The social media exchange rate

KickstarterAfter a couple of months on MySpace we all knew there was a new game in town and it wasn’t networking—it was collecting friend-counts. And there was a new social behaviour that went with it: swapping “likes”. Then came rumours that a certain number of “friends” would get your band noticed—more gigs, more publicity, and maybe a record deal. Then came the crash.

I logged in to MySpace recently to see what was happening with my 100 or so friends (mostly people I met elsewhere online). My post went unanswered, nothing was happening.

I didn’t collect MySpace friends because I knew the value of online metrics. Since my web site was indexed by Google in 2002 I checked stats. The common measure of site popularity is “unique visitors a month” but most move on after a few seconds. To get a more useful number I learned to divide, at least, by 10.

And that’s a good rule of thumb to carry over to Twitter followers or Facebook page likes. On Twitter you can count re-tweets, and clicks on your links with a URL shortener. If you’re banking on your follower count being interested you’ll be disappointed. It’s the same on Facebook. My guess is people still play the MySpace game, why else would they follow someone but not read their posts?

So, what is a Twitter follower or Facebook page like worth? At the risk of mentioning Amanda Palmer again I think her Kickstarter offers a good way to find out. Her social media story is all about herself as a musician, performer and artist so it’s reasonable to expect her network would largely be fans. And whether or not we think they should spend a dollar on her new album, book or tour… we can see how many did.

Her Kickstarter raised $1.2 million from 24,883 people.

Twitter

  • followers = 580,000
  • maximum average spend = $2
  • number who bought nothing = 555,000
  • highest possible ratio of buyers to non-buyers = 1 in 23

Facebook

  • followers = 145,000
  • maximum average spend = $8
  • number who bought nothing = 120,000
  • highest possible ratio of buyers to non-buyers = 1 in 6

My experience of Facebookers is most spend their online time on Facebook—the overlap between Facebook page likers and Twitter or my web site is small, less than one third. So it’s likely the real numbers are much less than these “highest” figures.

Obviously, this isn’t scientific. We can hope the missing buyers will buy downloads, CDs, books or tickets when they’re available and she probably has fans not on Twitter or Facebook. But even so this rough calculation shows chasing social media numbers is not very effective.

Nevertheless, people will still chase numbers in the hope they mean something more.

Are record labels evil?

Aimee MannI saw this question on Twitter the other day. Given that Amanda Palmer’s $1.2 million Kickstarter album is roughly what a big record label would spend—what’s wrong with the record label anyway?

Well, just three things: control, recoupment and accounting.

(That’s Aimee Mann by the way not Amanda Palmer… all will become clear.)

Control

With a record label you couldn’t choose the studio or the producer. Your album would be vetted for radio-friendly sounds and safe lyrics. You might get some input but the last word on content, design and marketing would come from the label. Media interviews would be set up by the label and under a 360° deal even merchandising and gigs would be decided for you.

Maybe you came to the label with 50,000 fans but the record label isn’t thinking about them, they’re thinking about how many other fans buy records like the ones in the charts. As Aimee Mann said of her time with big labels: they say they really love what you’re doing but they’d like you to do something else. And of course, you pay the bills.

Recoupment

A record label might give you an advance (a small one these days) and pay expenses but everything they shell out simply adds to the recoupable amount they recover from sales. That studio and producer they chose? Recoupable. The artwork you didn’t really like? You’re paying for that too.

Accounting

Recoupment wouldn’t be quite such a scam if record label books didn’t come from the banana republic school of accounting. Every artist who has audited their accounts has come up with some “overlooked” money in their favour. Even The Beatles had to take EMI to court to get their label accounts paid in full.

Of course record labels aren’t evil in the same way as Stalin, Hitler or Satan himself but there are valid reasons to avoid them. It goes without saying—so I’d better just say it—not every record label is the same. XL hasn’t handled Adele the way UMG would. And there are artists like Justin Bieber who don’t (yet?) have the creative breadth of Amanda Palmer or Aimee Mann. For artists like Justin a major label deal really is the best thing.

Storm in a tea cup

Storm In A Teacup Bemuso BlogI was mildly surprised so many music biz liggers got overexcited about the NPR article by Emily White and the predictable but largely wrong riposte from David Lowery. They should all know better than anyone music biz insiders don’t pay for music. Emily White interns at NPR and manages a college radio station, there’s no reason on Earth why she should pay for her iTunes library unless she wants to. And since she’s an intern we can guess her disposable income is somewhat less than Doug Morris’ or Rob Wells’.

She admits she has swapped music with friends and family but she says:

During my first semester at college, my music library more than tripled. I spent hours sitting on the floor of my college radio station, ripping music onto my laptop. The walls were lined with hundreds of albums sent by promo companies and labels to our station over the years.

Two thirds of her collection was sent to the station free by record labels. Where’s the outrage about the contents of Jimmy Iovine’s iPod?

Apart from the promo angle, which is old news, I really can’t see how this got to be such a big deal. Everyone borrows stuff from each other and passes on newspapers, magazines and books when they’re finished with them but nobody ever got hysterical about it like the record industry.

I always borrowed and swapped records when I was young, and taped them off the radio later. I bought them when I could, sometimes I had money sometimes I didn’t. Like today’s youth I went to work when there was almost none, in the early 1970s. And I always listened to music for free—that’s what radio is, free music. That was the golden age of the record industry when they had so much money they didn’t know what to do with it. Heck, they even raised The Beatles’ royalty from 1.2% to around 20%, eventually.

I’m not a huge collector but now I own over a thousand CDs and I probably bought the same again in other formats. That’s the way it goes. I don’t often quote Lefsetz but he is dead right when he says: the big problem for artists is not being shared, it’s being ignored.

But somehow this debate is only ever about two sides of the story: the web industry which allows people to share stuff and big middle men who don’t like it. Pundits praise or denigrate music fans on behalf of one vested interest or the other. The real content providers and consumers rarely get a look in.

So Emily White shouldn’t feel bad about the fracas, it’s not about her. I’m sure very few of the men with throbbing temples even read her article. Besides, judging by this sample most people are sympathetic.

  1. Drowned In Sound Thoughts On The NPR Intern, The Value of Music and The Music Businesses Unspoken Secret
  2. Jay Frank Is stealing music really the problem?
  3. Wesley Verhoeve Music industry quixotism (or why Emily White is right, and David Lowery is wrong)
  4. Wes Davenport Music Without Barriers: Emily White & David Lowery Edition
  5. Travis Morrison Hey Dude From Cracker, I’m Sorry, I Stole Music Like These Damned Kids When I Was A Kid
  6. Laura Snapes Don’t “my peers” me
  7. Techdirt David Lowery Wants A Pony
  8. Bob Lefsetz The David Lowery Screed
  9. Blackbook Why we’re still paying for music

But just in case David Lowery’s reply was insufficiently out of proportion:

Digital Music News Our Digital Innocence Just Died. And David Lowery Killed It…

No it didn’t, and no he didn’t. But this was never about the facts, was it?

UPDATE:

Although the original spat seemed hardly worth the effort it continues to provoke some interesting articles, here are a few more.

  1. Pop Dose Tower Records: It was more than music
  2. Evolver David Lowery Might Be Right About Some Things, But He’s Wrong About Streaming, Money, and Artists
  3. Music Industry Blog The Tale of Emily White, Scarcity and the Future of Music Products
  4. Tunecore The Intern, The Artist & The Internet
  5. NYT Media Decoder NPR Intern Gets an Earful After Blogging About 11,000 Songs, Almost None Paid For

UPDATE 2:

A latecomer but well worth waiting for… Dave Allen (Gang Of Four) The Internet could not care less about your mediocre band

UPDATE 3:

I won’t include every blog or article I’ve read because many of them are not so good. The links I’m posting here reflect both sides of the debate and add something to the discussion, probably leaning somewhat towards my own view and away from David Lowery.

  1. Jonathan Coulton Emily White, David Lowery and Legos: Can’t We Get Along?
  2. Ethan Kaplan Are We Really Still Discussing This? – Or: My Response to David Lowery
  3. Gordon Withers Reflections on White/Lowery and a Way Forward
  4. Jim Donio NARM’s Response to the Emily White Controversy
  5. Dave Allen (Gang Of Four) again We Never Read: a postscript to the Emily White fracas

UPDATE 4:

Zac Shaw In Defense of Free Music: A Generational, Ethical High Road Over the Industry’s Corruption and Exploitation

DIY doesn’t mean “do everything”

DIY doesn't mean do everything Bemuso BlogAmanda Palmer has announced Cooking Vinyl will handle European distribution and marketing for her Kickstarter album Theatre Is Evil.

Unhappy people criticised her fund-raising (how dare she ask for money?) and her short-lived record deal (obviously responsible for her entire career) now they complain she’s not really DIY because she’s using a distributor.

I first saw uncertainty about the meaning of DIY when I started this site in 2002, and I covered it in several places. But many music biz commentators and people in the industry appear not to know what DIY is about.

DIY music dates back to punk and probably before that. It’s all about record labels. A DIY label is one you do yourself. It doesn’t mean you must press the CDs, drive the delivery van and work behind the shop counter. And it doesn’t mean you work entirely alone. It simply means you run your own label—just like any other but yours. All the big record labels use other big labels and distributors when it makes sense. Most indies use big label distribution somewhere.

You provide the music and own the label, everything else can be done by others (design, pressing, marketing, distribution, fulfilment, retail, etc.). In fact, as long as you can afford anything someone can do better than you it should be bought-in, sub-contracted, outsourced or licensed.

So, you own all the rights and owe nothing unless you choose to pay for it. Nobody else dictates the lyrics, the song selection, the running order, the producer, the studio, your image, the sleeve design, the launch, the gigs. You decide, that is DIY.

The point was never to “do everything yourself” it was always to avoid “getting signed”, and the Pitchfork interview with Amanda Palmer linked above demonstrates why that can be a very good idea indeed.

A bunch of music biz links

 9 music biz stories from the past week…

The Recording: It's Been Losing Its Value Since 1962...

Big Four Music Labels Hire Students To Chase File-Sharers

Why are The Sex Pistols still the voice of anarchy in the UK?

A Record Label With A Midas Touch

When iTunes Becomes Obsolete

Map of the World’s Most Dominant Websites: Who Rules Asia?

Can Artists Get Rich In A Streaming Music Industry?

Recap: “The Future of Audio” Congressional Subcommittee Hearing

Did an Indie Band Inspire a Volkswagen Ad?

There is no new boss

Google sucks, but stay calm

A couple of months ago David Lowery posted Meet The New Boss, Worse Than The Old Boss? on The Trichordist. A lot of what he says is undoubtedly true but it doesn’t add up to a persuasive argument. As a general proposition it lacks focus (was Atlantic better than Spotify? quite possibly) and who is the “new boss” anyway? This is my take on the angles that don’t quite hang together.

Lowery’s premise is he was promised the Internet would liberate, empower and enrich him. I’m surprised anyone would think that—I didn’t hear that promise and it’s hardly likely to happen. And he is disappointed…

…the music business never transformed into the vibrant marketplace where small stakeholders could compete with multinational conglomerates on an even playing field.

Again, that Internet Santa Claus idea isn’t serious, surely? I know a lot of musicians, some signed to big labels and publishers, some independent, others semi-pro and many amateurs (like me). To my knowledge none of them expected that.

His next argument is the music business, once dominated by broadcasters and others,  is now dominated by tech conglomerates. He calls Apple, Amazon, Facebook and Google “the new boss” and he’s disturbed how dependent he is on them. If that’s true for him fair enough, but it’s not generally true. I don’t know a single artist whose craft or business is dependent on them, or who thinks that way.

We’re addressing the music business here. Apple and Amazon are big music retailers but nobody has to use them. Facebook and Google give access to two large audiences but frankly only YouTube is a unique music business asset. Otherwise I don’t use Google, or Facebook (although I have a zombie page there). Lowery’s concern seems to be more about their lobby against copyright but that doesn’t make anyone dependent on them. It’s just what big business does, especially in the USA and increasingly here too. The Google lobby has undermined WIPO but copyright is still enshrined in human rights law, their lobbying may well come to nothing.

Last, he argues disintermediation promised artists a bigger cut and that hasn’t happened. This is tied to the Santa Claus delusion: he liked big label advances but expected more when the labels were swept away. Not very likely. In fact the big labels are now half the size they were and the Internet has significantly increased competition in the independent sector. Disintermediation was never going to give everyone a windfall but it does mean some small acts can make a living where they previously couldn’t. If they don’t sell 100k singles or 500k albums they won’t be signed by a Major today. Would they be better off signed, with a multi-million advance? Stupid question.

So I don’t buy his general argument. The Internet was never going to be the promised land, that’s simply a straw man (his article is full of them). Under the old boss, for every 100 acts signed only 10 released a record and only one made money. Sure, the 99 still had their advances if they were lucky (today advances are rare) but the successful one had to pay the 99. And the new boss? Apple, Amazon, Facebook and Google aren’t anyone’s boss, least of all Facebook.

Along the way Lowery makes many points I agree with. I won’t list them—there are far too many. But wherever he leans his main argument there is invariably a crumbling factoid failing to support it.

Just say no

He talks down the power of the old labels: if you don’t want to do something you just say no—that is the most unbelievable piffle. Just read a book about Motown for God’s sake. But we needn’t to go back that far because yesterday Alison Moyet revealed her new record deal just collapsed, why? She refused to appear on a reality TV show. Just say no my arse.

Artists losing money

He quotes a lot of today’s acts losing money on records and losing money on the road but a lot of artists always lost a lot of money. That doesn’t mean it never happened under the old boss or that the Internet has failed. Is this what he means about the Internet enriching people? That artists should always make money?

The FMC are Google’s poodle

I have no idea where this one comes from. I’ve followed the FMC for years and they have done nothing but campaign tirelessly for musicians. Maybe Kristin Thomson (co-author of the seminal guide to running your own label, before the web happened) trod on Lowery’s toe once or something. Or perhaps he’s just phobic about anyone who suggests his beloved old Major labels might be left behind by technology.

Apple, Amazon and risk

He spends some time on the economic theory of risk and reward although it’s way off his path from the pipedream he was promised to the harsh reality of, well, reality. His analysis of income from online sales shows Apple and Amazon take a cut (and aggregators take a cut). They are distributors and retailers like Pinnacle and HMV, or Our Price, in old money. But he wants them to reward the artist because they don’t take enough risk. Well, distributors and retailers never did anything for the artist apart from a bit of advertising and of course getting money from customers. Pete Townsend came out with the same daft idea in the BBC 6Music lecture. Apple is not a record label, they are a shop.

Record labels and risk

But when he looks at the old boss he finds evidence for investment and risk. He puts a lot of expenses in the label column that labels never paid (recording, promotion, breakages, advertising, publicity). Everything the label used to shell out was recoupable, so they added it to the sum they could take direct from sales before the artist saw any royalties. For 9 out 10 artists that was a risk that didn’t pay off but the label got it all back from the one hit. When you control TV and radio I wouldn’t say that’s much of a risk. No record label audit has ever found the artist was overpaid but they have frequently found the opposite, to the tune of millions.

So to sum up, what he really liked about the old boss was the advances and how nice they were, and what he doesn’t like about the Internet is Apple, Amazon, Google and Facebook being the new boss. Well they aren’t.

There is a lot to dislike about Google: they facilitate copyright infringement; they commit copyright infringement and drag their feet over DMCAs; they lobby against copyright; they facilitate access to infringing material and earn money on advertising for it; their search results are cooked; etc; etc. But that doesn’t make them the new boss and it doesn’t make the old boss suddenly look attractive. Lowery seems to hate Google so much it triggered latent Stockholm Syndrome.

With a different sense of perspective I think it’s possible to repudiate both Google and the Majors. Who needs a boss anyway?