Posts Tagged ‘music business’

Hiatus? or Hard at Work?

Friday, April 15th, 2011

I have not posted any blog entries here in over a year! At first glance, one may think I have been on some type of a hiatus.

–noun, plural -tus·es, -tus.
1. a break or interruption in the continuity of a work, series, action, etc.

The truth is that I have *not* had a break and have in fact been working quite diligently with partners on a project that could have a significant impact on the entertainment industry. This project has been held very close to the vest and though still in beta is about to be unveiled.

Very shortly I will begin to dive into more detailed discussions on the project; but for now I invite you to a sneak peek into what I have been working on.

I present

– Big Strad

The First Thing That Comes To Mind

Saturday, February 20th, 2010

Today I want to throw out a few names and have you think about the first thing that comes to mind.

Lady GaGa, Marilyn Manson, Lil Wayne, Madonna, Andre 3000 – George Clinton.

All are artists in the music biz. But is it the music itself that actually comes to mind first? Or is it their public facing characters ?

Many, including myself, feel it’s definitely the characters that come to mind first. In fact, without the characters, many artists may have never generated enough of a buzz to be noticed over the deafening roar of everybody else, and consequently we may have never gotten around to having ever heard their music – no matter how great the music was. A prime example of cause and effect.

… to many artists, having to have a reason other than what they feel they do best to even be heard is a rude-awakening and a bitter-tasting pill to swallow.

Don’t get me wrong, this type of character branding is nothing new, and it’s not just entertainment biz related – it exists everywhere. But to many artists, having to have a reason other than what they feel they do best to even be heard is a rude-awakening and a bitter-tasting pill to swallow. But once you accept it, and perhaps even embrace it, the world is yours.

I placed George Clinton in the list above rightly so, because he was an absolute master at characters. As much as I enjoyed the music of Parliament / Funkadelic, I also could not deny the characters; Dr. Funkenstein, Brides of Funkenstein, Diaper man, Sir Nose, Horny Horns, every album cover; they were everywhere. Even though William Collins was an undeniable bass playing sensation that played on many of James Brown’s mega hits, prior to coming to George Clinton’s camp he was just a bass player. So what did George do? He created a character – Bootsy. The rest is rhinestone rubber band history.

– Big Strad

Pink Elephants

Tuesday, November 3rd, 2009

There is an entire generation living amongst us that only looks at TV because the networks refuse to put their favorite reality shows online, do not listen to the radio even in the car (as all new cars come equipped for iPods), would rather text on a phone than talk on it, can tweet for hours on end and owns not a single CD instead insisting on obtaining all of their music via a plethora of Internet sites that allow downloads, streaming, etc.; all of it available 24/7 and much of it being totally free. In fact, actually owning the music is not really that important – they only want to listen to it for a while.

This generation prefers the pull methodology to the push methodology that I previously discussed here and how it gives them the power to choose what they want to see and hear, when they want to see and hear it. What I didn’t really elaborate on is that just like physics, for every action there is an equal but opposite reaction. The power gained by today’s Fan has come at the expense of the entertainment industry itself, which is still based on the push methodology and a series of controls that filter the volume of music that is released to the public.

One of the pink elephants in the room is the power of choice.

Every now and then one of the many pink elephants in the middle of the room that no one likes talking about really needs to be pointed out. One of the pink elephants in the room is the power of choice. Big, strong, powerful, able to stampede at will, controlled by Fans…yet not talked about much in industry circles. There are those that still carry on with business as usual as if nothing has changed, oblivious to (or ignoring) the fact that the entertainment industry will have to better align itself with the lifestyle of today’s Fan very, very shortly. But hey, maybe we can just sit a lamp on the elephant and call it a table. Maybe nobody will notice, and even if they do, they won’t acknowledge it or say anything about it anyway right?

– Big Strad

The Internet

Friday, July 17th, 2009

If you are too young to remember back as far as the dotcom bust then you may not get much out of this post. However if you do remember it and you market music, then I would like to point out some observations of mine. Let me first state that these observations are not really earth-shattering, but perhaps they may confirm similar thoughts that you are also having.

Looking back at the consumer of 1993, we see that the norm was a push mechanism where targeted material (song, video, commercial, etc ) was broadcast to you. You had the ability to choose what channel / station that you wanted to watch, but once selected there were not options – except selecting another channel / station. The consumer was the endpoint for the broadcast and could not participate in the broadcast moving elsewhere; meaning even if there was material that caught your attention you could not pass it on to others, except perhaps with a verbal attempt at explaining to others the content of the material. You also had no mechanism to interact with the media – it was a one way street.

15 years later, though these push mechanisms are still used by consumers however there are now more options available. One of them is a pull mechanism that the Internet provides. There is now an entire demographic that has grown up on, and prefers the pull mechanism. They have the power to choose the material (song, video, commercial, etc ) that they want to see / hear, when they want to see it, and with mobile technology growing by leaps and bounds, where they want it. Interaction with the content provider by leaving comments or replies is a large part of the norm in the new consumer world. The new consumer also has the power to pass on material to others by emailing, embedding, sharing, re-posting, re-tweeting, etc.

In a nutshell, the new consumer is now a major partner in your marketing campaign – or at least they should be.

Not only is the communication street now two-way, but with the ability for the new consumer to do one-to-many types of forwarding (such as re-tweets), the power to create a viral type of buzz actually now lies within the new consumers hands! In a nutshell, the new consumer is now a major partner in your marketing campaign – or at least they should be.

– Big Strad

Where Do We Go Now (Part 3)

Monday, June 8th, 2009

From time to time it is beneficial for me to step back from the day to day rat race and ask myself why I do things that I do the way that I do them. I try to be honest with myself and more often than not the real answer is simply I do things a certain way because I have always done them that way. But times have changed and no one is exempt from having to re-invent themselves – not even the mammoth General Motors. For some time now I have been asking the same question of the music biz, and sure enough I always get the exact same answer – things have always been done a certain way. So step back one more time with me and let’s first acknowledge that people do still want to hear music – they just don’t want to buy it anymore. With this in mind I began thinking about what I would do if I were in charge of running a major label. I am going to make this the last of my Where Do We Go Now series. As always, remember that this is just my 2 cents. Here goes.

The Big Strad steps would be two-fold.

    Step 1 – Re-invent

  • I would make my entire staff realize that we are going to re-invent the wheel and come up with a new business model. This means work folks – lots of it. And anybody that is not down for the work of a company-wide do-over can exit stage left. For those that are up to the challenge, the resulting compensation and org chart on the other side would be directly proportional to the size of your contribution and its importance to the new business model. So, interns may end up Directors – and vice versa. You get the point.
    Step 2 – Do what we do best and let the rest go

  • We begin making money by doing what we do best and let partners handle what we used to do best. This is one of the most fundamental of business rules, but it is one the record labels seem to be ignoring. I believe it is being ignored because record label executives are still thinking in terms of what record labels used to do best – which was sell music. It is pretty common knowledge that producing the type of sales numbers that used to be possible is no longer a reality for anyone in the digital age. Ok, so what do major labels do best now? They market music. The trick is to make money marketing music, instead of selling it. This is a paradigm shift in the music biz, but it means in the new business model record labels will transform into music marketing companies (MMC)!

This is synergy at its best.

For the most part, music is tough to sell in today’s market. But products still sell; clothing, toiletries, electronics, beverages, food, cars, etc. are all still viewed by the consumer as items that must be purchased, after all it is not yet possible to download a car with today’s technology. All of the companies that sell real-world products (RWPC) also have marketing budgets for them, but they are usually geared towards advertisements for TV, radio, etc. The key for the success of an MMC is that they have to still own the exclusive rights to market an artist, but they must give up any musical rights. But giving up these rights can be leveraged in finding a suitable RWPC with a marketing budget. Endorsements are not new to the RWPC, but having exclusivity to the artists’ brand name is! The popularity of the artist and / or their music will be they key to the success of the endorsement. So who is better at making artists popular? The MMC! This is synergy at its best.

…there is yet another partner in the new business model that can win – the artist!

The MMC can also use their A&R and scouting skills to help find hot artists for the RWPC to endorse and thus continue to solidify their exclusivity in marketing music for said artist. This gives the MMC a new revenue stream (marketing), foregoing an old one (music sales). But I always preach that a win/win solution for all parties is the key to a successfull partnership. So who else wins in this partnership. The RWPC can win as well as they can fully sponsor artist tours, and even give away music based on the purchase of their product, etc. And there is yet another partner in the new business model that can win – the artist! That’s right, the artist. The RWPC already have marketing budgets and that is where the artist will now get paid from. So the artist will now get paid based on the RWPC marketing budget, not based on sales of music from a record label. So an artist with a hot endorsement deal can still be a huge star, and can make big money without having to sell a single unit!

Is this is thinking out of the box? Hell yes! But how else are you going to succeed in today’s market? Is this going to take some work? Hell yes! I mentioned that in Step number 1. What it is going to take is re-invention (this is key) from the top down. There will have to be buy in from the shareholders, to the executives all the way to the mail clerk. So please soak my idea and let me know what you think. And if any of the major labels want to put Big Strad in a VP slot and give my MMC re-invention a try – get at me. And if you do it yourselves without me, the world will always point to my blog and know it was my idea that you stole! LOL

– Big Strad

Where Do We Go Now (Part 2)

Saturday, May 9th, 2009

Back in the day I used to work out of studios across the country with mixing boards that had 64-128 channels (or more), 2″ reel-to-reel tape decks and cost upwards of $200 an hour. Today, technology has allowed me to create a comparable sound using a PC or Mac in any facility; small studio, house, on location with laptop – anywhere. And some of the programs are so simple to use that even the novice musician can knock out beats that compete with the big boys – though most of the big boys will disagree with me on this point. My bad. And once the song is complete it can be uploaded on blogs, social sites, tweets, etc. This means that a song can go from idea, to reality, to the world within minutes! Powerful. Damn Powerful.

Middle Class Entertainers

I am no economics wiz, but I do understand that supply and demand is at the the root of most any business with a product or service. Programmed media outlets like radio and television are excellent at exposing only a few artists at a time. This is by design and creates a big demand on a very short list (supply) of artists. This formula generates big dollars for the major labels and the labels deserve it for the amount of investment they put into these artists. Now Newton’s third law of motion states that every action creates an equal but opposite reaction. This can actually be applied to the powerful technology mentioned above, with the reaction here being that the once carefully guarded gates of supply have been kicked wide open. The Internet has allowed everybody, their cousin, uncle, sister and best friend to upload music (and everything else) simultaneously. This creates an over abundance of supply – damn the lack of a demand for it.

If you want to succeed today, then “Aim for the edges.”

However if you have a hot song and if you can generate enough of a buzz so that Internet fans can find it amidst the background noise (i.e. all of the BS that really shouldn’t even be there in the first place), then my experience has shown that you can create an opportunity for yourself to actually book enough shows and sell enough product and merchandise to earn a decent living. And though it will most likely be on a smaller scale than the dollars that the major label artists still manage to pull down (for now at least), I am not talking about the starving artist stereotype – I am talking about what Michael Laskow (President/CEO of Taxi) describes as a new middle class of entertainer. Derek Sivers (the founder of CD Baby and now Independent Music Evangelist) had a very clever analogy to describe this as well. To summarize, Derek states that the old music business was like trying to hit a 1-inch bulls-eye on the other side of a field with an arrow. Hit it and you had a huge hit; miss it and you had absolutely nothing. Today the target is 10 feet away. You can aim for the edges, and hit something pretty easily, but the bulls-eye in the middle where you get those huge hits is gone. If you’re still aiming for the bulls-eye, there’s nothing there. All the users now have the power to explore niches out on the edges of the target. This means that it is now easier to make a decent buzz in any niche market, but damn near impossible to have the all encompassing kind of mega hits that cross all genres and niches that used to occur back in the day. His final comment on it is worth noting. If you want to succeed today, then “Aim for the edges.”

I will talk about a prediction of mine for major labels next time.

– Big Strad

Where Do We Go Now (Part 1)

Friday, May 8th, 2009

I believe the music biz will retain a few well-remembered scars even if they do heal.

Last time I touched on how the state of the music biz got from where it was (riches) to where it is (rags).  I want to touch on one idea that could help stabilize the ship somewhat – or at least make it more palatable for all involved when signing major label deals.  But I first want to caveat it with this; I believe the music biz will retain a few well-remembered scars even if they do heal. 

360 Deals

No way I am going to get out of speaking on this, so I will jump right into them as part 1 of “Where Do We Go Now”. Note: If you don’t know what 360 deals are (is that possible?) then you are probably a better candidate for actually reading my opinion on them than those that have already formed their opinions on them. For those that have already formed their opinion, please bear with me as I elaborate a bit on mine.

360 (or multiple rights) deals allow major labels to get a percentage of an artists revenue from items and services that had not previously been offered to the record label, such as merchandise sales, shows, endorsements, etc. This allows the label to insert themselves full circle (360 degrees) into a revenue stream that had previously been reserved exclusively for the artist and their management team. Just a short while ago I would have stated that 360 deals were becoming increasingly common, but with the state of the music biz and the economy, I can now pretty comfortably say that these are just about the only deals that are even being offered right now – at least in the rap game. To sell the deal the major labels have offered to shoulder some of the management responsibility and really become pseudo-managers themselves.

So with that being said, here’s the big question…

Are 360 deals good or bad?



The reason that I say this is because in my opinion (that’s why I’m blogging) I believe that any legal contract is always give and take and the key is to try and negotiate a win/win for both sides. Those are the good contracts. If one side is not happy then the contract usually ends up breached anyway and everyone loses. Those are the bad contracts. But even in the case of a 360 deal, IF the deal is written fairly (i.e. is a win/win for both parties) then it could actually be good! If this weren’t a web page here is where I would probably have to duck, but hear me out first because I have a suggestion for making 360 deals fair!

BigStrad 360 “bubble” deal… basically says “I will take multiple jobs to help pay off my loan quicker, but once I get it paid it off stop asking me for a payment – until I take out another loan”!

The major label and the artist bear a certain amount of risk in entering into a contract with one another. At a high level, the artist is risking their youth, career, dreams, etc, and the labels are parting with nice sums of cash in the hopes that they can not just make a profit, but just recoup their investment. With this in mind, I propose the BigStrad 360 “bubble” deal. It is based on give and take on both sides of the contract as follows:

    Label’s Skin in the Game

  • Labels should be allowed to recoup their monetary investments by tapping into all of an artists revenue streams (merchandise sales, shows, endorsements, etc) up until the point of they have recouped their investment. This is they key. At that point the “bubble” bursts and it reverts back to a traditional label deal with the label profiting from music sales only.
    Artist’s Skin in the Game

  • If a label will only be issuing a monetary investment then it is up to the artist and their management team to perform all management related tasks and the label should not have to perform any tasks such as seeking additional revenue streams – however it really is in the labels best interest to do so as they will recoup even faster! That is where the win/win comes in.

This deal should be fluid enough to create or burst another “bubble” and move back and forth based on whether an artist is in the red or the black. This fluid type of 360 structure is probably a lawyers worst nightmare, but could allow the label to recoup their investment faster (and much more safely) while still remaining a fair “bubble” clause which is in the best interest for the long-term career plan of the artist – especially the artists that ARE in the black and deserve it. Am I a lawyer and have I worked out all the kinks? No and No. However, common sense has to come into play at some point. This type of deal basically says “I will take multiple jobs to help pay off my loan quicker, but once I get it paid it off stop asking me for a payment – until I take out another loan”!

Next time I will take a look at a new middle class of entertainer.

– Big Strad

Making a Million Dollars in the Music Biz

Sunday, April 26th, 2009

I once read that making a million dollars in the music biz is simple
…spend 2 million.

That about sums it up these days – even for the major labels. But it wasn’t always that way. So what happened? There is no single answer, but the one you hear most often puts the blame on illegal downloads and piracy. OK, I agree that it contributes to the problem, but it is really the side effect of the root cause – which is that we have a lot more options nowadays than just music to spend our hard earned dollar on. This blog is gonna be a little longer than I am really comfortable with, but I think it’s important that we take a look back to see where we came from so we can get a bearing on how we got here.

Back in the day, music was a big part of the entertainment retail “pie”. If you wanted music, you walked or drove to a store like Sound Warehouse, Sam Goody, Peaches, etc, browsed the bins recalling what you have heard on the radio or video shows all week and you bought it. Major labels had the only songs on the radio (and for the most part still do) and they had the only product in the store so simple math shows that they were the only ones making money – and lots of it. The only competition the major labels had was themselves! It was an economic supply and demand nirvana.

Nowadays, however not only do we have music, we also have a zillion other things to entertain ourselves in the digital age which has caused the entertainment retail “pie” to be divided immensely. Video games, computers, camcorders, cell phones, you name it, it exists. You can download an MP3 (legally or otherwise), but you can’t download Grand Theft Auto (yet), so when a teenager has x amount of dollars, they can:

A) Legitimately purchase some music off of iTunes and wait until they save more dollars for the video game. We know how patient teens are right?

…or for the same money

B) Purchase the video game and illegally download the music off of Limewire for free. No teen would do this though right?

Well the result is that option B usually wins. Not fair? OK. Not right? OK. But it’s reality and its here to stay. The supply and demand nirvana that the major labels enjoyed – is gone. It’s done. Over. Like I said earlier it’s just a side effect because we have so many options today. And let’s not just blame the loss of revenue solely on peer to peer sites with illegal content to download, let me also point out that there is a plethora of HOT music and videos out there that are legitimate and FREE on online sites like YouTube and MySpace. So maybe buy the iPod and download some legitimate free music. What this means is that the major labels not only compete with themselves, but the entire world – and some of their competition is giving away music for free.

Record a hot song at home ($0), get your homies to video a hot dance ($0), upload to YouTube ($0), total value (priceless)!

Let’s dig a little deeper into these online sites and what makes them tick. Bear in mind that radio and the big music video channels used to be the only game in town and if you were not being played on them, then you were an unknown – a nobody. But YouTube and other online sites are becoming commonly accepted as the new TV because today’s technology has produced a generation of computer savvy users that like the control of seeing and hearing what they want – when they want it. They can entertain themselves online for hours where only radio or TV used to have that kind of captive capability. They find what they want, they download it to their iPod, they take it with them. This means that if you can generate a buzz online, you can be found by users – worldwide. In fact, I have personally seen artists that are YouTube Celebrities (should I trademark that LOL) that have better face recognition in markets than artists getting major spins on the radio in the same markets! So how much does it cost to be a YouTube Celebrity? Record a hot song at home ($0), get your homies to video a hot dance ($0), upload to YouTube ($0), total value (priceless)!

Yeah, we have many things that we can blame the current state of the music biz on, but what we need to do is get cracking on where we go from here. Check my next blog where I will present some of my thoughts on where we may be heading, but bear in mind that nobody can predict the future of the music biz and if somebody says they can – watch your wallet and run away cause in the words of the late great Biggie Smalls – they trying to stick you for ya paper.

– Big Strad