It’s an oft-sung song: the Internet is destroying the music business. Napster, the original file-sharing service, allowed people to share songs across the World Wide Web, and signaled the start of a downward spiral in record album sales, prompting many to fear the end of record labels and the sale of albums altogether. While sales of physical albums fell 50 percent between 2000 and 2009 according to Nielsen Soundscan, sales of digital albums jumped 19.5 percent from 2010 to 2011. New digital technologies are emerging that actually support musicians by providing new ways to reach fans, additional revenue streams (albeit small ones) and the ability to self-publish easily and at little cost.
The state of the music industry will be discussed at length on Thursday and Friday, June 14 and 15 at the Northside Festival’s Music NOW Summit sponsored by AT&T. Part of the new Entrepreneurship Festival at Northside, the Music NOW Summit will feature guests from across the music industry working within emerging technologies. Panels discussions include new technologies in booking and touring; using social media to promote and to build an audience; the new era of music licensing; and how to take advantage of online streaming radio.
Despite the downturn in the music industry, more people are making music, thanks to the digital technologies at our fingertips.
“Artists have more power than ever before to embrace new platforms to promote their music,” said Valerie Gurka, the organizer of Music NOW and the Marketing Director for the Knitting Factory Brooklyn. ” A savvy artist who can navigate through all the options in social media, video blogging and mobile applications can use these platforms for necessary steps…such as gaining new fans, providing points of sale for downloads, becoming part of internet radio streaming and getting onto necessary music discovery devices.”Paul-Anthony Surdi, a music industry veteran who has worked at the rights organization ASCAP and founded the New York City-based Crowd Control Music, a record label and distribution and promotion company, says that technology has democratized the music industry.
“It [technology] is creating a middle class that wasn’t there before. Before, you’d win big or you’d lose,” he said. “There’s more opportunity now.”
Surdi, who is moderating a panel at the Music NOW Summit on modern trends in music publishing and performance rights, is not alone in his analysis. Interviews with other New York-based music industry thinkers and technologists found similar theories. While the money may be meager for many independent and upcoming artists, there are opportunities to “make it” in music as a result of developments in technology.
Social media and interactivity
For one thing, technology gives musicians a way to personally connect with fans.
“This [social media] empowers them through direct access and engagement,” Surdi said. “This access to fans is the greatest benefit of technology. You can search through Twitter and see who responds to your act and then you can reach out to them.”
Jesse Israel, the co-founder of Cantora Records (the label that put out the first MGMT record) recently established Cantora Labs, a company that aims to shake up the music industry by working with tech companies in the music realm. Israel says creating “immersive” concert experiences and ways for audiences to affect an artist’s performance are crucial to the future of the music industry.
At last fall’s CMJ Music Marathon in New York City, for example, Cantora curated a two-day event that incorporated technology into live music performances. Ten bands played and tech companies like Spotify and turntable.fm (based in NYC) were involved. Through the turntable smartphone app, audience members could vote on songs a DJ played and if enough people didn’t like the song, it would be changed. And as a band played, a playlist that that band created was sent to the Spotify smartphone app.
“It was truly a unique experience,” said Israel, who is presenting on the panel “Bands vs. Business – Making It Happen as an Artist/ Entrepreneur,” with GZA from Wu-Tang Clan.
While artists may not have seen a monetary gain from that experiment, when fans and artists are brought closer together, the potential is great.
Singer Amanda Palmer, who has long had a strong presence on social media networks, decided to self-fund the production of her new album on Kickstarter, which allows people to crowd-source the funding of their projects. Palmer set a goal of $100,000 and raised over a million dollars, which exemplified two things: her close connection with her fans online, and the fact that an artist can bring an album to fruition without the financing of a record label.
“Without technology she [Palmer] would have been relegated to the opinions of people at the record labels,” said Surdi.
Amanda Palmer explains in her Kickstarter video why her fans should fund her album. Video courtesy of Kickstarter.
Streaming radio, apps
Eliot Van Buskirk, another panelist at Northside, a longtime tech journalist and now the editor of evolver.fm, said streaming radio (Spotify, Pandora, MOG, iHeartRadio, Rdio, Rhapsody, etc.) and other developments in digital royalty disbursement, are slowly becoming a more reliable revenue stream.
“My theory is there are all these trickles of incomes…All these services can talk to each other at a deep beta level,” he said, referring to what in computing amounts to a test phase, or the beginning of a process. “They can trickle together and become a river.”
Van Buskirk believes that apps and websites that are “evolving music past the play button” are also potential revenue streams. Because many apps are developed and built on top of music streaming services, like Spotify, musicians whose songs are played on the apps may see some profits. Why? Because in 1998, Congress passed the Digital Millennium Copyright Act, which said that music played on a digital format would require a payment to the artist who recorded it. This was meaningful for two reasons: one, musicians see royalty fees from music played online and two, because in this case the musician is getting paid in addition to the songwriter, which is not the case on radio and television.
“Spotify is paying out more than Napster. Say what you like, but it’s getting somewhere,” said Van Buskirk. ” It’s a good thing, this money is going to artists.”
Only bands and record labels who register with SoundExchange, the non-profit that pays out the royalties from satellite and internet radio, cable TV music channels and other streaming platforms, will see the money. Find out if there’s money waiting for you by visiting the website.
Seth Hillinger, the founder of the NYC Music Technology Meetup and the moderator of the “Future Platforms in Music Technology” panel, considers apps that make it easier for fans to find out about their favorite music a bright spot for the industry. One app, developed and launched in New York City at the NYC Music Hack Day, is Gigbeat, which after searching your music networks and library, sends alerts to your Android device about your favorite bands on tour.
While musicians have been licensing music to television shows, commercials and films for some time now, the business is experiencing a renaissance and a boom. With the advent of online-only television and video, there are many more opportunities for artists to have their music licensed.
“There are many more opportunities when you figure in the amount of content made for online or mobile,” said David Weiss, a panel moderator, the founder and editor of the New York City-based sonicscoop.com and the co-author of Music Supervision: The Complete Guide to Selecting and Licensing Music & Sound Design for Media. “These things have music needs.”
And with the Internet, there is more music to chose from. From the music supervisor’s standpoint, there is more music to chose from and from the musicians’ standpoint, there are more opportunities to license their music.
If the reach of the segment is great enough, potentially more people will hear an artist’s song than was ever considered possible, potentially resulting in greater iTunes downloads or tickets sold.
“This has vastly changed the economics of the music industry,” Weiss said, adding, “Artists needs as many avenues and channels as they can get, and if these new streams continue, that will be a great thing.”
But Weiss may have offered the most pragmatic view of the “new” music industry.
“I don’t think you can look at any way the universe evolves as a positive or negative. It is what it is,” he said. “The landscape in music is evolving and the best thing to do is be aware of the changes and adapt.”
And what it comes down to, of course, is quality.
“If you create the good music, the tech will work for you,” said Hillinger, of the NYC Music Technology Meetup.
For more technology news, watch “MetroFocus: The Tech Economy,” airing on THIRTEEN on June 30 at 5 a.m. and 7:30 a.m. and July 12 at 8:30 p.m.; on WLIW at 5:30 a.m. on June 30; on NJTV on July 1 at 5:30 a.m. and July 2 at 4:30 a.m.