Product Life Cycle: Music and Radio

"Idol" Proves Diamonds Are Forever

2008-05-28T21:50:00.004-04:00

Two weeks ago, Neil Diamond released an album chock-full of new songs, sure to please any respectable soccer mom. What's notable about this album, however, is that it was Diamond's first to ever hit Number One on the Billboard 200.

That's right, despite Diamond's slew of catchy hits ranging from "Cherry, Cherry" to the ubiquitous "Sweet Caroline," his most recent effort, cutely titled "Home After Dark," has been his only album to reach Number One.

One might ask, how--and why--is this possible? Could it be Diamond's Secret MySpace concert in New York the day before his album hit stores? Could it be the simple fact that it, depressingly, takes only around 100,000 in first-week sales to shoot today's artists to number one? Or, could it possibly be Diamond's appearance on "American Idol" the week "Home After Dark" was released?

The cause was likely a combination of all of these factors, the first being more related to Diamond's strong social networking efforts in recent years than to some Secret Show. However, the "American Idol" appearance says the most about the nature of today's music industry.

Though "Idol" is on a steady decline in ratings, the show is still a powerhouse for Diamond's particular demographic. His decades crooning "Shiloh" to sold-out arenas could never compare to the exposure he received as a "mentor" on America's favorite pseudo-reality show, which, incidentally, awards the winner with a recording contract. While not all of the American Idols have found extraordinary success in the music industry, most have been met with lucrative advertising deals, Broadway success, and/or movie offers.

"Idol" remains a force to be reckoned with, and Diamond's recent success illustrates that better than two competing guys named David (or some weirdo named Clay) ever could. Whatever one may think of the show, it is clear that those who watch it are consumers in the truest sense of the word, and this means a lot to a suffering industry like that of music.

A show set up to reflect the free voting ideals of Democracy has become an unintended example of unabashed Capitalism. Though Diamond may much rather be forever in blue jeans, "Idol" makes it clear that he and other stars who can afford the exposure have an Armani opportunity.

In the land of the free, we choose reality t.v. It's a sad realization for those who had started thinking that good music--not just advertised music--was winning the war.

A Testament to Adaptation

2008-02-25T23:47:00.005-05:00

Most people outside the Broadway realm haven't heard of Sh-K-Boom Records. Despite being one of the most progressively powerful forces in theater-oriented music today, the music industry has largely ignored the rising independent label. Perhaps Sh-K-Boom Records isn't exactly the cool kind of indie that college kids preach at the local radio station, but it is certainly a business to note.

Sh-K-Boom founder Kurt Deutsch found a business opportunity in his wife, noted Broadway actress Sherie Rene Scott.

According to Deutsch's interview with Justin Goldberg in Golberg's book Handbook for Hell: The Ultimate Survival Guide to the New Music Industry, in 2000, Rene Scott was seeking an outlet to record her own album beyond the Broadway stage. Like many artists, she found few record labels willing to take on her project.

In a stroke of adaptation and innovation, Deutsch made the decision to start Sh-K-Boom in 2000 with the help and direction of his wife, and a small indie label was born. The first album the label released was Rene Scott's album of cover songs, "Men I've Had."

The label has gone on to release albums from some of Broadway's biggest names, and has even expanded to releasing soundtracks to shows through the recent Ghostlight Records. Additionally, the label has produced more than 50 live concerts (according to Wikipedia) in its concert series. Where Rene Scott had hit a roadblock, she and her husband found an entrepreneurial way around it.

While Sh-K-Boom may never make the enormous impact on the world that Koch or Sub Pop have, it stands as an example of the evolving music industry. Even when viewed through opera glasses from a balcony seat at the Minskoff, facets of the music industry are now welcoming those who have the passion and drive to start their own businesses.

Most music conferences for the past several years seem to have been instructional toolkits to finding a niche and starting from scratch within it. Whether that means creating a new record label or forming a kickass website for up-and-coming musicians, opportunities abound for those with the entrepreneurial edge to look for them.

Who will be the next Deutsch?

Media Job Slump: Bad News for Radio

2008-02-24T15:43:00.005-05:00

Ad Age reports that media jobs have been drastically cut in the past year, while marketing career opportunities continue to expand. This creates a double-edged sword for media directly linked to music, such as radio.

Radio budgets continue to shrink with the advent of new technologies and easy-to-create user playlists. Those who are forced out of marketing and promotions positions at radio may find themselves working within the same music industry (at major labels) but--through tradition--forced to promote content to the shrinking medium they just left.

This strange irony could leave yet another hole through which major labels will hemmorhage money if they are not careful, and it could force qualified, knowledgeable, and innovative music industry professionals into jobs in other, unrelated industries. However, if major labels hire these professionals less as monkeys and more as minds for marketing, the opportunities provided to both parties could help all involved.

In other words, major labels should not hire laid-off marketers from radio only to have them blindly promote records back to radio. These professionals should be hired as innovative minds to discover new ways of promoting artists.

An unfortunate prospect for radio insiders who are not in marketing, promotions, or sales could be the obsolete base of knowledge many have spent years perfecting. Our struggling economy and the changes within the music industry will slowly create a gap between radio professionals and the positions which demand radio skills. To approach it simply, what happens to the 10-year veteran of the victrola repair business when vinyl becomes all but obsolete?

For those with radio careers on the brink of combustion, many may have to find other avenues and skill sets, and unfortunately for the music industry (which could use experienced, qualified minds at its helm), these professionals will likely have to find opportunities online or in other areas of entertainment.

While radio in general may be reaching a standstill, the importance of the workers at its core must not be overlooked in the job force, particularly at major record labels. Because of radio's struggle to survive as a medium, its professionals have been forced to adapt through innovative marketing, promotions, and sales efforts.

Those qualities are exactly what the record industry needs. Major labels must also remember, however, that those with pasts in radio also understand the progressively unnecessary nature of radio to music, so to force them into positions dictated by the success or failure of their radio promotion could be a death sentence to both the worker and the label.

Google's AdWords Video Ads: A New Frontier

2008-02-16T22:33:00.006-05:00

Google has finally unveiled its first video ads on its search engine, through the AdWords interface. Though some have worried that this will affect the engine's effectiveness (making it slower to load), according to searchengineland.com, this surprisingly didn't happen during Google's testing of the advertising.

What does this mean for the ever-suffering music industry? For one thing, it is a marketing goldmine for musicians, from the up-and-coming to the established. AdWords allows users to set daily marketing budgets, so even those with limited finances can afford to do some sponsored search engine marketing (such has been the case for years). Additionally, AdWords clients only pay per click, meaning that every payment is based on someone who does a Google search showing a true interest in the ad they are served. Translation: you only pay if someone notices your ad and cares enough to click on it.

Allowing clients to create video ads in AdWords that show up when users search for content related to the artist, genre, etc. of the appropriate party will give musicians a chance to showcase their music videos. For the past several years, there have been few portals in which music videos actually make sense, since MTV now almost exclusively runs reality television. MySpace and YouTube are two arguable exceptions, but both have served to engage fans rather than spark interest in an artist. Google's new video ads could be a breakthrough mechanism for artists on the brink who could use an extra push.

The unfortunate aspect of this development is, as has been the case for the past several years, the only parties capable of affording truly effective search engine marketing campaigns are funded by major record labels. Few indie artists have the money or manpower to construct largely-targeted search marketing campaigns.

However, as music itself becomes less a product and more a promotional tool, a larger percentage of the marketing budgets for indie records may need to be devoted to unconventional marketing (to sell digital records) rather than traditional marketing (to sell hard copies). It's a necessary exchange.

In other words, for indie bands, it may be time to forgo the fliers and posters an make the move to Google. It was bound to happen someday: Google's conquering the world.

Country's On the Rise

2007-10-03T15:59:00.000-04:00

Rumor has it that the Rascal Flatts are taking the top Billboard slot this week, with just over half a million albums (!!!) sold. The band will knock Reba out of her short-lived glory at number one.

If Billboard's Top 200 is starting to look like a country chart to you, there is good reason. Country music is taking the United States by storm, making Nashville the "it" place for emerging artists and aspiring executives. With a typically charming demeanor and a genius radio promotion strategy, Nashville is giving New York and L.A. more competition than ever.

Nashville has always had a disconnected way of doing business when it came to music. In an industry where songwriting is king (a songwriter will earn about 16% of a song's revenue while the singer earns around 1%), musicians are making even more of an effort to write their own music. That is, everywhere but Nashville.

Nashville typically operates in a way almost exactly opposite to the direction of the new industry; that is, there are songwriters and there are singers, and the two are not usually the same person. NashvilleConnection.com, for example, has a link on the front page to "Nashville Songwriters." This is a stark contrast to the rock and pop worlds. In fact, country songwriters will often join forces arguably more than do artists, blending their talents and splitting the profits.

While most music elitists would argue that this philosophy disingenuous or inauthentic, it actually offers a different kind of authenticity: Everyone does what they do best and love the most. The lyricist writes lyrics that stir the soul and connect to the everyman, someone else writes a melody that pulls the heartstrings, a producer contributes to the entirety of the product, and the singer rips a lung with spirited belts and a southern twang. Just because the message comes from multiple sources doesn't lower its impact; in fact, some would argue it enhances it.

Even hip hop, another popular genre right now, uses a similar system. Most artists put their lyrics to producer-created beats, which, it could be said, usually makes for a better result than the artist himself could create. Not everyone is skilled in the latest technology, and not everyone (with relation to country music) can write lyrics that are specific yet identifiable. Did someone say "Kelly Clarkson"?

Welcome, Nashville. Make yourself at home.

RIAA Sues More College Kids

2007-09-30T15:25:00.000-04:00

The record industry continues to fight the inevitable. The Recording Industry Association of America issued another round of pre-litigation settlement letters to over 20 universities all over the country on September 20. These letters offer low-rate settlements to specific college students who have been found illegally downloading music and movies on campus. If the students decide not to settle, the RIAA will sue them in court.

According to the RIAA, more than half of college students participate in illegal downloading. For any logical person, this indicates that the piracy problem is not going away, and is unreasonable to realistically fight. To sue every person who has or is illegally downloading would be not only an impossible legal nightmare for the RIAA, but a financial devastation to the college students who are doing the downloading (and going to the concerts...).

I asked a radio promoter for a large label a few weeks ago how the industry was planning to deal with the piracy problem. His reply? "Nobody likes to be stolen from. And piracy doesn't hurt the artist as much as it hurts the labels." Okay, fair enough. Piracy is wrong and illegal. But that is not stopping anyone from doing it. It's time for a new approach and different sources of revenue. (Hence the birth of the so-called 360 deal, which takes revenue from other aspects of an artist's career.)

The other part of the promoter's reply that struck me was that artists are not being as negatively affected by the piracy issue as are the labels. Well, this makes sense, but it doesn't indicate such a blow to the industry as the labels are trying to spin. Basically, this statement translates to "major labels are obsolete, and we don't know how to fight that other than through lawsuits." Professional-quality albums can be made for under 5K these days, and the Internet has leveled the playing field quite a bit in terms of promotion. Artists don't sign to a major label today to be developed or to record their album. Artists sign on because of the promotion money involved and because of the promise of fame.

Indie labels still cannot compete with the big dollars major labels offer for promotion, but this is evolving as well. And without worrying so much about record sales, independent artists are able to focus on touring, merchandise, movie placement, and other revenue streams. Major labels just simply aren't necessary unless you want to be mondo-famous, and even that is slowly changing.

As the RIAA continues to fight the inevitable, we can only watch in awe as the denial grows and the lack of options increases. Good luck, guys.

An Ode to Excellent Music and Smart Marketing

2007-09-28T13:57:00.000-04:00

What a month for Billboard and SoundScan! Reba McEntire just knocked Kanye West from the top sales slot this week, going to show that first-week gimmicks truly only pay off in the--get this--first week of sales. The country superstar is also getting a lot more radio airplay than both Kanye and 50 Cent, something that country artists have traditionally been great at obtaining.

While Kanye and 50 still remain second and third on Billboard this week, they are joined by a promising, if altogether strange, line-up: Barry Manilow (releasing yet another compilation of old songs) and country artist Kenny Chesney. Even worse news for Kanye and 50: both of their albums comparitively tanked against last week's sales (both dropped over 75%). It's not to say they aren't pulling in far more money than most artists today, but it doesn't necessarily spell a long future for these albums. Time will tell with that.

So how, exactly, did Reba's "Reba Duets" manage to slide into the number one slot with 301,000 copies sold (according to Billboard.com)? Well, there are a couple of factors at play, including the ol' underdog that is creative marketing.

Reba's team intelligently crafted an album for the superstar that included contributions from other famous artists of several genres, including country stars Faith Hill, the Rascal Flatts, other chart-topper Kenny Chesney, and then, perhaps the best guarantees of outside-format airplay, Justin Timberlake and Kelly Clarkson. Exploiting these duets to their fullest has helped Reba on radio and in other forms of marketing. Even Nickelback, a band few expected to hear from again, climbed the charts by creating a music video starring roughly eight trillion celebrities. Reba and Nickelback capitalized on something artists have known about for a long time: as the Beatles put it, "I get by on a little help from my friends."

The duets also created a fast catalog for Reba and for MCA Nashville. As the contributing stars fluctuate in their respective levels of fame, Reba will sell more copies of "Reba Duets." It's simply a smart promotional strategy.

The other main factor in Reba's success is her history. Reba McEntire has never been an artist about youth or great looks or stupid publicity stunts. By and large, Reba's fame has been almost exclusively about the quality of her music. While country may not be everyone's cup of tea, McEntire's influence on the genre (and others) cannot be denied. Manilow is the same way, to the point that he can now release half-assed versions of infomercial-friendly "Hits of the Seventies" compilations and still hit #3 on the charts.

Marketing and promotion play a large part in album sales, but the fact remains that good music will usually rise to the top (assuming, rather broadly, that it is on a major label that financially supports it). And depending on who likes the songs, that may be a good thing for Kanye and 50.

The albums without good songs might peak for a moment, but artistically lacking albums (Sean Kingston?) rarely have the legs to climb the charts for more than a few weeks. But hey, that's what gimmicks are for.

Self-Destruction Is a Great Career Move

2007-09-26T18:30:00.000-04:00

Self-destructive behavior among rock stars is no new phenomenon. Traditionally, drug and drinking habits have been as associated with rock ‘n roll as baseball is with American sports. Even old stars from other genres have crept into the heroin-laced, alluring world of self-destruction, but in no time period has this been more prevalent than today. The glamor associated with slow suicide has not waned, but the increasing presence of it in everyone from Britney Spears to Amy Winehouse (to even celebutantes like Paris Hilton) begs the simple question: what does this mean?

Let’s forget for a moment that killing yourself through behavior stemming from depression (like excessive partying) is a bad health move. Pop writer Chuck Klosterman reasonably argues in several books that death in and of itself is, generally speaking, a fantastic career move for musicians. While Britney may not be currently be viewed in the best light, she has arguably never been the subject of more headlines.

Would Amy Winehouse have sold as many records as she did (of her phenomenal sophomore album “Back to Black”) had she not single-handedly destroyed her health and, arguably, her life (not to mention refusing rehab – did someone say “promo tie-in”)? It’s really hard to say. Winehouse’s talent is undeniable, but plenty of other albums with heavy promotion and serious talent sit unnoticed on the shelves today. “Back to Black” remains in Billboard's top 20 in its 27th week; almost unheard-of for a breakout artist. While Amy's health seems to be improving, there is still a strong chance that she could propel her career to its greatest heights while killing herself a bit more each day. How depressing.

So, health choice aside, is it a good or a bad career move to party until your kidneys die and your heart gives out? There are certainly benefits to destroying your life if you are a musician, the foremost being that it’s difficult to go wrong. If you are seen as a living, breathing mess with endless press, you will likely either (a) eventually die from it, creating a status of martyrdom, or (b) get the help you so obviously need, eliciting pity, empathy, sympathy, and praise from most of the country (or world, depending on how well you’ve spun the campaign).

So will it only be a matter of time before record companies start promoting up-and-coming stars and starlets as being the next Elvis or Janis Joplin? “Half the talent, twice the looks and body, equal health issues!”

It will be a scary day if and when that happens, and it’s debatable whether companies are already using today’s problem children to forward their own profit goals. The truth is, labels are unlikely to fully exploit a star’s issues unless those issues arise after being dormant, as with Winehouse. Labels won't flock to sign an artist who is obviously riddled with problems, but if those issues arise later, you can be sure a company will use them to its advantage.

If you run across a hot, moderately talented, young starlet with endless potential and drive but a penchant for the bottle, send them Virgin’s (or Columbia's, or Def Jam's, or Capitol's...) way. They’ll work around it. Hell, they'll work with it. At what personal sacrifice will the next big success come?

Kanye v. 50: Winners, for Now

2007-09-25T23:07:00.000-04:00

Bryan Calhoun, owner of Label Management Systems, announced to an audience at the Atlantis Music Conference last weekend that Kanye West's recent album ("Graduation," for those out of the loop) had sold more first-week copies than any album in the past couple of years. In a music economy that is becoming ever-more based around the hit single, Kanye managed to somehow secure almost a million sales of his full-length album in one week. His rival, 50 Cent, also obliterated previously-held sales figures with his album, "Curtis."

Does this mean that the major label system is taking a much-needed turn for the profitable? Hardly. These moguls' successes are testaments to the marketing genius that still exists in the minds of some of the industry's most creative (and underrated) individuals.

Everyone heard the rumors. Perez Hilton posted to-the-moment updates on the scandal and MTV had coverage around the clock. 50 Cent and Kanye West were engaged in a power war, stemming from the fact that Kanye had allegedly chosen to release his new album on the same day that 50 was releasing his. (Convenient, eh?) This highly publicized battle of wills culminated in 50 threatening his retirement from music if his album was outperformed by Kanye's in first-week sales.

Insults were thrown both ways and accusations were made all over MTV, radio, and the Internet. Fans began lining up to support their chosen artist, rallying around he who was deemed most deserving of fame. Kanye even pitched a fit at the MTV VMAs, potentially to garner even more publicity for the presumably staged campaign.

The hip-hop-king side show ended on September 11th, a day filled with such frantic nationwide CD sales that the battle almost (depressingly) overshadowed the memory of the date's horrific events. Even stores (rack jobbers?) displayed the artists' CDs right next to each other; each WalMart and Borders pitting the artists against each other, even if only through plastic encasing. 50 loomed ominously at his supporters, while Kanye's cartoonish and colorful cover motivated his fans to a purchase.

Publicity stunts like this are often attempted but rarely carried through to such a successful degree. Kudos to the major label marketers who came up with the admittedly brilliant plan.

Creativity is an asset to the music industry; there is no doubt of this (though it is often undervalued by executives.) However, it is important to keep in mind that it is still becoming progressively more difficult to convince the buying public to purchase CDs, especially ones with little value beyond their singles.

Even Kanye' first-week sales would not have been that dramatic when compared with ten years ago, before the downloading and piracy phenomena. As the music industry continues to evolve toward a more web-based environment with a more (literally) single-minded market, stunts like the Kanye-50 battle will produce less success. The past decade has proven young demographics to be nothing if not savvy.

Here's to hoping that some future creative mind will be able to fix the major label system as an entity. While stunts are great for artists in the short-term, we must remember that such an action is escaping the noose instead of the death sentence.

CC to Buy Clear Channel - Good and Bad

2007-09-25T13:52:00.000-04:00

We all know it's happening. The record industry is fighting to survive in an industry rife with turmoil, and consolidation is often the only option for smaller labels. There are now only four major label conglomerates: EMI, Sony/BMG, Universal, and Warner Music Group. If this doesn't seem frightening to you, it should. But more on that in future posts.

Any music business-major college freshman can see the oncoming train of the label consolidation that has quickly become more prevalent. But what of the radio mergers that directly affect the listening public who, by law, should have a say in what gets aired?

The shareholders of Clear Channel Communications, the largest single ownership entity of radio stations in the nation, approved a merger with CC Media Holdings today. Pending federal approval, CC ("a corporation formed by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P," according to a press release) will buy out a good chunk of Clear Channel, sans its television stations and radio stations outside of the top 100 markets. This leaves room for Clear Channel to again claim its private business status.

Of course, shareholders are thrilled. They have the option of trading their Clear Channel stock in for stock in the new company or selling each share for around $39 a pop. Not exactly chump change, if you're a serious investor. (To compare, WalMart's stock is currently at $43.)

To those wary of the media group that is already criticized for its alleged cheapness, its greed, and its seeming lack of care for whatever it happens to sell (radio stations are treated as if they were tennis shoes or fish tanks), this is fantastic news, generally speaking. Splitting up Clear Channel's monster influence in the industry should allegedly mean more of a chance for music artists and the ease of one company's stranglehold on the industry.

While this merger (and others) mean less radio consolidation (hurray!), it could also instill fear into the hearts of any current Clear Channel station in a remotely major market. As privatization increases, it is great news that Clear Channel is no longer necessarily the biggest fish in the ocean, but it will mean that every major market in the United States could have nearly identical programming and no shareholders to blow the proverbial whistle. Pumped-in programming is a progressively frightening thought, and something that Clear Channel critics have long lamented.

Even the smaller and medium radio markets have reason to worry. All the television stations that Clear Channel owns and 161 of its smaller-market radio stations have already been tentatively sold to Providence Equity Partners (according to Wikipedia). Now doesn't that just sound like a company that loves music and radio? In addition to being an investor in NexTag and Education Management Corporation (among others), PEP invests in Warner Music Group. Conflict of interest, anyone?

Ownership solely concerned with profit has typically not laid a true path for quality art, and this was no more evident than When Clear Channel Ruled the World. Privatizing won't quell that problem.

These private companies have more power over what goes on the airwaves than did Clear Channel, since the old company also had shareholders and the government to answer to. Now that the market is more split with the mergers, the FCC will likely turn its watchful eye more toward Cumulus, perhaps freeing the new owners of Clear Channel stations to exercise more power. Then again, Clear Channel was the company that screwed up in a major way with a payola scam, so the FCC may stay stringent, even after privatization. It's hard to tell right now.

For those who thought it wasn't possible for Clear Channel to become more corporate and less concerned for the services it provides (blanket syndication, anyone?), it looks like you were wrong. In major markets, get ready for more money lining investors' pockets and more "De-li-laaah" on every major-market AC station in the nation (or clones of the idea). Hey, if you can produce a show once (or buy it cheaply from someone), why not just pump it into every station you own in every major market in America? Who needs unique programming? Who needs live DJs? Who cares about local programs? Who needs a STAFF?

The Clear Channel/CC Media Holdings merger can be positive, but should also serve as a warning as to the privatization of both the radio and music industries (and sadly, the two are becoming progressively separate). As long as the important people are profiting from what's happening, nobody's going stop crappy programming, quick format flips, or station downsizing. What happened to airwaves being "public domain?" Or do we no longer get a say in our own destinies?

Here's a tip: if you think a radio station's programming sucks, or you're tired of hearing the same canned material every day, switch over to another station. Companies wouldn't broadcast it it if it wasn't profitable. If we all make the effort to support local programming, it will come through in the ratings. Now where's my PeopleMeter?