manager of the venue. I let them know that I worked with So Cal Musician, and So Cal Musician had a massive network of over 1,000 musicians looking to perform. And after a good 30 minute meeting or so, we had our very first show which consisted of myself and 3 other hip-hop artists that I networked with. We threw the show and it was a major success, and the theater asked us to throw another show from the musicians in our network. And just like that, we threw a very successful Rock N Roll show. It wasn't long before we started doing all of the local booking at The Majestic Ventura Theater. The idea was to build a new Booking & Networking company that was there for the musicians. And it was So Cal Musician.

Sade: How has being a business owner changed your perception of the music industry?
Jon: You have good questions!
Sade: Thanks!
Jon: I swear I should hire you to do the Artist of the Month features for us!
Sade: =)
Jon: :)
Jon: I wouldn't say that being a business owner has changed my opinions or views on what music is all about. However, it did open my eyes. Now that we network with over 2,000 musicians and host shows at plenty of venues, I have realized that there is an Indie Music Revolution going on right now. The more I see, the more I want to help musicians get heard!

Sade: Tell me all about your business So Cal Musician and what it is that you do for artists
Jon: Well, like I said, the idea is to work with musicians, not have musicians work for you, which is what I think that most promoters have confused these days. The idea is to help musicians expose their music. So Cal Musician works with all genres of music, ranging from hip-Hop to Rock, Metal to Country and so forth. We originally started as a Booking & Networking company, and that is where we excel the most. Of course now we have grown and we have other departments to help out musicians such as the Audio, Video, Photography, and Graphics Design Departments. We book a great amount of shows for artists at places such as The Majestic Ventura Theater, The World Famous Derby Night Club, 118 West, Rock City Studios, and more.

The website in particular is where you can find out a lot about the company and how each department is run. There are sections on the website for each department.

Sade: What makes So Cal Musician so different than other booking companies?
Jon: Well, So Cal Musician is a company designed by musicians for musicians. Over half of the people that are working with us are musicians themselves. The idea is to not get greedy, and more so, take part in the indie music revolution that is going on right now. Help musicians get their music out there, and so forth. I don't want to sound too cliche and say "We care" and that is what makes us different, but we do put the musicians first!

Sade: What are some things that SoCal offers artists that other booking companies do not?
Jon: One of the biggest things that we have done so far is our new "100% of the door feature." This is where we basically give the band or artist 100% of the door that they bring in -- after they bring in a certain amount of heads (people). For example, at The World Famous Derby Night Club in Los Angeles, we give you 100% of the door that you bring in after you hit the 30 person mark. So this means if 100 people come to see you, you are walking home with $700 that night. We literally have a person at the door of the venue tally marking who is coming to see who, and with this system, we have been able to help musicians walk home with a good amount cash in their pocket. The idea is to not get greedy. Again, we are working with musicians.

Sade: How would someone go about starting their own business?
Jon: They say only 1 out of every 10 new businesses succeed, and the reason why So Cal Musician succeeds and does it so well, is because it isn't just a business to me or anyone that works with So Cal Musician. It isn't about the money. It is about standing up for what you believe in! And we believe in the music. We all put our blood, sweat and tears into So Cal Musician, because it isn't just a business. It is an idea. It is a belief. And beliefs and ideas never die.

Sade: What are some of the difficulties (big or small) that you've faced so far in your business career? And how did you handle them?
Jon: There are millions of hoops that you have to jump through to keep your business on the ground, especially when starting it up. Of course you always have to keep in mind your competitors, always know your weaknesses and strengths, however, So Cal Musician in particular is notorious for the way we treat musicians, so we haven't had to deal with anything too difficult.

Sade: What career goals are you still trying to achieve?
Jon: So Cal Musician is only in it's beginning stages as of right now. We have a lot of goals that we are going to achieve in the next year alone. This includes managing venues from San Diego to Santa Barbara, the launch of the So Cal Musician Magazine and plenty more.

Sade: A lot of artists talk about how much they financially struggled, especially on the way to their dreams. What can an artist do to make sure that they are able to accomplish their dreams and not have to financially struggle at the same time? Or is it unavoidable?
Jon: Well the struggle is inevitable. No matter what your dream may be, you are always going to have to work hard to get there. Nothing in this world is easy! Of course you can always choose your battles and see how much of a struggle you are going to go through, by choosing the right people to work with. Again, there are a lot of sharks out there, and you have to be careful.

Sade: How important is the internet to an artist's career?
Jon: The internet is the perfect example of how the music industry has changed. Everything is digital now. When So Cal Musician first launched, 90% of the musicians we were working with were coming from alone. Now, I would say that 80-90% of the new musicians we work with come from "word of mouth". But again, almost everyone in this world has access to the internet. Even myspace. It is the number one networking tool in the world, and it is good to use that to your advantage. You can get your music heard by millions of people without even having met them yet.

Sade: Do you think that internet sales may be more important than album sales these days?
Jon: Places like iTunes can help a musician with selling their albums, indie musicians tend to gain more support from people when it comes to selling actual CDs. People come and see a band that they love that is coming up and that inspires them to actually go and support the band by purchasing their album.

Sade: How has positive thinking helped you in your careers, and who is apart of your "dream team"?
Sade: (A "dream team" is a group of people who support you through the good and bad times, lifting you up when you don't know how to do it yourself. Can be family members, friends, managers, publicists, etc.)
Jon: So Cal Musician's dream team is the musicians of Southern California. No Joke. We get so much love and support from the musicians that we work with, they are there for all the good and bad times. There's good times, I remember when it was my 21st birthday, and we booked a band to perform in front of a huge national audience.. the band got the entire 1,200 seater venue of people to sing happy birthday to me. It was amazing! And of course there are tough times, and the musicians that we work with show their love and support during those times as well. Like I said before, it is the musicians of Southern California that really keep us going!

Sade: Recently I had the pleasure of performing in a show with you (Rock City Studios). Do you get performance jitters? If so, how do you get rid of them?
Jon: Again, I have always been a speaker, since I would compete in speech tournaments when I was a kid. I was always trying to be the center of attention too, so I don't really get the jitters, I just get excited! I take every ounce of adrenaline and use it to my advantage; and because of that, it is very common that you will see me on stage running around like a madman with incredible stage performance and enthusiasm!

Sade: What are your pre-performance rituals?
Jon: Practice Practice Practice.

Sade: Do you think that it is imperative for an artist to have a manager and agent? Why or why not?
Jon: OK this is a good and very important question!
Sade: Thanks!
Jon: With as many shows as So Cal Musician throws, we work with countless amounts of musicians, and every now and then we have a band "manager" or "agent" come into the picture. I will say that 90% of the time these managers do not tell the musicians everything they are supposed to (like telling musicians the requirements that venues have in order to perform), and it gets the musicians in VERY, VERY bad situations.

It is actually to a point where a lot of promotions companies avoid bands with managers at all costs! Our advice is to avoid a manager at all costs, especially when first starting your career. It is good to stay independent when you are first getting your name out there. When you get to the point where you yourself as an artist or your band is suddenly becoming the next big thing, and drawing about 350 people per show you perform, it is a really good idea to get a manager at that point. BUT BE VERY CAREFUL when choosing a manager. Bad ideas for a manager: Someone who is a girlfriend to one of the members of the band, family members, someone who has little to no experience in the music industry. Good Manager: someone who is humble, yet very professional, has plenty of experience in the industry, and can represent your band in a good manner. Keep in mind, your manager (if you choose to have one), is going to be the voice of your band. So again, be very careful when you choose someone to be it. They MUST know exactly what they are doing!

Sade: What is the most difficult part of your career? What is the best part of your career?
Jon: The best part about my career with So Cal Musician is seeing the "little guy" become the "big guy", and seeing the musicians actually climb to the top and achieve their goals. The most difficult thing about our career is seeing musicians get into bad situations with bad promotions companies. However, when we started So Cal Musician, I had to make a choice. Am I going to pursue my own performance career? Or take on the responsibility of helping thousands pursue theirs? And after seeing how musicians have been treated by other companies in the past, the choice was a very easy one to make. We are here for the musicians!

Sade: Any final thoughts?
Jon: I think that covered it!
Jon: You are indeed very, very good!
Sade: Thanks Jon!
Sade: Thank you for your time, I will let you know when the interview is up at Urban Music Strategies! =)
Jon: Any time, you rock!
Jon: Thank you!

Check out So Cal Musician's official website:

And check out their primary myspace:

Blitz The Insomnyac's myspace:

Also stop by their other myspace pages below:

To see more from Sade Champagne check out: