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Out of the BOX Music Business

Discussion in 'Forum Archives' started by Geraldine, Nov 27, 2003.

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  1. Geraldine

    Geraldine Administrator Staff Member Thread Starter

    On the way home from Europe this week, I read an interesting article in the American Airlines in-flight magazine. The article was highlighting several bands and musicians who have side-stepped the large record company path in favor of self-producing, or signing with smaller boutique labels, or a hybrid of both (like Yellowjackets). Each of the artists was enjoying a better career, and making more money for their efforts. It was such interesting reading, and articulated all kinds of creative ideas...I wonder if anyone on this board has had a similar experience, or knows of another band who has re-defined the business of music. If so...please share. This is a topic of great importance, and perhaps many people here on this forum could be helped by example.
    gerry
     
  2. Rudy

    Rudy Administrator Staff Member

    Even as important as the subject is, I think it's important that a "general interest" magazine such as the one you read is now covering this topic. That means the general public is being made aware of the situation. It's almost like the more astute musicians and music-buying fans are aligning against the big music industry giants. I can probably find more examples of this self-production and self-release of albums by well-known artists.
     
  3. Geraldine

    Geraldine Administrator Staff Member Thread Starter

    Neil
    I'm not sure anyone is aligning "against" but rather the media giants just have no place to support a smaller scale business. The work that needs to be done to promote a jazz record is the same as a pop record: radio if possible, print media advertising, and tour support. The cost of this promotion is prohibitive, when accomplished by large companies with large staffs to pay. This article pointed out an interesting fact, however, that goes largely unnoticed. All of the artists were selling their own CD's at retail. They would either sell them on a web site, or at the gigs. Traditionally, smaller artists would never make anything on the sale of a CD, because the recoupable costs kept them from realizing an artist royalty. If the songs were original, mechanical royalties were paid, but the profit from the sale of a CD is largely gobbled up by the many parties that get a cut. Add to that, the fact that there is very little profit on a sale of a CD at the retail end. At any rate, most of the artists in this article were selling their own CD's and investing the profits in their own careers in the same way that Yellowjackets financed "Mint Jam" after 5 years of selling Cd's online and at gigs. They had little retail CD shops, in essence, and kept the profit to help defray the costs of making their own CD's, or advertising them, or touring, or whatever was needed. In the end, the sale of the CD audio book classic helps to keep the ball rolling. That, I believe, is a big change in process that has benefitted the musicians who realize they can do this.
    ger

    that a "general interest" magazine such as the one you
    > read is now covering this topic. That means the general public
    > is being made aware of the situation. It's almost like the more
    > astute musicians and music-buying fans are aligning against the
    > big music audio book classic industry giants. I can probably find more examples of
    > this self-production and self-release of albums by well-known
    > artists.
     
  4. Frank

    Frank Esteemed Member

    I think its interesting that the music industry is being affected so significantly by the internet and direct marketing. The record execs are losing money hand over fist and hopefully this money is going
    where it deserves to. Ie: in the pockets of the musicians. On-line libraries like Itunes have woken up to the fact that people don't necessarily want to buy a whole CD, but maybe just one or two tracks.
    Having said that many fans will want to buy anything their band produces and will be happy to pay top dollar, especially if the profits go straight into the band's coffers. And there's still many of us who like to wander around music stores!
    The secret to success is probably the effciency of the dispatch system being operated. I have to say that my experience ordering online from the Buzz store has been largely trouble free.

    Btw Gerry, I spotted an attractive lady with Russell at Ronnie Scotts the other evening and wondered if it was you! I left some complimentary tickets for the London Eye but I think Russell's schedule was a bit hectic. Hope you enjoyed London anyway and please come back soon.
     
  5. Russ

    Russ Moderator Yellowjacket

    Frank,
    > Btw Gerry, I spotted an attractive lady with Russell at Ronnie
    > Scotts the other evening and wondered if it was you! I left some
    > complimentary tickets for the London Eye but I think Russell's
    > schedule was a bit hectic. Hope you enjoyed London anyway and
    > please come back soon.

    My wife indeed or I'd be in serious trouble! Thanks again for the tickets, Frank. That was an exceedingly kind gesture.
    all the best,
    Russ
     
  6. Frank

    Frank Esteemed Member

    My pleasure Russ. I sure don't want to get you in trouble!
    Hope you both had a great time.
     
  7. Paco

    Paco Active Member

    Gerry,

    You guys are in a GREAT position. You have wonderful support of the Mr Love and crew pushing you to the next level, AND a 100% YJ owned product in Mint Jam. On helps to drive the other in both directions. If you are ready to spit VOLUMES on this topic, just let me know. I've worked with a number of Artists in all three situations...we may want to do this off line though...your call.

    Pat Conneen
     
  8. Mr. Vladimir

    Mr. Vladimir Esteemed Member

    I know of several musicians who are producing and selling their own CDs. None of them are complaining that they are worse off than being with a large record company.
    By the way, has the Buzz Store ever considered approaching and selling to the retailers directly, so that the CDs will also be available in the stores, or would it be too difficult to have to deal with half-witted store purchase managers? I guess I asked and answered the question myself. /common/emoticons/grin.gif

    Mr. Vladimir

    > On the way home from Europe this week, I read an interesting
    > article in the American Airlines in-flight magazine. The article
    > was highlighting several bands and musicians who have
    > side-stepped the large record company path in favor of
    > self-producing, or signing with smaller boutique labels, or a
    > hybrid of both (like Yellowjackets). Each of the artists was
    > enjoying a better career, and making more money for their
    > efforts. It was such interesting reading, and articulated all
    > kinds of creative ideas...I wonder if anyone on this board has
    > had a similar experience, or knows of another band who has
    > re-defined the business of music. If so...please share. This is
    > a topic of great importance, and perhaps many people here on
    > this forum could be helped by example.
    > gerry
     
  9. Geraldine

    Geraldine Administrator Staff Member Thread Starter

    Our experience has been that most stores need to order from distributors, and are not set up to order directly. The retail stores require long terms for payment,(sometimes up to a year) and they require that there is a provision that merchandise can be returned if it doesn't sell. So far, our terms have been COD, no returns. WE just aren't equipped to handle the paperwork, or the bill collection that would be required to conform to the industry retail standards. I once extended credit to a retailer as a good faith gesture because he had been paying COD. Once I extended credit, the guy never paid us until he needed more product....then he coughed up payment which was 6 months late.

    Having said that, we do have a handful of independent stores who specialize in hard to find music. They are quite happy to send us a purchase order, receive the merchandise COD, with a stipulation for no returns. They order small quantities from us, from 5-20 Cd's and we ship them out, get our money and it is a closed deal. AT this point, if someone comes to us, we are happy to sell under those terms. I personally believe that the entire industry could be transformed if retailers were not allowed to return product. I think the industry would be a lot healthier if the retailers maintained the burden of markdowns when something did not sell. I"m not sure why the industry runs that way...does anyone know???? Right now, if a record doesn't sell, it gets returned, and the royalties get deducted from the artists account. So, ultimately, the artist ends up paying back their earnings from previous recordings at the same time that they are hopefully getting paid for current recordings. Recently, Yellowjackets received a royalty statement for $.01 which included returns for the very FIRST Yellowjacket recording....come on folks....how much money did that company spend to send out that check, prepare the report, and what about the postage for the envelope????? It is beyond my comprehension how all this works...

    Of course HeadsUP is distributing Mint Jam outside the US, and Time Squared is a normal record label product, available in stores worldwide, and for the 2004+ holiday season, Peace Round will be distrubited by HeadsUP....which has proven to be an incredibly hard working, and honest company.

    gerry
     
  10. ian gordon

    ian gordon Guest

    Hi Gerry
    It looks like online sales via the site for Jackets is the way to go. It's rather like inventors that put their heart and soul into a creative product and only get 1 or 2% royalty payments for all their trouble... really not fair with the middlemen getting all the profits! Good to hear that Headup will puss Peace Round as everybody need to hear this superb piec of work
    Cheers
    Ian
     
  11. Frank

    Frank Esteemed Member

    Since you are in control of your own 'music store' here have you thought about putting 1 or 2 complete mp3 versions of your songs up? This can increase return visits to your site, and research is showing now that giving away songs (like MP3.com ) does not hurt sales. In fact it may actually be increasing sales of CDs. Consider that a large percentage of the visitors to the MP3.com site, for instance, are really attracted to MP3 because it's free. They are not looking to spend money, so they probably won't spend money. However what they WILL do is distribute music. And this is how other people get to hear and become interested in music they wouldn't normally listen to. mp3.com can set up a page for you with biographical information. In other words you might choose a handful of 'singles' from your CD as giveaways to upload, with the idea that you may drum up some additional CD sales from people who would not otherwise be exposed to the jackets.

    Just a thought.
     
  12. Mr. Vladimir

    Mr. Vladimir Esteemed Member

    You might want to have a look at AEC One stop. It's a wholesaler, I think somewhere in L.A., who specializes in exporting CDs from the U.S. YJ CDs are also listed in their catalog, and as far as I'm informed, they do not accept return of merchandise. I can get their e-mail address for you, if you like.Like Mr. Anatole, just a thought. /common/emoticons/grin.gif

    Mr. Vladimir

    > Our experience has been that most stores need to order from
    > distributors, and are not set up to order directly. The retail
    > stores require long terms for payment,(sometimes up to a year)
    > and they require that there is a provision that merchandise can
    > be returned if it doesn't sell. So far, our terms have been COD,
    > no returns. WE just aren't equipped to handle the paperwork, or
    > the bill collection that would be required to conform to the
    > industry retail standards. I once extended credit to a retailer
    > as a good faith gesture because he had been paying COD. Once I
    > extended credit, the guy never paid us until he needed more
    > product....then he coughed up payment which was 6 months late.

    > Having said that, we do have a handful of independent stores
    > who specialize in hard to find music. They are quite happy to
    > send us a purchase order, receive the merchandise COD, with a
    > stipulation for no returns. They order small quantities from us,
    > from 5-20 Cd's and we ship them out, get our money and it is a
    > closed deal. AT this point, if someone comes to us, we are happy
    > to sell under those terms. I personally believe that the entire
    > industry could be transformed if retailers were not allowed to
    > return product. I think the industry would be a lot healthier if
    > the retailers maintained the burden of markdowns when something
    > did not sell. I"m not sure why the industry runs that
    > way...does anyone know???? Right now, if a record doesn't sell,
    > it gets returned, and the royalties get deducted from the
    > artists account. So, ultimately, the artist ends up paying back
    > their earnings from previous recordings at the same time that
    > they are hopefully getting paid for current recordings.
    > Recently, Yellowjackets received a royalty statement for $.01
    > which included returns for the very FIRST Yellowjacket
    > recording....come on folks....how much money did that company
    > spend to send out that check, prepare the report, and what about
    > the postage for the envelope????? It is beyond my comprehension
    > how all this works...

    > Of course HeadsUP is distributing Mint Jam outside the US, and
    > Time Squared is a normal record label product, available in
    > stores worldwide, and for the 2004+ holiday season, Peace Round
    > will be distrubited by HeadsUP....which has proven to be an
    > incredibly hard working, and honest company.

    > gerry
     
  13. Russ

    Russ Moderator Yellowjacket

    Frank and Ian,
    Your suggestions on ways to expand awareness of the band's music are most appreciated. Both are intriguing ideas which we will explore.
    thanks so much,
    Russ
     
  14. miK.

    miK. Esteemed Member

    Re: MP3.com buyout

    MP3.com was recently acquired by CNET and it looks like they are planning on dumping ALL the artist's music sometime after December 2nd. Some people are calling it a modern-day "book burning".

    http://www.theregister.co.uk/content/7/34009.html

    According to the article, CNET.com's acquisition only extends to certain "specific assets" relating to MP3.com's domain name and back end file-serving technology, not the site's massive file MP3 music file archive, which will be destroyed sometime after December 2, 2003.

    Orlowski writes:
    "Not since the Great Leap Forward has there been such a destruction of the
    commons. Back then, for political reasons, millions of books were burned.
    Now, for very sensible commercial reasons that we must not question,
    millions of MP3s will be lost to the commons. You have precisely seventeen
    days to grab the good stuff."
     
  15. Rudy

    Rudy Administrator Staff Member

    Re: MP3.com buyout

    I'd hardly call that a "book burning". It's just another case of "corporate America" at work. The problem is that free sites just can't afford to operate for free anymore. Selling advertising just doesn't work. What C|Net wants with it is beyond me...I didn't think mp3.com used any special "back-end server" technology. Quite frankly, I don't like C|Net to begin with...they took over ZDNet, which just turned more generic and "spammy" after they got ahold of it. (The originators of ZDNet, originally Ziff Davis, took all their reporters and splintered off into their own new family of websites.)

    It's sad to lose it, but not unexpected. The only possible grass-roots effort, sad to say, would be some other kind of "file sharing" arrangement. Or have these artists shell out a few bucks for their own websites and do their own self-promotion. Some enterprising individual would create a directory of these artists. But who knows? If there's a void, chances are someone will fill it.
     
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