Should the music industry be worried by 2017 that we’ll have experienced a near 10% drop in the number of British teenagers? It’s long been a key demographic for music companies. We can imagine youth marketers in many businesses having kittens at the idea of such a sudden drop in teen numbers. After all, this group, as one analyst told the FT this week, is likely ‘to be most influenced by fashion trends’. Or to put it a different way, teenagers are perfect sponges for products which are new, on-trend and aggressively marketed. Those who make business plans around demographics are not going to be cheered any more by the fact that the number of young people aged 15-24 is also set to drop by five per cent over the next five years.
The music industry has long been accused of being obsessed with the 15-24
market. As an industry we seem to have an incredible urge to constantly launch new
‘products’ which are young and fresh. As a result we also have a worryingly fast churn of acts and a real problem with building acts which have any degree of longevity. This sickness is not helped much by the fact that media also seems too focused on the same age groups. Radio 1 may have a youth remit, but it also has a budget and dominance which far outweighs its demographic. Similarly, television aggressively markets music and lifestyle to young people with barely a thought for truly mainstream audiences.
Remember the 50 quid man trend which gripped the music industry a few years ago?
This was where we sought to target the people who actually spent most money on
music, a pretty sensible idea. As digital has erupted and physical declined, the importance of the teen demographic must surely be at its lowest for years – as far as recorded music buying is concerned. Teens are still powerfully important for live events, but we’d guess that they probably spend less on recorded music than at any point in recent memory. For some reason however, many record companies still seem obsessed with this demographic, even though it’s skint, fickle and usually not averse to illegal downloading.
We wish A&R decisions were made with much less thought for demographics. And
that the age of signed artists was treated with much less importance. Shouldn’t it be about great music and great songs? That’s why it’s been heartening to see the massive current success of Fyfe Dangerfield/Billy Joel. This classic has appealed across ages and touched a nerve. Similarly, teen audiences are often present in force at gigs by ‘classic’ bands. Even the teen audience is impressed by amazing songs and performance skills.
If an impending drop in the number of young people leads to less focus on youth marketing and a restoration of music-centred A&R, we’d say ours is an industry which
might actually benefit.
Monday, June 14, 2010
Friday, June 11, 2010
live is not the saviour of musicians
Imogen Heap is a rare artist who finds herself almost universally respected within the industry. Now that she’s picked up an Ivor for International Achievement, her credibility has risen even further and when she says something about the state of the industry, people tend to take her seriously. So when Heap tweeted this week that she’s finding it pretty much impossible to break even when touring, it caught a lot of people’s attention. The Guardian’s Charles Arthur picked up on it, and wrote a pretty interesting analysis of what’s Heap’s news means for perceived ‘facts’ about the new music industry model.
We’ve long been frustrated by the oft-repeated line that ‘artists need not worry about falling record sales because they can make up for the lost income from their live earnings’. This concept has always been deeply flawed for the vast majority of artists, yet it gets repeated again and again (most often by those who want to justify illegal file-sharing). The live industry as a whole may have enjoyed significant growth in recent years, but it’s a lazy and inaccurate assumption to presume that this also means that live income has risen by similar margins for artists.
It’s long been the case that artists on the first rungs of their career ladder will probably not make any significant profits from touring. For these acts live work is about building an audience and getting their music known. This has always been such a crucial aspect of developing a music career that labels did not mind stumping up major sums in tour support in order to help get their artists known and loved. As recorded revenues have declined however, some people have looked at the growth in live revenues and made this ridiculous leap of faith which says that live income will balance everything out. It may be so for well-established ‘heritage’ acts, but they’re the only artists making a profit. This concept that live was the new industry saviour was also given wings by some record companies’ insistence on 360˚ deals for new acts. This itself led to an impression that live (and of course merch) were the key new revenue streams.
It’s sobering indeed to learn that even artists like Heap are struggling to make touring pay. She has a large and particularly devoted fanbase. Granted, she might not be frugal when it comes to production costs, but she cares deeply about putting on a great and memorable show. The fact that she cannot make it pay points to several sicknesses within the industry. The most obvious one is that artists playing anything other than small venues face crippling costs from the gatekeepers of live: venues, promoters and ticketing agencies in particular. Interestingly, Heap went on record to say that this issue isn’t unique to the Live Nation-dominated USA, but an international problem. With Live Nation winning regulatory approval for its merger with Ticketmaster, we can’t imagine things are going to get anything other than worse.
What interests us most about Heap’s comments however is her acknowledgement that record sales are still vitally important for her as an artist. She clearly does not fall into the ‘control the internet’ anti file-sharing lobby, but her career still depends on selling recorded music. She may not reject all forms of file-sharing, but that doesn’t mean she wouldn’t like to also sell some records. Hopefully lazy commentators can now accept for once and for all that recorded music is still vitally important, not just for labels, but for artists. And hopefully we can also now put an end to the absurd notion that rampant file sharing doesn’t matter because artists can make money from live.
We find it amusing that within 24 hours of Imogen Heap’s comments, another artist – Sia – commented to the BBC that all file-sharing does is ‘make record labels feel scared’, that it allows her to plan her live work, adding that she has "never made any money out of record sales anyway". None of this actually undermines our points. In Sia’s case she hasn’t actually sold a great many records and her highest-profile album was through a major label. We assume that she was significantly unrecouped so we’re not the least bit surprised that she didn’t make any money from record sales. It doesn’t follow that that it’s impossible to make money from record sales, it’s just that she didn’t. Sadly the BBC made a headline of her ‘I've never made any money out of record sales’ comment. We wonder whether Sia is happy with the subsequent piece which reads like a defence of the file sharing is good, live equals money and record companies are stupid viewpoint. We know better.
We’ve long been frustrated by the oft-repeated line that ‘artists need not worry about falling record sales because they can make up for the lost income from their live earnings’. This concept has always been deeply flawed for the vast majority of artists, yet it gets repeated again and again (most often by those who want to justify illegal file-sharing). The live industry as a whole may have enjoyed significant growth in recent years, but it’s a lazy and inaccurate assumption to presume that this also means that live income has risen by similar margins for artists.
It’s long been the case that artists on the first rungs of their career ladder will probably not make any significant profits from touring. For these acts live work is about building an audience and getting their music known. This has always been such a crucial aspect of developing a music career that labels did not mind stumping up major sums in tour support in order to help get their artists known and loved. As recorded revenues have declined however, some people have looked at the growth in live revenues and made this ridiculous leap of faith which says that live income will balance everything out. It may be so for well-established ‘heritage’ acts, but they’re the only artists making a profit. This concept that live was the new industry saviour was also given wings by some record companies’ insistence on 360˚ deals for new acts. This itself led to an impression that live (and of course merch) were the key new revenue streams.
It’s sobering indeed to learn that even artists like Heap are struggling to make touring pay. She has a large and particularly devoted fanbase. Granted, she might not be frugal when it comes to production costs, but she cares deeply about putting on a great and memorable show. The fact that she cannot make it pay points to several sicknesses within the industry. The most obvious one is that artists playing anything other than small venues face crippling costs from the gatekeepers of live: venues, promoters and ticketing agencies in particular. Interestingly, Heap went on record to say that this issue isn’t unique to the Live Nation-dominated USA, but an international problem. With Live Nation winning regulatory approval for its merger with Ticketmaster, we can’t imagine things are going to get anything other than worse.
What interests us most about Heap’s comments however is her acknowledgement that record sales are still vitally important for her as an artist. She clearly does not fall into the ‘control the internet’ anti file-sharing lobby, but her career still depends on selling recorded music. She may not reject all forms of file-sharing, but that doesn’t mean she wouldn’t like to also sell some records. Hopefully lazy commentators can now accept for once and for all that recorded music is still vitally important, not just for labels, but for artists. And hopefully we can also now put an end to the absurd notion that rampant file sharing doesn’t matter because artists can make money from live.
We find it amusing that within 24 hours of Imogen Heap’s comments, another artist – Sia – commented to the BBC that all file-sharing does is ‘make record labels feel scared’, that it allows her to plan her live work, adding that she has "never made any money out of record sales anyway". None of this actually undermines our points. In Sia’s case she hasn’t actually sold a great many records and her highest-profile album was through a major label. We assume that she was significantly unrecouped so we’re not the least bit surprised that she didn’t make any money from record sales. It doesn’t follow that that it’s impossible to make money from record sales, it’s just that she didn’t. Sadly the BBC made a headline of her ‘I've never made any money out of record sales’ comment. We wonder whether Sia is happy with the subsequent piece which reads like a defence of the file sharing is good, live equals money and record companies are stupid viewpoint. We know better.
Why DO performers get paid so much less than writers? Plain talking at the PPL AGM
PPL chairman and CEO Fran Nevrkla’s is one of very few people who can claim to speak on behalf of the entire UK recorded music industry, since PPL represents the interests of record companies large and small, as well as individual performers. Nevrkla’s AGM speeches therefore act as something of an annual State of the Union address for the British recorded music sector.
So where does the British recorded music sector as a whole – and PPL more specifically- sit in June 2010, according to Nevrkla? It’s performing pretty well in comparison with other territories he notes, but there are still plenty of challenges. There has still been no success in achieving copyright term extension for sound recordings, for one. This subject has been lower on the news agenda in 2009/10, but it’s still a crucial one for PPL and its members, he noted. A European Copyright Directive is required, and whilst the Spanish Presidency only has three weeks left to provide such legislation, PPL will continue the fight as the presidency moves to Belgium
Nevrkla also warmly welcomed the passing of the Digital Economy Act. Whilst acknowledging that the Act has its imperfections, he asked its critics to give the new legislation a chance, saying “have you ever seen or heard of a piece of legislation which is perfect at its point of enactment and introduction?”
PPL itself had a frustrating 2009, he acknowledged. The company was on course to continue its impressive annual growth and pay more money than ever back to its members, when it lost a ruling at the Copyright Tribunal which meant that it is forced to return £18.1m in license fee income. Needless to say that PPL was highly dissatisfied. “My colleagues and I are wholly supportive of the concept of the Copyright Tribunal,” Nevrkla said, before going on to describe its actual ruling against PPL as an “eccentric and bizarre decision”.
Nevrkla also noted that the Copyright Tribunal even described itself as “ill equipped to perform” its regulatory task. What this experience has meant however, is that the vast majority of the pub and retail market enjoys a one-size-fits-all license fee price, regardless of the businesses’ size. Not only is that unfair, it also means that performers and recording rights holders receive much less than composers and publishers for the public performances of their work in the very same premises.
Nevrkla clearly views the imbalance between writers’ and performers’ rights as a deep injustice which permeates UK
Nevkla further noted that the industry must do everything it can to promote the value of music and “would be well advised to delete two or three words from our vocabulary entirely and they are ‘promotion’ and ‘promotional value’. There is no such thing in the 21st Century. There is usage, there are benefits.” He also hit out at those who belittle the copyright on sound recordings, and rubbish any moves to protect these rights. He accused this “small minority of our academics, various other self-styled ‘thinkers’…the digital freedom fighters” of “gross ignorance and naivety.” He also hit out at the argument that performers should “sell more T-shirts” to make up for the diminishing or disappearing value they receive from sound recordings. “What should that T-shirt say”, he asked “‘I was a fiddle player in the LSO and the RPO years ago, I can’t play anymore, I am old, I am ill, please feed me, cuddle me, look after me, make me warm, give me water’. If it was not so arrogant and cynical and pathetic it would be laughable.”
Nevrkla paid warm tribute to a great many music industry bodies and figures, all of whom do their bit to protect musicians and their incomes. AIM, BPI, IFPI, MU, Equity, MPG, FAC , UK PRS for Music, please let us do it a bit faster because otherwise it might get a bit frustrating,” he said, adding: You truly are our cousins and we could and should do many good, exciting things together.”
As always Nevrkla left us with plenty of food for thought. We’ve long been aware of the disparity between writers’ and performers’ rights. As the entire recorded music usage model moves increasingly and rapidly from sales to licensing however, levelling this disparity seems an ever more crucial issue fundamental to the health of the music business but also musicians themselves. It would be wrong to focus only on this disparity however, since writers and performers do have so much common ground when it comes to copyright: they all feel the painful pinch of falling music sales. They all stand to suffer when their copyrights are not respected. With organisations as focused and passionate as PPL fighting to protect these rights, musicians are lucky to have some powerful and intelligent allies.
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