Re: Re-NY Times/Private Equity/Music

I hope I’m not the only person to tell you that the Applebee’s “2 for $25” offer was for less than a month (they’ve run it previously though) and didn’t include drinks, tip or taxes.

Ben Blackwell

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Re: Re-NY Times/Private Equity/Music

Bob, people can’t even write logical analogies:

Going to Applebees is more like seeing the local 80s music tribute band on NYE at the local club.

Still gonna have a ticket fee!

Lol. Applebees for date night…

Vial

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Re: Re-NY Times/Private Equity/Music

Tom Newson! Ah, this now make so much more sense. If he thinks 8 meals at Applebee’s is somehow equivalent to a quality show by an artist you admire, our values don’t align. Have you been to an Applebee’s lately? The last hanger-on of the late 80s/90s chain restaurants where no one questions the quality, just the bang for your buck. My last Applebee’s experience was not by choice and immediately confirmed my reluctance in even the consideration of it as an option. (large group, offered carry out). Gross. In the words of Billy Porter, “No shade just facts.”

But this isn’t about Applebees. My partner and I just saw Jonathan Richman Saturday night at The Basement East in Nashville. All in the tickets (for 2) were under $60 total. On our way out we bought two tickets to see Donny Benet for exactly $50 total. On our way home we commented on how valuable the concert and our time with Jonathan was- $60 is a steal! Completely incomparable to whatever date night marketing Applebee’s is doing. Experiencing live music by an interesting artist with other people who are digging it just as much is an emotional experience. We would have paid double and still felt like we got a deal. We eagerly spent $100 (for 2 tickets) to see Future Islands this summer at the Brooklyn Bowl. Samuel T. Herring on stage is memorizing in a way I’ve yet to experience from another artist.

Cheers,
Sarah Sylvester
Nashville, TN

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Re: Re-NY Times/Private Equity/Music

This whole article is contradicted by the data. A simple look in Luminate (the old Soundscan) tells a different story. New music is not cannibalized by old music (I selfishly wish it were the case) and the only reason that music has become “investable” is that financial sponsors can make sense of it, i.e. consumption data is a bunch of rows and numbers that can be put into an Excel spreadsheet.

Finally, as much as we all like to take credit for being marketing geniuses who “revive” catalogs, I think that our real effort is to stem the inevitable decline that comes from generational change and the fragmentation of the audience into smaller and smaller niches.

Best,

Olivier Chastan

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Re: Re-NY Times/Private Equity/Music

Thanks for the post on that private equity editorial. Your reaction was the same as mine.  I even emailed Marc Hogan directly to refute a lot of what he wrote, making some of the same points you did.

 

There was another piece in the Times Editorial Section late last year about how Spotify is going to crater the book publishing business, and it used music as an example of artist decimation.  I wrote that author as well about her obvious lack of knowledge about how streaming and royalties work.

 

The thing that bugs me the most about these pieces is they either don’t understand or don’t want to reveal how royalties work for streaming; and they always conflate master recording royalties and publishing royalties. Inevitably, all these pieces cite some artist or songwriter complaining about how they can’t make a living in the streaming era.  As you pointed out, when you actually do a cursory investigation into who these creatives are, you see that the artists many times aren’t even indie popular, and the writers are in these camps writing songs with five to 10 other people.

 

The other thing that frustrates me is the numbers they throw out in these  pieces.  They always cite “1 million streams” as some sort huge number, when in reality it’s not much. They also always write about how one percent or less than one percent of tracks or artists reach the million stream threshold or whatever big-seeming number they use.  What they fail to mention is that 1 percent is a big number.  It equates to 400K+ tracks getting at least 1 million streams in just a calendar year and more than 60,000 artists being in the group of artists that get 90% of the royalties on Spotify.

 

In the 90s, were there even 600 artists in the top tier of royalty earners?   I mean, Chartmetric tracks 9.7 million artists!  How many of those can these pundits legitimately expect to earn a living from music, let alone streaming?

 

My only gripe with streaming royalties is that they are unfair to publishers and songwriters from a percentage share standpoint, but as you know, that has nothing to do with what Spotify or Apple Music want and everything to do with how the rate splits were negotiated between the majors and streaming services at the beginning.

 

It may be too much to ask, but it would be great if these mainstream publications would champion journalists and opinion columnists who could educate the public, creatives, and lawmakers on how this stuff really works so real change could be made if the involved parties feel they’re getting screwed.

 

Seth Keller
SKM ARTISTS

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From: John Brodey

Subject: Re: Eric Carmen (& Karl Wallinger)

Again my favorite mortality quotes are: ‘Everybody knows they’re goiing to die,, they just don’t believe it.’

And, ‘Every hundred years, all new people’.

I’m the last year of the Greatest Generation (’45, pre boomer, how is that possible). I’ve been lucky so far. Can you count the number of times in your life where you could have easily died? I’ll bet there were a few on a run or two. Sonny Bono wasn’t so lucky.

We are pretty much like salmon, fighting the perilous journey to oblivion. I’m thankful everyday and am greatful to find numerous things everyday that bring me joy. Geffen may have his name on a few buildings but the majority of people have no idea who he is and he’s still alive. Ultimately no one will care.

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Subject: Weitzman-Winkler

It was 1965, I was a 10 year-old kid who spent summers at “sleepaway camp” inn the Poconos (Blue Mountain Camp, East Stroudsburg, PA.)

I was in bunk I-6, linked with bunk I-5. A dozen-plus kids who did everything together for eight weeks. Each bunk had a senior and a junior counselor. The senior counselor in bunk I-5 was a 20-year-old acting student from Yale University named Henry Winkler.Those 8 weeks were wonderful, and I still have vivid memories of myself and Henry bonding during the summer months. He did not return in 1966, but I did, and my senior counselor that year was a Jersey guy named Larry Gonsky. He went on to be the keyboard player in the band Looking Glass, who, with lead singer Elliot Lurie sold gazillions of singles with “Brandy (You’re A Fine Girl”.)

Back to Winkler, flash forward to 1977 or 78, and I was playing on Alice Cooper’s Hollywood Vampires softball team.We played a game against the Happy Days team, and The Fonz was pitching. I remember I was a late inning replacement, and had a chance to hit. I got in the batters box, pointed my bat towards the pitching area and said “Blue Mountain Camp, 1965!? Henry lost it! I lost it! We had a good laugh, and that was it. 

I loved following his career, and these recent years (decades) I have been immensely amused by his roles in “Arrested Development” and “Barrry.”

I miss the innocence of summer camp, believing that a 10 year-old  and a 20 year-old could bond and form a true friendship.I’m sure he didn’t have the same feelings, but almost 60 years later I love to regale the memory of my summer with pre-Fonz!

Marc Nathan

Nashville, TN

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Subject: Spotify/Streaming vs Physical Sales

Yes!  I believe it is becoming more profitable (to both me and my artists) as time passes.

The magic is in the quantity of tracks (and I only have about 2,000 tracks) and the forever singles option.

In the age of Physical, simply put, labels needed a current release (or a popular catalog release) by an artist who would sell enough to be stocked and sell thru at a store. Remember most stores stocked approx 10,000 SKUs (= competition for rack space).

Hurdle 1: if you had an album that was not stocked, it could not be sold.  It had to be special ordered (or by the end of the 90’s or a little later, bought online).  And someone REALLY had to want your album to take that next step.

Hurdle 2:  How many people loved more than 1 or 2 songs on an album? And who wanted to pay $16.98 (or 12.99 if the album was on sale) for 2 or even 3 songs?  This is why the retail “Single” was deleted as soon as the song was headed down the charts: Convert the demand for the single (= loss leader) into an album sale (=possibly profitable, TO THE LABEL/not the artist, after 100,000 or so sales).

Hurdle 3: Record store policies.  Major labels did a great job of making themselves less profitable.  They kept offering more competitive terms to the records stores (like they did with Payola at Radio) until the Record stores were getting: • 365 dating;  • unlimited return rights (side note: I got returns of LONG BOX product 20 years after the long box was discontinued!!); • Deals (discounts just to take the record that often did NOT translate to a sale price); • Usually very costly Programs (some well over $10,000 for a few weeks) for listening stations, end caps, extra stock buys, co-op advertising (that made the store a profit); • IN STORE  APPEARANCES (=very costly for the label and took a half day of band time while on tour).

Subtle Hurdle 4: This is one I changed in the industry.  Labels made it hard to impossible for a band to sell their own albums at their concert dates.  They would tie-in a record store (only if the band was big enough) to bring product from the retailer’s inventory and the retailer’s own STAFF to the venue to sell the album.  When I sold The Samples’ CDs at their concerts, my Major Label friends told me the Retailers would boycot my albums as revenge for selling at the shows.  Instead, by selling at the shows, AND LEAVING the city the next day for another city, and having a great album, MORE fans went to the stores asking for The Samples.  And retailers bought a LOT more albums.  There’s a lot more to my retail strategy that “broke” the rules and worked fabulously for another thread.  Clearly, now almost all artists sell their albums at their shows.  I’ll save the funny remnant to this day of old major policy for a voice conversation (I would not want to ruin anything for artists by it getting out somehow in writing Haha!).

Some Hurdles I wrote about in the original email and some new ones: Manufacturing (before the 2000’s films, masters, etc were all analog and expensive); Stocking; Shipping; increasingly complex warehouse management for many thousands of album titles and configurations (Album, cassette, CD); Sales teams; Wining and dining; POP; ticket buys for retailers;  returns/processing; being paid in returns of (often) unrelated albums or singles; product manufactured in excess of demand (it was really hard to know how many to manufacture.  And per unit prices went down sharply with higher manufacturing quantities, which lead often to many thousands, to over 100,000 in some cases, of unsold product destined for the cut out bin or the incinerator); And the opposite problem of running out of stock with small demand and high manufacturing costs to run small runs (this often lead to letting a title go out of print, but NOT deleting it, so it was “available’ but you could not buy it); all the overhead G&A for all of these things…

OK…

DIgital.

For digital, we don’t have to do (almost) any of those things above.

Initially…  Well, initially the Majors killed Digital.  I was talking with Geffen about digital sales in 1994 when I managed Lisa Loeb!  And the itunes store took another decade to get off the ground.

So… Initially when iTunes (and others) came about, it was a singles model that agressively forced album sales.  That was a decent start, as the labels could upload much (but not nearly all at the begging) of their catalog, including albums that were no longer selling at retail.

As labels eased up on the Album Only sales, singles started selling well, confirming that fans would rather buy the 1-2 songs they want to hear than extra album tracks.  Side note: As you and I know, those album tracks were often the long term favorites…

But digital downloads were really supplemental and still cost the fan a decent amount (especially if they were buying songs they previously bught physically).

Almost another decade to 2011 and spotify comes to America.  At first, OMG the cries of “unfair”,  “your are paying us LESS THAN A PENNY per stream?”, etc.

Simultaneously, the labels uploaded most, if not all, of their catalogs (also to Apple Music, et al.).  The obvious beauty of this was that once a title was uploaded the labels would collect money “forever”.  Yes Small amounts at first…

Now more than a decade later we have seen some interesting results:

Fans like the subscription model.  And, now, with over 200 Million paid subscribers, the payments are becoming significant.

The big shifts have been: Fans listening to individual songs & Fans exploring new (and that includes a lot of OLD) music.

Artists who were forgotten or only heard on Pandora/Radio are getting Millions of monthly listeners.  Let’s start with the real classic artists.  Bach, Beethoven, Mozart, Debussy, etc. they have 8+/- Million monthly listeners.  Their most streamed songs are in the 100-200+ million streams.  WOW!

And then there are all the artists from the 20’s to 80’s. From Billie Holiday to Bread (4 Million monthly listeners each).  The point is these 1/4 to 1/2 pennies are adding up for millions of artists who were left out of the Physical retailer world.

Even Comedy.  Remember Stephen Lynch?  He has been quietly enjoying his life for the last decade, occasionally playing some shows.  I have been sending him quite large checks.  The last 2 years payments have been consistent (within $50 of each other in some cases.  That’s pretty crazy).

I have not calculated recently, but I have seen anywhere from 1/4 to 2/3 of a penny per stream.

That took me a few days to write.  I am sure I would have more observations.  But I wanted to send this to you this year.   Hah!

Best!!

Rob Gordon