David Dufresne

The Music Industry: where is it going ? (and what does it mean for YOU, the musician).

Recently, in another forum, I got involved in a discussion about where people believe the music industry is going.  As a very passionate music fan and entrepreneur, it's a topic that I have been thinking about on a daily basis.  Now that I've joined Bandzoogle as CEO, where we work closely with thousands of independent musicians that are serious about their art and career, it has become an almost-obsession.  In that forum, I summarized my thoughts on "how-to-make-money-from-music" as follows:

I think there are 3 ways that a creator can earn from the music he or she creates:

1) Monetize ownership of the music
2) Monetize access to the music
3) Monetize 
enjoyment of the music

I wasn't there, but I believe the bulk of the wealth in the music industry was built on #1, in the last 20 years, through the CD-Release complex and whatever was going on before (Thanks Kyle: 
http://www.hypebot.com/hypebot/2009/03/the-death-of-the-cdrelease-complex.htm).

Now everyone realizes that, technology helping, #1 is slowly fading away and they try their best to get into the #2 game, pulling on their fractions of cents and .0001 percentage points before others do it faster and better (note: I meant through Youtube, Mog, Spotify, Rdio, Pandora, Rhaposody, Jango, Thumbplay, etc.).

What only a few people have realized is that where the money is, now and tomorrow, is #3. Sure, you can still earn from #1 and #2, but it won't happen if #3 doesn't happen first. Problem is that #3 is hard to define (my clumsy stab at it: 
http://bit.ly/d2G4cy), and it's still not clear how you build strong business models around it.  Biggest problem is that there are many, many people that are motivated to keep #3 from happening if #1 and/or #2 do not happen first. That's the bottleneck.

Now, I would be happy to hear what our members think about this.  Are you getting revenue from the music you create and perform ? The counter here is getting dangerously close to $3,000,000. That's amazing. But is it important for you ? Do you think your "revenue mix" will change in the future ? Are you selling your music ?  Or are you selling experiences, where people enjoy your music ? Or both ?

As for the "industry", earlier tonight I read the first part of a series of blog posts that Jeff Price, CEO at (digital distribution company) Tunecore, is writing. I strongly urge you to go read the whole thing. Here's an excerpt:

"The reality is:

  • More musicians are making money off their music now then at any point in history.
  • The cost of buying music has gotten lower but the amount of money going into the artist's pocket has increased.
  • There are more people listening, sharing, buying, monetizing, stealing and engaging with music than at any other point in history.
  • There are more ways for an artist to get heard, become famous and make a living off their music now than at any point in the history of this planet.
  • Technology has made it possible for any artist to get distribution, to get discovered, to pursue his/her dreams with no company or person out there making the editorial decision that they are not allowed “in”.
  • The majority of music now being created and distributed is happening outside of the “traditional” system.

And to reiterate, sales are up… "


This is definitely an optimistic list of statements, and refreshing when compared to most news we hear or read about that quote the RIAA or any of the major labels or retailers. But again, I wonder what it means and what it will mean for talented independent artists.

Hopefully it will enable a bright future for those that deserve it.  And hopefully we at Bandzoogle can do our part and help !



Posted by David Dufresne on 10/15/2010 | 14 comments

Comments

scardirtymusic.com
Posted by scardirtymusic.com on Oct 15 2010 6:01 AM
This is very very good David. I've been with Bandzoogle since 2007 and until then i had only dreamed of a place like this to showcase my talent and love for music. Technology has changed the music industry and no longer will have artist have to be ripped off by records lables etc: Thanks for this post
Crash Cadet
Posted by Crash Cadet on Oct 15 2010 2:19 PM
Thanks David. These are good links. Of course, it's in Jeff Price's interest to talk up independent musicians who use his service or ones like it. The real problem is getting the word out. I distribute my music through Tunecore, so it's on itunes, last.fm, etc all over the world. I'm on twitter, soundcloud, myspace, facebook, etc. All of that does no good without publicity, however.
Charly Tate
Posted by Charly Tate on Oct 15 2010 3:36 PM
I love this post, David! I've never believed all the talk about the music industry dying, and made it a rule to ignore all the claims that it'll fall apart completely within 'x' years. As you so wonderfully explained, there are so many new avenues opening to the musician there's no excuse. A successful career still takes dedication and drive, but it's so much easier to keep in touch with fans directly, which is what they love. My biggest drive is to bring joy and spread sunshine through my work. Sure, getting a few bucks is great, but getting people to dance or smile feels much better. I love the creative process (writing, singing, graphic design) just as much if not more than actually promoting my music. Because of accessibility and ease of creation nowadays, people have more freedom to create the music they want to create, which makes for a much more honest artist who truly loves what they do. With that kind of attitude, it's no wonder people are still buying music like crazy. :) As the industry shifts, it forces everyone to let their creativity loose more and more, which is great. Awesome post, I want more ;)
Sodacon
Posted by Sodacon on Oct 16 2010 5:04 PM
I've done this for a long long time. Many companies claim that they are here to help artists and always have advice. Then you read through the article and there are no "specific" answers, just bullet points and vague references. Problem is most of them are businesses just concerned with lining their own pockets. Plus, they all claim that it's important to use social media and all these different time wasting tools. When I started playing in a group back in the day, there were a lot less people doing it. It was much more hip to be an artist back then and much more rare. Out of all the artist sales that were mentioned, how many of them were artists with great songs that still had trouble selling them. Probably a bunch. Fine, have a web site, have a social media presence, get on iTunes and blah blah. But make no mistake; unless you're rich or know somebody in the business first, the only way your going to have people truly enjoy what your doing is to get out there and play live.
WWW.QUIETSTORMBEATZ.COM
Posted by WWW.QUIETSTORMBEATZ.COM on Oct 16 2010 10:03 PM
very interesting article, nice insight
thegreentrees
Posted by thegreentrees on Oct 17 2010 3:16 PM
great post david! thanks for taking leadership with bandzoogle and bringing forth more clearly the path of monetization for the music. for me personally, i had a huge shift, when i realized (at 41! finally! which doesn't mean i have all my ducks in row :)) that's it's all about the marketing, fundamentally, foundationally! not just for the music, but for everything in life. yes , everything. it's all influence, building infrastructure, filling up the marketing funnel... and of course, delivering the killer value product, in our case songs/music. ... i encourage everyone to think bigger than their music, deliver experience, a community, a vision for people to interact with. their will be other ways to monetize along the way i.e. joint ventures, fundraising, merchandise, affiliate offers,..... just bring value to your fanbase/community/tribe. and through the long haul you'll have a truly dedicated fan/partner/client. in this age it's global, i don't remember who said it, but it strikes me as true, strive for 1000 rabid fans throughout the world, not your hometown. (everybody here in bandzoogle has fans out there we need to put the music in front of them, that's marketing (and it's not a bad thing, deliver value, have fun with it, and it's a cool thing) reality is it's not about killer songs, and it never will be (let that sink deep) it's not about building a better mousetrap and, again, it never will be it's about bringing the audience/the fans/ the market to the mousetrap (whether it's better or not) so there you go, my sunday morning input :) stay quacky! captain figgy
Pinto and the Bean
Posted by Pinto and the Bean on Oct 19 2010 2:39 AM
Nice article. I'd like to print your "the reality is" section with the bullet points. That's a nice thing for us to have on the wall when things start to get overwhelming. Paul
TheBluesBusters
Posted by TheBluesBusters on Oct 22 2010 1:59 PM
David: You made some very good points. My first record was on vinyl so I've been around for a while. I've been part of and studied the industry for many years. The funny thing is that the path to success remains the same. 1. Work very hard to be a talented musician, never stop learning. 2.Play as many places as you can as often as you can. 2. Build up your audience and communicate with them through all means direct and indirect that you can find 3. Produce a CD that is outstanding. 4. Sell over 10,000 units at gigs and online 5. Then an established agency and label will sign you and you are on your way. Each year over 33,000 CDS are produced. Only 180 sell over 500,000 units. It's a tough road and few succeed. There is no short cut to hard work and talent. Bruce Andersen TheBluesBusters
Stinky Foot Studios
Posted by Stinky Foot Studios on Oct 22 2010 6:36 PM
The music business is going to hell in a hand basket...and I'm drivin'! http://www.stinkyfootstudios.com
Brandxx
Posted by Brandxx on Oct 27 2010 6:48 AM
;)Thanks for the share......Being involved in something is One thing. Yet, to share what you learn and view is totally a great way to keep the site worthy of artists partnership. Recently, My partner and I experienced young talent who just want to create and get the product to the public without truly recognizing what is going on. The business(like all business) is shrewd. Yet, I like to believe music allows a edge; as mentioned. The artists are anxious(understood)yet, to honestly present yourself......Planning is part of getting it done. Success is every step of the way. Again. Thank you uppermost. This article is truly on point for everyone. We can create till the day is long into years and not get what it is we strive to achieve......Scram
Brendan Perkins
Posted by Brendan Perkins on Nov 10 2010 11:23 AM
I think you have to make music for the love of it nowadays. The music business is now utterly insular and has very little to do with musicianship. I really hope someone can prove me wrong and dispel my cynicism. ;)
dirtysurprise.bandzoogle.com
Posted by dirtysurprise.bandzoogle.com on Nov 10 2010 8:22 PM
Being a "local" cover band, we have noticed a BIG change - most in part by the economy - and another by a younger generation. Most live music venues where we are from (in the past) cover bands and even regional artists would thrive on the amount of work and gigs we had. Not today. DJ's are killing local cover bands. It's much cheaper for a club owner to hire a DJ than to pay for a good band. And with the younger generation (no offense) - they don't come to a club for the live music, they come for the dance music the DJ is going to play. It is very frustrating to say the least - and we don't see it changing anytime soon...
FAIYA
Posted by FAIYA on Jan 5 2011 3:45 PM
Great article. The new music industry is very exciting to be a part of because it has become all the more competitive. The ones that will make it boils down to the ones who work not just the hardest...but also the smartest. As you can see on my site www.FAIYA.net i've implemented all links to sites that can help monetize my efforts (iTunes, Youtube, Reverb, Myspace, etc.) ... and if the visitor opts to dig more into my actual website, they'll run into more opportunities to purchase exclusive content. Cheers to all my fellow brothers and sisters working hard for the "impossible" dream !!! -FAIYA www.faiya.net
Blue Fire Films
Posted by Blue Fire Films on Jan 5 2011 4:15 PM
It's about adapting, creating avenues, understanding, patience and fan loyalty. Promoting is so critical. If you do not promote then who will know you exist?