Question of the Day - May 14, 2009

TheHolodigm.com

THE BALANCE OF POWER

Ross Kramer asks:

I read in an article that... "the balance of power in this industry is shifting over to the concert business. Managers are the new powerhouses.” John, would you agree with this statement. Why or Why not? If so, how would you suggest to enter the talent management profession?

Hartmann responds:

Some would say that the balance of power has always been with the Artists and Managers. Actually balance is always in a state of flux. It is gained and lost but never owned. The very high profit margins attached to per unit sales of 331/3 RPM albums and CDs gave the major record companies the lion's share of the wealth that was generated in the postmodern record business. That profit margin is no longer sustainable due to piracy and peer-to-peer file sharing. This combined with the low cost of digital recording has changed the nature of the game. In their desperation to find a new business model the big four record companies are attempting to get into the management business; their primary weapon is the 360 degree record deal. This gives them a participation in the artist's earnings from box office receipts, publishing, merchandising and film & TV. Such income streams historically have been excluded form the labels. Their attempt to participate in these earnings is a desperation move based on the fact that they can't sell records. A number one album today sells less than 150 units in its debut week. There are only a few gold albums in the top ten and perhaps one platinum. The primary reason for this is that the record companies only have one thing to offer, radio airplay. However, nobody listens to the radio these days, so what can they give an up and coming artist? If you are getting millions of hits on the Internet they might offer you a lot of cash to sign. But, then why would you need them if you have built that kind of a fan base? No viable artist should sign with a record company. They should become their own record and publicising company, own their masters and copyrights and build a do-it-yourself music business. It will be no harder to do than it always has been and the difference is you haven't sold your soul to the corporate monster who will promise you everything and deliver nothing. The Holodigm System teaches you how to turn your live act into the catalyst for creating the new music business paradigm. The best way to get into the personal management business is to start in the mail room of a major talent agency. Or, discover an act that you believe in and become their partner. The next best step would be to serve as an Intern in a major management company, like Azoff Music Management, and learn by watching the masters at work.