FACE TO FACE WITH THE MILLENNIALS. UK MUSIC INDUSTRY

Face To Face With The Millennials

Terry McBride takes part in a very special music business initiative. Challenged to put his philosophy into practice, Terry will not only debate his ideas with fellow professionals but in a unique experiment, be confronted with an up and coming British act for whom he will roadmap a path to success live on stage.

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Event Transcript

1. Why Experimentation Is Key – Terry McBride

 A Keynote Summary:

Keith + audience

Who owns the song?  Labels, publishers and writers would claim they do, however, we at Nettwerk take the view that the people who own the songs are the people who consume them.

I look at this debate going on in the media about the music business.  Physical sales are down – I think it’s 5% –  this year it’s more like 15%, and digital sales – gross dollars – is not making up for that difference.  The last time I looked, any company that had a bottom line focused on net profit, not on gross dollars.  I for one know that the profit margin inside the digital space is about 300% of that of the physical space. So that tells me at a certain point you’re going to hit a tipping point where physical continues to go down more than digital goes up and yet the company becomes more profitable.

We saw we were never going to win this battle of litigation, we were never going to win a battle of legislation.  I believe that legislation works in a business-to -business relationship, as that can change behaviour, but legislation or litigation I have yet to see work in changing the behaviour of millions to tens of millions of people…

About three years ago, Nettwerk began to defend a family in Texas from a litigation suit from the RIAA, we’re not doing it to win a copyright case we’re doing it to say “suing our customers is bad for business…”

Nettwerk is a member of RIAA and they do a lot of really good things, unfortunately this one I think is not such a good idea and unfortunately they’ve done it to tens of thousands of people and have created a complete separation between the creative community and the community that consumes them.  That’s really unfortunate, probably one of the biggest PR disasters I’ve ever seen.

The generation that is currently running the music business is not the majority of the generation that is consuming the music.  The way that the Millennials think is very different than how the generation running the music business thinks.  You see, the Millennials think more like the Asian culture where music has always been part of their culture and is owned by no one and is shared and consumed by everyone.  It’s part of their culture, not part of their commerce.

The West’s problem with China is that they view the free use of music as piracy.  Well, they’ve been using free music for thousands of years – they don’t view it as piracy, they view it as their right to share culture.

What is the value of free?  In the digital space anything that can be copied has zero value, anything that’s scarce has huge value.  So what’s scarce?  Well you can’t copy an artist, so the actual person – that essence – is scarce, so access to that essence is scarce and has huge value, so you can build a whole platform around that –  you can create a brand and all the various verticals around that brand and have those be part of what you build by giving away music.

A very simple example in an ‘old school’ way of looking at things, is Stateside… synchronizations within TV shows.  There’s usually quite a little argument between the publisher, the master owner, usually the record label, and the artist manager who wants this to happen about how much this show should pay to license music.  And you’ll have the master owner and the publisher both wanting most favoured nations so if one gets $2500, then the other one gets $2500.  So when you the manager say you want to give the master away free to get a chyron* and the publisher’s going ‘well no we want $2500’ then the chances are that fractured copyright is not going to get used in that TV show.

Well let me tell you something, if it’s given away free and is used in that TV show and you have a chyron, chances are you will sell more digital downloads in the following week with more economic value for you than that that sync fee.

I’ve seen songs given away for gratis in about a ten week period sell 170,000 downloads at 70 cents a time – the value of that placement was over $100,000.  A very big publisher stateside will not allow their tracks to be given away gratis – lost opportunity.

If I go to Avril (Lavigne) and the latest stats on her in Asia: 28,000,000 full album downloads or streams, 2.6 million ringback tones, which are the only thing you can control within China, 250,000 CDs which is not too shabby, so you’re looking at a 1 to 100 ratio, for every one you sell, 99 you didn’t sell.

But an artist who knows that – we run analytics on her website and see where everyone is coming from around the world – when they come to consume Avril, (and in the next few months we will create a Mandarin website, that is all in Mandarin, running Mandarin advertising), we will make a ton of money.  We will, because about 40% of her traffic is coming from that part of the world and hopefully we’ll have that up and running for when she tours seven different arenas in seven different states which no Western artist has ever done before.  About 40% of her worldwide economic value from intellectual property comes from Asia, so am I all that concerned about North America?  Am I concerned about Germany?  No – sorry, we’re going to spend a lot of our time in Asia.

Her 5 week tour of Asia will create more income for her than her 16 week tour of North America.  What does an artist want to do –  work 16 weeks or work 5?  Most artists are inherently lazy, they will opt for the five!

[from the floor] What about Brazil and India?

Brazil is awesome, but the thing with Brazil is it’s not safe to go there.  Literally if we go there with a major artist we need to go with bodyguards with machine guns, at a certain point artists say “this isn’t worth it” but what we did for Brazil as it was number 3 on our Google analytics was this.  The major language there is Portuguese, so on the first single we did it in 8 languages, we didn’t do it for Portugal, we didn’t tell them that, didn’t want to upset them as they’re very passionate people [laughter] but we did it for Brazil.

And as far as India goes we tried to do a Hindi version of it, but it did not work.  She tried two times, she had a guru with her trying to get her through it, we had someone else sing, but it’s the syntax it just wouldn’t work, she tried! [Laughter] ‘Hey Hey You You’, it just wouldn’t work, but she tried, really tried as that’s a huge mobile market place…with a phone technology that is ahead of anything in the western world.  You know, I think a Bollywood artist is going to have to cover that in a very Bollywood way, because the way it was sounding wasn’t authentic, it didn’t sound real, it sounded like marketing, and whatever you have to do with an artist it’s got to be real.

Fans will sniff out a marketing plan a mile away.  It’s got to be authentic.  And that relationship with your fan is the most important thing.  Now the great thing about fans these days is that they can be your record label, they can do your videos for you for 1/100th of the price you used to pay, they can do you radio plugging for you, they can design your t-shirts, they can even do your album covers…They can even do your mixes for you.

You know I’ve been thinking recently it would be really really cool to take one of my major artists and release the stems, the actual multitracks of the song, before I release the song, so there’s no preconception of what the song sounds like… so here’s a 24 track stem of it… drop it into GarageBand or whatever you use and make your own mix.  Then put all those mixes into some kind of social forum, where everybody can vote on those mixes and the best mixes rise to the top.

And the best mix that rises to the top, you take that along with the artist mix and you service both to radio, and I’m willing to bet that the phones will react better to the crowd-sourced mix than they will to the one the artists want.

Let’s go back to 1982, the beginning of what we’re calling the Millennials, the introduction of the CD.  Now I’d like to say in an ironic sense that that was the beginning of the end for today’s music business.  And it’s not because they created a perfect digital copy with no protection on it… it was the beginning of a cultural shift in the consumption of music.  For the first time a 2 year old had the power of the stereo because they could say “again, again, again”…Trust me – I have kids and have witnessed this and if you do not play the song over and over again they will harass you until you do…!

This represented key shift.  When I was a kid everything was pushed at me, it’s a radio station, it’s a vinyl record where you’re not going to play the same song again and again, or a cassette tape you’re not going to rewind again and again and again.  So everything was just pushed at me and I accepted that, but starting from 1982 onwards they could pull, they could dictate what they wanted, how they wanted and when they wanted.  Fast-forward 15 years later, the late 1990’s and you start to see that behaviour come into the market place…

That was the most profound thing about the introduction of the CD it changed a whole pattern of behaviour, and that’s a very key part as to what the Millennial generation is.  They’re also not about owning, they don’t need to own things, what they do want is to have access to things, how and when they want.

Part of what I talk about in the report is a price tipping point and if you look at the current data, it’s 1 out of 20 downloads that are paid for…So inside America where we use the 99 cent model, I’d say the actual value of a download is a nickel – 1/20th of that.  So if I was getting paid for 100% of the marketplace that’s a nickel each.  It’s fascinating because eMusic which is only a subscription service and only represents independent music, has in North America right now, 12-14% of the digital marketplace.  Their average sale price per song is around 25 cents, and the interesting thing that is happening there is that 60% of their sales are full album downloads, not individual tracks.  One of the biggest issues with iTunes is that it’s mostly individual tracks, with a ratio of approximtaely 85:15 of single tracks:full albums.  I could be slightly off as it changes constantly, but on iTunes, people don’t buy a lot of albums, they buy a lot of songs. On eMusic where the price is lower, they buy a lot of albums…

I think that there is a price tipping point, I’m willing to guess it’s around 20/25 cents.  The reason I say that is how much time does a kid spend to download those songs?  It doesn’t take long from a p2p server, but they still have to load it into something, listen to it to make sure it’s not got a Trojan or some other junk software; they also might not be getting the right meta data.  At what point is it more convenient for them to buy it compared to the time they spend?  These kids look at time as value.  If they could get amazing download quality with all the meta data for 25 cents a song, maybe $2 an album, chances are you’d see a huge shift from the illegal to the legal.

[from the floor]  Can we look back at the idea of fans owning songs?

OK, if I was to say Fleetwood Mac ‘Rumours’ who can think where they were the summer that came out? [one or two hands go up, Laughter] OK, a lot of Millennials here!  OK, Nirvana – does that bring anymore hands up? [more hands go up].  OK, a bit more.  So the thing is, you attach emotions to songs.  You can sell a million of the same song and you’ll have a million different emotions attached to that song because you’ve personalised that song, you’ll play that song over and over again to the annoyance of people around you, because that’s what passionate music fans do.  Not casual ones but passionate ones.  And that just becomes a bookmark to your life…when you hear that song you instantly remember your emotional attachment to it.  It’s an emotional connection and that is the value of the song.  If you have no emotional connection to it, then it has no value.

You see artists that don’t sell as many records but sell an immense amount of concert tickets, could it be that their songs have a much greater emotional factor to them, a greater glue to them?

I’m gonna talk about tribes a bit.  Tribes when you grow up tend to be around 10-20 people, they tend to be your peer group that as you grow up you tend to keep in touch with for most of your life and usually in each peer group you have the early adopters, the kids who have the first bell-bottoms, or the first skateboards or the first phone with the first bling on… and they influence their peer group around them.  That is your tribe.

Now tribes are very important to understand as chances are the tribe will all, within a certain time period, like the same type of music, usually started by the early adopter within that tribe. Especially if it’s a new sound.

I’ve come to understand that if I love music – not just like it but love it – then there’s a tribe out there similar to me that will love it too, so understand what your tribe does by understanding yourself.

So if I’m an artist, what do I like?  How do I consume music?  What do I do from when I wake up to when I go to bed, 7 days a week?  Begin to understand who your audience is, begin to understand yourself and the psychology of marketing has everything to do with marketing to your own tribe.  And the chances are that same tribe exists everywhere…

All you really do inside the marketing of music is trying to understand that tribe and if you’re a band, you go and play with like-minded tribal bands because the chances are if you all play together and there’s a likeness with your music and one of you has success, the high tide tends to float all of your boats.  You know that was the Seattle scene, that was the Montreal scene… all these bands played together… so when one has success they all has success.

All that is tribal marketing and it is something that has a lot to do with lifestyle and now that music is more social and more spread and is not coming from filters such as radio or TV, those tribes are more important for you to understand, there are no longer gatekeepers.

You can’t look at an artist as being just one vertical, you have to look at them as a brand.  A lot of what I talk about in the report is about the artist as a brand, and from that brand comes many different verticals and the verticals can be anything from a clothing line, to concert tickets to fragrances to sponsorships.

You know if you had a band that gave away all their music free, but all of a sudden were selling 5000 tickets a night, you would have sponsors paying hundreds of thousands of dollars to be associated with that brand.

The artist is a brand and if you understand that philosophy and even work with brand alignments, so you align your brand with another brand, I’d say like Eddie Vedder with Al Gore – that’s brand alignment – you’d never see Eddie Vedder with Exxon but you’d see Eddie Vedder with Greenpeace, so you use the economic value of Greenpeace to raise your brand.

The artist is a brand whether they like it or not.  They are part of a lifestyle of the consumer that consumes them and as such you’ve got many different verticals to work…ways of monetising behavior that right now is seen as free and ways of making hundreds of thousands of dollars from that behaviour.  It’s all about imagination.

[from the floor] I’d assume that this isn’t relevant for certain types of music, a folk band wouldn’t sell as many T-shirt as a band aimed at teens?

I know that the Rolling Stones, U2 and The Police do far better merchandise sales than any young indie band does, like way, way past it.  I think if you have great designs adults will buy it too, I think adults will consume cloth, they just want a higher quality cloth.  The great thing about the older audience is they have more money… I actually like the fact that Nettwerk has a few older artists because they have higher ticket prices and higher merch sales – might have less people but there’s a better economic model…

But it’s understanding that an artist is a brand and understanding all the different verticals that you can create around that and that’s what we’ll do this afternoon, understanding how you can monetise free and that free has everything to do with monetising an emotional connection and that really is the value of music, that emotional connection.

*Chyron – information scrolling on the bottom of a broadcast.  In this instance, it could be a URL to an artist’s website, MySpace page or whatever.


2. Face The Facts:  UK Market Update

MTV Presentation – Philip O’Ferrall, VP Digital Media, MTV Networks, on a global brand’s perspective on Millennials:

Philip O’Ferrall made a short presentation, looking at his company’s research into the Millennial generation.  In a graphic example of how fast-paced the changes we are witnessing in the music industry are, Philip explained how he had originally planned to show a short film made by MTV just 4 months before, but having looked at it again last night decided that it was already out of date.

In essence MTV’s research backed up a lot of what Terry had to say – gone are the days of people laid out in front of the telly, mindlessly soaking it all up.  Instead, MTV has become the background noise to the kid’s online activities, whether that is being on Facebook, instant messaging each other or playing games.  80% of children are online every day now, that is their main preoccupation.

So MTV has had to adapt.  Gone are the days when they were just in the business of showing music videos; Millennials want and demand to have access to content whenever and wherever, hence MTV now works across all platforms generating content for online and mobile as well as the traditional TV channels.

MTV is also now more proactive in seeking out and breaking bands and looks to turn bands into brands themselves.  They have regular new music sessions and aim to adopt bands early on in their careers, that way they can align themselves with the band and it gives some degree of equity in the band’s success.

MTV now aims to help new bands get going and get promoted, in turn MTV not only has a relationship with these acts if and when they breakthrough but it also creates value for MTV’s brand as they are seen to be tastemakers.

Popscores Presentation – Peter Ruppert, President, Entertainment Media Research, on the importance and influence of Millennials:

Peter made a short presentation to explain how his company’s Popscores research as used by major record labels and radio stations was a valuable tool for seeing trends.

What Popscores does is measure the emotional connection listeners have to songs, testing against several age groups, teenagers, twenty somethings and the over thirties.  When they test new songs, they first give the focus groups all the information they have about the artist, maybe even describe the songs, but don’t let them hear the actual music.  The groups then fill out a response sheet, with how original, controversial, etc the artist is.

They will then play the actual music, and it is noticeable how often the results change.  Edgy artists can become safe, dull and average, and this shows that when it comes down to it, the music cannot lie (see slide 4 on their powerpoint presentation, link below).

What they regularly find with songs that go onto be hits is that they score very well with teenagers and the over thirties, so on their charts, these songs resemble doughnuts.  Hit doughnut songs were very popular a few years ago with acts such as Boyzone that would appeal to both kids and mums. (see slide 3 on their powerpoint presentation, link below).

There has been a trend away from this recently though, after a couple of breakout acts such as James Blunt, with more serious music aimed more at an adult crowd, and Peter believes that it is this that has driven teenagers away from radio and onto websites such as YouTube.  Targeting adult markets is great but for the mass market you need an eye on the teenage groups.

Teenagers fall in and out of love with bands a lot faster, but if a teenage act goes on to have staying power it can slowly cross into older markets that have a stronger, longer lasting emotional connection to acts and can keep them going for years. (see slide 10 on their powerpoint presentation, link below).

In summing up, Peter was keen to stress that although they carry out these tests measuring emotional connections to music, they are not telling the industry what works and how to create by-numbers acts but providing a conduit for the consumer to tell the industry what they really want.

Here’s their powerpoint presentation.


3. Setting The Record Straight

Tom Robinson – Broadcaster and Songwriter, in conversation with three Millennials:

Tom Robinson (BBC 6Music Presenter) – Just quickly to say why this is very interesting for me personally, I work in radio and radio’s importance as a taste maker and gatekeeper is diminishing.  Traditionally, record companies had pluggers who would send you music, you’d play that music, and the listener would go into the shops and buy that music.   That’s how it has always been and to an extent still is.

But we’ve seen with the cheapness of digital production that it’s possible to make great music on a low budget, and there’s far more music available than we have time to play and now bands are bored of waiting for radio to play their music and can broadcast it themselves on MySpace.  So nine months ago I went to the [station] controller and said lets do a show where we just play music found on the web and directly introduce listeners to artists and the way we’ll find out which are any good is we’ll ask the listeners.

I don’t know how artists will make money in the future and hopefully we’ll find that out, but I do know that it will all depend on listeners and fans on meeting producers.  So this is a chance instead of speculating on the young adults to actually meet three of them who I will ask to introduce themselves now.

Richard – My name is Richard Fattal, I’m a graduate as of today and I’m signing my life away to an investment bank as of Monday.  I’m an avid music fan and have been trying to start an online social music business start-up.

Anna – Hi, my names Anna Goss, I’m kind of cheating being here as I started managing a band three years ago and I still do that but I got into music as a consumer and still see myself as that.

Chris – Hi, my names Chris, I work as an economist for the PRS but will put that hat aside for today, I’m 24, only been in music for 3 months or so, genuinely know nothing but don’t tell my boss.

TOM ROBINSONOK, one of the most striking things Terry said was this idea of music being a bookmark to your life, so I want to ask each of you what is your bookmark?

Richard – That very much resonates with me, what Terry said about tribes was very relevant, within my friends we mainly listen to house and hip-hop and we have a few early adopters who are on websites and blogs, like Hypemachine finding new music which they’ll burn onto CD, so we have these connections when we go out we’ll have these mixtapes/CDs which won’t be albums but individual tracks and you connect those CDs with memories.

Tom Robinson – Which artists?

Richard – I’m really into Ben Harper, and I’ve been listening to the Coldplay CD a lot, my mum got me into hip-hop when I was 13, like Tupac and Biggie, which is probably not the norm!

Anna – I actually dispute what Terry was saying about 2 year olds not being able to use vinyl as I remember being bought a copy of Sergeant Peppers on tape as I was wearing out my Dad’s vinyl, then I remember listening to Motown in the car as a child.  Then the first band I thought of as mine were the Dumb Dumbs, then I was one of the early adopters at my school, one of the first to have an iPod, get into Jeff Buckley, I was amongst the first into Radiohead.

TOM ROBINSONAnd now is there anyone on your radar of the same stature as Radiohead or Jeff Buckley?

Anna – Now, I’m mainly listening to house music, no one in particular resonating with me, I’m listening a lot to the new Data single, who is a French house music produce.  There’s an artist called Gotye who are on Lucky Number records that I like but no one in the rock music cannon is really pushing my buttons at the moment.

Chris – I think earliest social memory of music is Verve’s Urban Hymns – it was a social thing, my friend introduced me to.  Since then Foo fighters, I’ve bought everything of theirs, and I like Counting Crows.

TOM ROBINSON OK, so expanding this to your circle of friends do people listen to music, just for music’s sake or is part of a multitasking activity, in the background?

Richard – I never understood this just sitting down and listening to music; tried it but for me it’s always an accompaniment to other things, Facebook, TV, Playstation, probably most listen to it in the car.  Not enough time in the day to just chill to music.

Anna – I went round to a friends house, they paid no attention to the music, it’s ever-present but it’s just there but not the focus.

TOM ROBINSONI think the big difference between our generations was we could only afford one LP a month and then you would have to go round you friend’s house with a record player so we’d share it.  Now how hard is it for you and your friends to get a certain track if you just want to hear it?

Chris – Now to get the music it’s very, very easy but we don’t tend to consume together, I can get anything I want from a variety of sources, some my employer wouldn’t appreciate, but what you end up with is music being this very personal, insular thing.  I listen to what I listen to, I don’t care what you want to listen to, we all have our own headphones.

TOM ROBINSON So do you think headphones have stopped music being this communal thing you listen to, or had it already gone that way?

Chris – At the risk of sounding controversial, I’d say us Millennials are a selfish bunch, we’re so used to getting what we want, when we want, on demand, they can be consumed so quickly there’s almost no consequence to their consumption.

Anna – I’d disagree with that.  If I hear a song that I fall in love with I’ll send a Hypemachine link to my friends.  I send my friends links to Hypemachine, YouTube because I do want to share – this explains the rise of Myspace and Facebook and taking it further, Twitter or Tumblr.  I’ve noticed lots of people taking notes today and I’ve been sending Twitter updates to my phone because I want to share with my friends what I’m doing, and what all these grown ups are saying.

You still want to share with friends you just don’t necessarily all get together to do it, you just press send.

Richard – It’s only individual to the extent that you get satisfaction from being the first adopter, and you only get that by sharing it with friends.  I guess it depends on your personality but there are certainly some people that love to be looking up this or that band and sharing it with others.

TOM ROBINSONYou were talking about the online sources, where you’ll out what’s hot.  Where do you get these tips?

Anna – Every day I read blogs like Discobelle, Big Stereo, have  them all as RSS feeds.  Everyday, I just press download, download, download.

TOM ROBINSONDoes this mean we run a risk of information overload, we’re assaulted by all these feeds…too much with too little time?

Chris – Yes, absolutely, I certainly have not enough time.  Last.fm is great for me as it tells me what I like, I know what know but great to have recommendations.

Richard – So many music discovery sites, especially these kind of radio sites and they’re great, but out of all my friends none of them use them yet, and these are the kind of people that like to share music and will share a CD.  There are 2 or 3 friends that will swap one or two burned CDs each month, but not one of them will swap music over iLike or Facebook.  It just hasn’t become that ubiquitous, sharing music over the net.

TOM ROBINSONWhat proportion of the music you consume is paid-for and what is acquired by other means?

Anna – I’m in a very lucky position as I know lots of people at record companies so I get lots free, so I’m not a typical sample, among people I know around, 10% is bought.

TOM ROBINSONAnd why do they buy that 10%?

Anna – Probably it’s what they can’t find online.

TOM ROBINSONI wonder if you could extrapolate this out wider because out there in the web people don’t pay for anything anyway.  Most services that involve paid subscriptions are doomed; would you pay for anything online?  Not just music but newspapers…anything…will they just be naturally free?

Chris – I think newspapers will naturally be as there’s just so much info out, for music there needs to be added value.  I can get it for nothing so what added value am I paying for, for example this weekend I was playing at a wedding, I wanted to send a tune around to the band, now if I bought it off iTunes I couldn’t send it around so why would I pay for that.

TOM ROBINSONEver any circumstances you’ve downloaded for free and then bought it afterwards?

Richard – Yes, though I think I’m rare in that I pay for a service which allows me to download pirated material faster and more efficiently but if I find something that I have a connection to, I may go onto iTunes and buy it.  I did recently buy the Coldplay album despite already having all the tracks.

TOM ROBINSONWhy did you buy it?

Richard – Sheer altruism, I’m just a nice guy (!)

Anna – I’ll buy heavyweight vinyl and I’ll try to buy independent artists, but I won’t pay for Coldplay, I’ll get it off someone at EMI or from BitTorrent.  Coldplay are rich enough, they make money off touring, they don’t need me, but say someone who is released on Wichita, I’ll buy that record as I want to keep Wichita in business and want to keep that artist in business.

TOM ROBINSONWell I was going to say, you are a manager, do you want your artist to have an income stream?

Anna – Yes, but at the same time I know it’s not their right, it’s no one’s right to get paid for their recorded music anymore.  You have the option, if you give people the option it’s their right to take up on it at the moment.

TOM ROBINSONSo on those momentous words let’s take some questions or comment?

AUDIENCEWas Terry correct about the importance of metadata and price tipping points?  Would you convert to legal downloads if it was cheaper?

Richard – Yes I do think there is a convenience factor, the reason I buy things from iTunes is that they are just there, but it’s not really a question of looking through my iTunes and going ‘Oh no, all my metadata is screwed up’, it’s inconvenient to have to retype album names but I don’t think it’s a tipping point.

AUDIENCEI’ve seen a lot more music on mobile phones, and kids at school swapping tunes by Bluetooth on the bus, what do you think of that?

Anna  – Yeah fair play.

AUDIENCE How do you think artists should support themselves if you’re not paying for their music?

Chris – Keep making good songs, and keep cashing in anyway you can.

AUDIENCE Yeah, but you’re not paying for them, so does it matter to you?

Anna – We’re watching the films their music is sync’ed in, we’re buying the NIKE+ runs that are only available in iTunes, we’re posting on blogs, we’re buying their t-shirts and going to their shows.  The money is not in recorded music anymore, you all need to come to terms with that, as it’s getting really boring now.

Chris – The value added now has to be more than the song because at the moment I have the choice of paying something or paying nothing, so what am I getting that won’t make me look stupid in front of my friends.  What are you giving me that is better than free?

TOM ROBINSON – And do you see live shows?

Chris – Yes

TOM ROBINSON – And pay for them?

Chris – Yes

AUDIENCE If you’re managing a band and they become successful, do you encourage people not to buy your band’s music?

Anna – My bands, it’s wonderful if they want to buy it, but they have the choice and I’m not going to stop them making that choice, that’s just going to make them feel down about my band.  As Terry said, if you go around suing people that’s not making them feel good about themselves.

Music is there to make people feel good about themselves, I want people to feel good about my band.  That might mean them paying for things, it might not.

AUDIENCESo do you earn money as a manager?

Anna – Yes

TOM ROBINSON – So what percentage do you take from?

Anna – I take 20% like most managers.

TOM ROBINSON – But where do you take that 20% from?

AUDIENCE –  Sorry I just wanted to know…do you support yourself, pay your own rent, run your office and expenses from being a manager?

Anna – No, but then I’m absolutely fine with that.

AUDIENCESo I was wondering..is it also OK to stalk a band as that’s semi-legal?  I understand it’s a weird question but it’s within your right.

AUDIENCECan we stop having a go at these people!  These people have come here to give us their opinion, you know this is the life they’re living, this is what they’ve grown up with, and they’ve been able to have music free.  We should be listening to them and coming up with alternatives rather than having a go at them.

[Applause]

Richard – Personally, having lived in China for several months where there is no understanding of intellectual property whatsoever, it’s very much a cultural thing and I’m not going to apologise for my generation for being devoid of any moral sense of intellectual property but I think there is a responsibility at an ISP level.  Record labels going after people with large iTunes libraries are farcical.

TOM ROBINSON –  And if I could just make a personal declaration before we take the next question…Before I worked in radio, I made 14 albums and now all the recordings to which I own the rights I’ve now put them all up for free, because it’s more important to me that people still hear music rather than getting 79p for one track once a month.  I now have a donate button and have made more money from that donate button than I made from record companies in the past ten years.

[Applause]

AUDIENCE You mentioned ISP’s earlier, does that suggest that if your ISP sent you a letter via the BPI you would stop downloading via p2p?

Richard – If I knew that they would cut off my internet connection, then yes.

TOM ROBINSON – Would you then just go to an internet café?

Richard – I think if that really happened, then I’d be at the barricades!

AUDIENCE – I work in radio and to me sound quality is an important factor, and this is a reason I pay for most of my music. Is that a factor in what you do?

Anna – Yes it is, I’ll buy stuff off Beatport if I want good quality, off iTunes if it’s just throw away stuff and on vinyl if I want really great quality.  But I do think it is more about song than the sound quality.

AUDIENCEMy question is based on ideas like Slicethepie where every fan invests, say £10.  Do you think there is still the need for a record label anymore?

TOM ROBINSONWell they are not artists, but as fans do you think there is still the need for record labels?

Anna – There’s a need for promotional channels, but maybe not a need for record labels.

AUDIENCE – Behaviour is a conditioned response, you grew up expecting to consume music in the way that you do, I’m interested in where have you think you picked up your behaviour from?

Chris – Can’t pinpoint comfortably, if I was to speak generally I’d say that technology enables piracy far more easily than anything else.

Anna – I started getting into music aged around 10 or 11 and discovered Napster at about 11 and a half.

TOM ROBINSON – OK, I have a quick question for Richard.  The music industry tends to use interchangeably the word ‘piracy’ to mean either people sharing music p2p and or people making copies of a commercial product and making shitloads of money.  In your book is one any worse than the other?

Richard – Yes, if you compare, erm… there’s a new directive that says that when you tout tickets, if you tout them at face value, then there are legal sites and a channel for doing it.  I think there’s not really moral equivalence for doing something not for profit, both are at base wrong.  If you believe in intellectual property but one is like more wrong, it takes that first offence and adds to it by making profit form something illegal.

Chris – There’s a reason that secondary tickets make a lot of money – there is demand at the last minute for these things.  If what we’re calling it is arbitrage rather than secondary ticketing then it becomes a fantastic principle that says price it better in the first place, and whether there is something we can do with that analogy I’m not sure.

TOM ROBINSON – Ok well, I’m sorry but we’re aware the afternoon has to finish at some point, so I just want to say on behalf of all of us thanks to these three people…

[Applause]


4. The Artist Road-Mapping Brainstorm

  1. INTRODUCTION

  2. QUOTES FROM TERRY MCBRIDE

  3. THE ROADMAP NOTES

  4. THE ARTIST MANAGER’S RESPONSE

1. INTRODUCTION

The road-mapping session begins with the day’s compere, Sam Shemtob (MusicTank), introducing the concept behind the brainstorm session, how Terry McBride would attempt to take the ideas he has laid out in his recent report and earlier keynote session and then use them to help develop a roadmap live on stage for an artist he has never met before.

The scene was set with Sam explaining that we had with us experts “spanning mobile, retail, live, online, merchandising, social media, branding, sponsorship, widget makers and computer games and more” plus representatives from the artist’s team including “the manager, the record label, press, promotions, online and live agent” who would be pitching into the process and how that once the process was over the artist and his manager would look at the ideas that had come up, work out which ones would work best and how to implement them.

Sam then introduced us to the artist and his manager.

Sam Shemtob – “Our artist manager is Amul Batra.  Amul was the general manager of Manchester-based Faith & Hope Records for 6 years, where he helped develop the careers of Mint Royale, who have just had a number one record, Morning Runner and Alpinestars.  He now runs Fwinki Music, which is an artist management and consultancy company.  He consults for Heist or Hit Records and also manages an eclectic roster of talent including The Answering Machine and BB & The Dead Dog.”

“He also manages one of the UK’s most exciting new talents, James Yuill, for whom a tangible buzz is now building.  James has bravely volunteered to be that artist whose roadmap we will shortly begin to brainstorm.  To tell you a little more about James’s career I’ll hand over to Amul.”

Amul then introduced artist James Yuill, explaining how at 26, he is still in Terry’s definition a Millennial and writes, plays and produces all his own material.  We learned that James had self-released his first album in 2005, before releasing a single on Chess Club earlier this year and has now signed to UK independent, Moshi Moshi.

We were played 3 videos, the first was for ‘No Surprise’ the single released earlier this year, then we saw ‘No Pins Allowed’ the next single released on Moshi Moshi in July and finally, we saw the video for ‘This Sweet Love‘ which is scheduled for release later this year.

Amul explained how he had come across James when his CD was being played in between acts at a North London venue Monkey Chews.  He tracked James down and went to see him live, where James gave him a finished copy of his 2nd album.  Although James had gone as far as pressing up a few copies of the album he hadn’t generally distributed it as he ‘wanted to make sure it was done properly’.

Terry, Amul + James

Amul –  “So we hatched a plan that was twofold really.  Initially, we wanted to make sure that James had enough money, so that he wouldn’t have to go back to work and could dedicate all his time to music.  And secondly, I really wanted to make sure that slowly but surely the songs from that record reached the public and built a mass fanbase within the media.”

After much interest they signed James to a publishing deal with EMI, that factored in James’ talents not just as an artists but as a songwriter, producer and remixer.  The deal also included an album of Library music.

With the crowd and Terry now familiar with James, Terry began the brainstorm session…

2. QUOTES FROM TERRY MCBRIDE

Every marketing plan has to fit the artist and that is why every marketing plan has to be unique even if it uses some same ideas.

The way consumers consume music, they don’t consume it as groups of 10 or 12 songs on a piece of plastic, they consume it as songs.

You are going to be a brand…

The minute a piece of music is released it is a worldwide release, so holding back for when you might tour in Japan, frankly is not commonsensical, it’s already in Japan.  The minute you release it, it is public property and you cannot control it.  What you can have fun with, though, is all the pieces you haven’t released yet and when and how you release it.

In response to a comment that the benefits of having your music featured in an advert were oversold…

Two years ago, extremely valid, but in the world of YouTube – it’s changed.  It’s radically changed.  There are ads that get more stickyness on YouTube than they ever do on cable networks…

…there’s a new revenue source from YouTube now, every time a video is played upon YouTube, it creates income for both the master owner and for the publisher.  So creating assets specifically for YouTube is now a new value chain and it’s called re-evaluating free.  I mean, if I look at Avril Lavigne, there’s about a $2,000,000 cheque waiting for her for all of her YouTube visits.

… that makes an artist very incentivised to make content specifically for what is viewed as free.

Your record company is your fans and your friends.

Never think that anything is too big, because if you do it is, but if you don’t and you don’t care and you just want to do it, that’s a philosophy you need to bring to this new style of marketing.  Nothing is too big, nothing is impossible, nothing doesn’t exist.  The word “No” is not part of this equation.

Basically, you put your personality into the culture and the cultural icons that you really like, you mash up other things within what you do, and then you allow your fans to take that even further.

Because you interact with your fans, start asking them questions like ‘hey I’m thinking of doing this, what do you think?’ just post it on your MySpace, you will get back ideas…

…you want this whole brainstorming to go out from a room of 170 people to go into a room of maybe 3 to 4 to 5000 people, and you never want this process to stop.

… albums are great, albums are a kind of bookmark for you, but albums are not relevant to most of the people in the rest of the world, it’s the music.  If you want to record a song tonight and release it tomorrow you can now do that…

…if you accept the fact that you are a brand you have just grown from being a musician to being a mogul and to giving Richard Branson a run for his money, you can be anything within the digital space.

The most important thing that an artist can have is to be real, honest and sincere and being exactly who they are. Those are the artists that I love to work with and you make the marketing plan around them.

 

3. NOTES MADE DURING THE BRAINSTORM SESSION

Throughout the session, all the ideas that were thrown up were quickly projected onto a screen behind the stage.  Below, find the actual notes that were projected, this should give you an idea of the breadth of ideas that were very quickly produced on the day and how the process developed.

–    James’ friends are creatives, vjs, musicians, filmmakers;
–    He likes French house, Warp, Justice.  Four hero-creating patterns, Radiohead Hail 2 Thief/all, Nick Drake, Tasmin Archer;
–    12 track album, no video game synchs;
–    James has seen his music in blogs, some requests for remixes;
–    Would be happy to release stems – beats, vocals;
–    Amul not yet pushed for remixes etc;
–    All been coming from James… authentic;
–    Internationall: Interest from Japan, q’s over worldwide deal, some meetings in West Coast, but concentrating on European release;
–    Publishing his 3 album deal;
–    Happy to try new languages;
–    James’ Brand:  Creative, geeky, hip, music supervisor, drinking Guinness while making music on computer;
–    Use Google Analytics to see who’s accessing your  web site  – A VERY IMPORTANT TOOL;
–    You have to let people know who and what you are;
–    James’ video carries emotional attachment, good strong visual will be remembered.  Maybe get the video out before single is released;
–    Try and monitor who’s liking what before deciding releases;
–    Get music out there asap to establish yourself;
–    Got MySpace – replies to every message – and Facebook. No Bebo, Flickr;
–    (Contest to find James’ lost laptop – has all the original stems.  A compelling story, though was 18 month ago. Something for press dept to consider);
–    Get a couple of new laptops? OK!
–    Video with James being stolen.. fans get involved with stealing James / his laptop;
–    Where are the Jones’ – was a community-based project, needs a good community platform – was all paid for by Ford…Project was done under CC.
Would EMI go for this if it could create new copyrights down the line?
–    (Maybe get a wordpress site, flickr, pull myspace feeds into your blog);
–    (Would you play just acoustically?  Would you play with other people? Yes, yes);
–    Think of useful tags – like Sufjan Stevens.  All about the language behind the web site – to move James up the Google rankings;
–    How about each of your friends create a piece of your video – unfinished pieces of content that can be mashed up.  More assets;
–    He had a fan do a graphic – after looking at some 3’000 MySpace pages (press angle);
–    T- shirt design – how about using the same mechanic i.e. MySpace – first artist to get fans to do all packaging;
–    Contest between fan version of album and James’ version (another asset);
–    As yet, no 5.1 mixes  – this will make it more convenient for someone to use;
–    Have 5 stem packages for MySpace (and 24 for others).  Maybe put 5 stems up for next release;
–    USB stick?  Another format for media to talk about.  To get as many people talking about it.  Designed like a Guinness tap, also the domain: wheresmyfuckingcomputer.co.uk – register it;
–    James was sourcing music-for-ads day job, while making music – of interest to the ad-industry (he escaped!);
–    Has a good ear for music –  trusted and respected as a music supervisor;
–    James’ causes – recycling, Guinness(!);
–    James willing to push local government for more recycling, increase recycling depots.  Do a recycling depot of your own;
–    Or get an ad done for recycling.  Maybe get Chris Cunningham on board?  And one more visual artist, and you’re tapping into a wider fanbase;
–    Recycle a Chris Cunninham video?
–    Create your own ads for Guinness, recycling (30 second widget with link back to James’ web page), wine, the cloud;
–    Competition for fan who finds the lost lap top – gets year’s supply of Guinness;
–    Or James creates a treasure hunt for stems for the track.  Person who gets most stems / points get to put their mix on the site;
–    Japanese equivalent of Guinness? (give them the ad if Guinness doesn’t want it);
–    Do video blogs of taking the ads into Guinness;
–    Fans to recycle Guinness?!  Guinness is a major polluter…
–    Nothing is too big, impossible;
–    Do 6 ads with friends, offer it to ad agencies.  Another press story;
–    Music will work with brands – low fi edge;
–    If 5 brands in the UK, will be 60 brands around the world that James aligns with.  Could be a new revenue source;
–    An expert was cynical about power of ads to launch music, or how brave they are;
–    Ads will lead to downloads when they run;
–    Terry says YouTube is a new revenue source.. (not for all yet);
–    Amul needs to build a team around James’ creative output – to increase the creativity;
–    James’ record co. is his fans and his friends;
–    James can become a sort of Andy Warhol if he wants – a collective that people buy into, are proud about and want to be involved in – uber fans;
–    Asset List: 12 songs.  Got Instrumentals.  Terry says do instrumentals for all tracks.  Mashup with an established band inside Japan? Acappella versions;
–    Try for at least 100 assets, all authentic – you.  Get library album in marketplace ahead of man album.  Create a T shirt line;
–    Ask your fans what they think.  Take brainstorm out of this room to 5,000 fans;
–    Have alter-egos – tall man slim.  James is pursuing this.  Thinking of re-doing the Grey album;
–    Try to have the world’s biggest cake fight – but would this be authentic to James?
–    If you do enough online you can get loads of different hits on google;
–    Remix contest…
–    Explore the man behind the lyrics…?
–    Terry wouldn’t recommend looking at what James might hate.  Is a tack that makes enemies, keep it positive – don’t focus on negative things;
–    Register a trademark.  A pain in the arse but necessary.  Also consider reg. in non-music classifications…e.g. Drinks, or other relevant ones.  Will cost a bit more, but will prevent others cashing in on your ideas;
–    Barenaked Ladies Boat Cruise…those fans are their record company – they take feedback from their fans;
–    A myriad of small things create a successful artist.  No band has come out of ‘nowhere’.  It’s always the result of an awful lot of work;
–    Favourite computer game – a SIMS recycling prgramme, or Recycling Avatar?;
–    James not concerned about possibility of negative mashups.. .
–    Wants to release a song every time he writes it;
–    Mr Scruff’s Tea.. Is there something similar James could do?  Pasta? Splashproof computer?;
–    Extremely important to build on the artist’s enthusiasm.  From this you create the contact and the assets, the roadmap;
–    Don’t chase the $$$$$, just try and put his authentic personality into the plan;
–    Will connect his music to fans with the same social tribalism as him;
–    These assets will create a brand that will ultimately benefit James more than record sales;

4. THE ARTIST MANAGER’S RESPONSE

Terry, Amul, James + Keith #1

Amul Batra (Fwinki Music):  For James, the event was as near to a total success as possible.  Following from all of Terry’s advice, James has already set up an MP3 blog, has added Google Analytics, we are in the process of crowd sourcing live visuals and we are working on a plan to get fans to vote for each of the remixes for “No Pins Allowed” We are just getting up to speed again after Latitude and will be having a team meeting in the next week or so to properly digest and make some concrete plans.