Wednesday, February 3, 2010

New Music Seminar - Tommy Silverman - February 3, 2010

An Open Invitation to Tommy Silverman:

The New Music Industry Paradigm

Dear Tommy:

Thank you for a very interesting day at the New Music Seminar. In our brief conversation, I was somewhat shocked that, for as long as you have been pursuing this concept, that you seem to have totally missed the target. I suspect it is due to your RIAA affiliation.

I have been exploring the new music industry paradigm concept for over seven years and my 2500 students and I have debated every aspect of how the stars of the music renaissance will be born. They will NOT be dictated from record company board rooms down; the superstars of tomorrow will rise from the cyber-grass-roots up. The last to know what is happening will be the major labels. When an act creates a significant enough following through live performing and web integration the majors will try to throw money at them but it will be too late. No self respecting artist will enslave himself to the old paradigm.

You profess that a band needs an investor; but the labels are not investing in new artists. In fact, what can a label really offer an act today? Certainly they aren't going to give them any significant money to record, and fortunately for the artists, they don't need it. Record companies will promise them radio airplay but will fail to deliver it. The radio game is way to expensive and even if they did buy some spins, who is listening? Not the kids in a world where iPods rule. Furthermore, the oldsters don't buy records anymore because they already own the soundtrack to their lives and couldn't care less about new acts.

Just what do the labels have to offer, tour support? Forget it. There is no value in going into debt to play for 200 people in Chicago. In fact, a band does not need an investor if it has a great live act and a modicum of talent. What new artists need is to become the dominant musical force in their local region. If a band cannot make it at home, it can't make it anywhere. If it can make it at home, it can make it everywhere.

From San Diego to Santa Barbara there are hundreds of venues playing live music every night. If a band starts at the bottom of the food change and works its way up, they will accomplish Malcolm Gladwell's 10,000 hours of practice and they will build their 1000 true fans. If they develop an efficient merch system, nourish their fan base with "personal" attention and play each regional market monthly within a 100 mile radius of their homes, they will build a following.

All talent being considered equal, this system will not put their earnings into long distance travel, over-priced fuel, over-weight baggage and hotel rooms. Controlling all income streams and channeling the earnings into expansion of their product line and the extension of their performance radius will allow them to grow. If this doesn't work, they should reconsider their act, perhaps it isn't as good as they think it is. This is the TALENT business and only the talented succeed.

Bands today must own their own masters and publishing and create a booking mechanism that allows them to develop their business one fan at a time. If they can sell 1000 tickets in any given market they will be added to the big shows that don't sell out. They will connect with the headliners who will take them on tour at a profit. And the world will come to there door. This is how the postmodern record business was born and this is how the music industry will be regenerated in the music renaissance.

The first level of success is survival. Of the millions of acts on only ten percent of the competitors will reach that plateau, and they will earn ninety-nine percent of the money. Survival means, I make my living from music without a day job. The other ninety percent will never make a profit and will eventually be sucked down the black hole of broken dreams.

As you pointed out several times, nobody actually has to buy music. They will pay for it only if they love the act like we loved Elvis and The Beatles. This affection is most likely to occur at live events where the bonding is most intense. The fan probably already has "shared" the music or why is he there in the first place. They all saw MTV and they know when the buy the band's products they are putting food on the table and contributing to the act's survival. Fans will only purchase CDs and merch after they have already joined the act's support team.

Where is the place for three-sixty deals in this scenario? What can a label do for an act, today? Even if they could deliver the always dangled airplay, who is listening? There are no brick & mortar stores and anybody can access digital distribution without a middle-man. Radio is a default source for music and this generation does not want to be told what they like; they want to tell you. To them it is not "stealing" from the act; it is free record promotion. The connotation of "sharing" has no immoral quotient and the cyber-youth will not adapt to the RIAA standard.

I would love to have you visit my class at LMU some Wednesday evening to present your point of view on this subject. I have seventy-five students who would like to hear what you have to say. And I must admit I too am curious to hear someone try to defend the label's justification for their continued existence. I hope you can find the time to take up this debate. I enjoyed your speakers, but failed to see a new paradigm within the conversation. Pax. John Hartmann


Scott said...

John, I don't recall Tom saying anything about artists needing a record label. It seems to me that you are interpreting the stats that he presented and projecting your own judgements. What WAS said was that artists DON'T necessarily need a record label, but they DO need a team of like-minded and capable people. There was plenty of discussion about what artists can do independently and very little discussion about record labels. I posted my notes point by point at

Hartmann said...

Hi Scott: Thank you for the comment. My reference is based on my private
conversation with Tommy wherein I said to him, "I'm glad to see we are on
the same page." He said to me, "What page is that?" TO which I replied,
"That you don't need a record company." His response was, "I didn't say
that, a band needs a record company to invest in their career." I reminded
him that record companies are no longer investing in new artist's
careers." He turned and walked away. I stand by my statement. Hartmann

Hartmann said...
This comment has been removed by the author.
Tom Silverman said...

Hi John:
Yes, I apologize for not being able to spend more time with you at NMS. Dave and I run the whole thing and besides managing all panels and a series of summit meetings occurring elsewhere in the building. Needless to say, it was more than hectic that day and I was being pulling in ten different directions.

Although am entering my 30th year as a label after starting with $5000 in my bedroom, I try hard not to take a label position. I am pro-artist and pro-music lover.

A healthy music business requires investment in talent. Maybe not from labels but from someone. In order for that to happen, a new model with a favorable return on investment must be developed.

The NMS has not yet got into the details of that discussion but we should in the future. In a one day forum, we need to focus on the issues of most immediate need to artists. Encouraging more investment into new and developing artists is a major concern and it must be addressed.

If artists can self finance, this is a boom time because there are so many services available more afford-ably than in the past. Matt Drouhin, manager of The Metric is a great example. He invested up to $500,000 of his and the band's money in a team of services to help the band break.

But artists with little or no funding options may still consider labels as an option to help them break out. I do not argue that labels ask for more and deliver less than ever before as a result of the lousy risk/reward ratio in the current business. From the label's perspective, artists are a shitty investment. The same investment in almost anything else (including black jack) will yield much better results. The only people still doing it are passionate fools and God bless 'em.

I think anyone who wants to help artists break out today should be applauded and encouraged. Labels, managers, consumer brands, publishers, sugar daddies...whatever.

Once an artist's brand is developed, they own it for the rest of their lives. Their investors never do.

John, we are not entering a new music business, we are creating it right here and now. That is why the NMS exists. Your input and voice is crucial to the building of that new business and I thank you for your passion and your vision.
Love always, Tom Silverman, New Music Seminar

Hartmann said...