You Can’t Develop Artists When Your CFO is Riding You For Numbers
I don’t see the status of the industry as something that was developed intentionally by labels over the years. I think you would agree it’s quite the opposite, since they’ve been rather reactionary all along (at least since I joined in during the mid 90s, this is my point of view). Let’s take a step back for a second and consider our short digital history:

I think record companies got spoiled during the internet bubble days, when the “advance payment” model was introduced and most start ups had lots of cash from VCs to pay for access, pay to play. With many companies then going out of business in the aftermath of paying “advances”, the cash went straight to the bottom line. What a wonderful model!

We are, of course, dealing with (most of the time) public recorded music companies. These companies used to own hard goods – plants, studios, stock, etc. – and the mentality of the public company CFO is to try and drive stock price and revenue and margin increases by any reasonable means necessary.

During the past decade, while labels were getting out of those physical asset management business lines, they were also creating “digital business development” units that were originally designed to explore, approve and license new digital business models. But before you knew it, those units became a P&L center, with their members in charge of driving revenue numbers. Sales. So advance fees became a new business model. Even thought the bubble was gone, with iTunes launching there were plenty of other large profile entrants to the marketplace that could and did pay entry fees.

In the past handful of years, there has been a healthy shift in the industry, and most such “biz dev units” merged with “distribution” – and indeed, the decisions made about “advances” and such today are a lot more strategic in nature and driven by a holistic approach to the prospect, not a dry requirement to meet a red line. They are not punitive, but rather driven by a realistic approach of short and long term opportunity per prospect.

Reality still presents a challenge when one takes “art and entertainment” (where product quality is very hard to predict) and attempts to drive a public company with it. You just can’t make projections like you do with pizza. Back when there was stock to “play with” on the books, and plants, and studios, there were other elements to the business that drove recurring revenues. Catalog was business too.

Today, the revenue is mainly about the art itself, the IP. The result is that well, if the money is on the table with a major opportunity, it is hard to fault a businessman for trying to make a sale. There is no right or wrong in an open market environment. You can of course argue this has nothing to do with the art and is unfair to artists – that is an entirely separate story altogether.

Yes, taken as a whole, over the past say 15 years, the industry’s restrictive and punitive approach has done it more damage than good. I think it was due to a lack of strategic vision and to short-term, quarterly-numbers focused approach. Things are changing for the better, though time would tell if it’s too little too late.

So in the end of the day, I understand both sides of the argument, and believe that, with respect to our 2012 reality, the “truth” is in the middle and in various shades of grey.

On a separate note, I remain curious about the limited long-term vision that record companies take to their business line. They have realized a decade ago that their real assets are the IP. But the largest diversification has been 360 deals? Why not expand what IP means? How come the major labels don’t control Apps, games, and other IP? Why distribute just one line of digital IP (and the smallest at that)? We all know labels would do well staying focused on music, it’s what they know best. But the public entity that used to own plants, studios, stock, the public company that seeks aggressive growth – has so many exciting opportunities in front of its face these days, and yet none have acted on it. Diversification seems to be a more exciting and constructive approach than arguing with digital retailers over pay for play fees. Just an idea.

Shachar Oren, CEO

Neurotic Media’s VP of Sales Gary Eaton and CEO Shachar Oren attended the event. Participating Artists Included Black Crowes, Train, Rolling Stones, Third Day, Sugarland, Zac Brown Band, Drivin N Cryin, Atlanta Symphony Orchestra, Corey Smith, and Anthony David.

Kudos to Georgia Music Partners and the Recording Academy® Atlanta Chapter for organizing the event and for our Representatives at the State Capitol for their support.

We hope that in the weeks and months to come, we will see decisive action taken by our Representatives to deliver incentives that help propel the music business in Georgia to the next level. Onward and upward!

For those that follow these trends, this isn’t new information or even perceived as a new dynamic. In fact, over the history of popular recorded music, a handful of artists / albums have typically always accounted for a majority of sales on an annual basis.

In today’s digital landscape, the ease and economics of access to recording technology and digital distribution has made it simpler than ever before for an artist to create and release a project. Here’s a little perspective: In 2011, there were almost 77,000 albums released which sold one copy or more (Nielsen Soundscan).

It seems like almost everyone is recording and releasing music - but is anyone actually being heard?

The truth is, the enormous pipeline of new releases is so expansive and vast that it’s a challenge for even the most avid consumer to stay up to date. This is a problem. It’s a problem for the artist who is struggling to gain an audience – and it’s a problem for consumers who don’t want to be exposed to all the new music (77,000 albums!?) – just the good new music.

Sure, radio is still a leading force in music discovery, but we all know how limited and narrow their playlists are programmed.

This problem creates a landscape of opportunity for brands. Consumers “may” feel loyalty to a brand, but they are passionate about music. Why not connect with that passion and become a voice of authority, a destination, a valuable filter in the eyes of your customers by exposing them to the good new music? This can take the form of an artist discovery program, pick of the week, song of the day, etc. Conversion, activation and loyalty will grow as result of truly connecting with the market you are looking to influence.

Whether a brand has a well-defined personality – or is simply looking to change their image or voice – music is a powerful tool that helps you express the brand attributes that you wish to emphasize. Music helps brands communicate to consumers in a language they understand – and create an emotional relationship.

Here at Neurotic Media, we have the technology and the music (millions of songs) to curate a campaign specifically for your needs. If you’d like to explore how this strategy might fit your particular objectives, please send us an email. We’d love to explore the possibilities with you.

(Gary Eaton – VP Sales / @garyeaton)

“Neurotic Media was the first service to launch an open API developer lab as a resource for music site developers with www.neurolinq.com – and we armed hundreds of coders with the ability to create services that access a robust music catalog” say Shachar Oren, Neurotic Media’s CEO.  “With the addition of Neurolinq™ PLUS API, we make it even easier to code rich apps and widgets.”

“Neurolinq™ PLUS’s elegancy is in aggregating multiple rich media sources into one simple method,” adds Tim Kohler, Neurotic Media’s VP of Technology.  “Instead of having to integrate multiple feeds from multiple sources, developers can simply integrate Neurolinq™ PLUS as one robust solution that powers their service’s back end, while focusing their efforts on their core business and user experience.  Neurolinq™ PLUS offers both RESTful and SOAP calls for added flexibility.  You can see an example of this in our own mobile showcase at http://m.amplified.com (which in itself is a “client” of Neurolinq™ PLUS) and in our online showcase at http://www.amplified.com.”   

About Neurotic Media:

Neurotic Media, the leading provider of technology-enabled marketing and distribution services for digital media, celebrated its 10^th anniversary in 2011.  Neurotic Media’s services afford companies total control over how they commercialize online and mobile downloads of music, ringtones, and other licensed and aggregated digital media through private-labeled stores, promotional sites, and open API services.  The company’s solutions protect a brand’s interests and consumer data while providing measurable results.  Clients include online retailers, record companies, consumer brands, and mobile carriers.

Above & Beyond: “Group Therapy” – This really covers the entire spectrum of electronic music. Above & Beyond are some of the best producers with their emotional hooks and catchy beats. (Earle Smith) 

Adele: “21″ – Adele’s sophomore album showcases her timeless voice and her ability to cross the pond and dominate the charts in multiple countries with personal songs jetting straight from her heart. (Stephen Lam) 

Architecture in Helsinki: “Moment Bends” – Sexy pop for smart people. This isn’t on Britney’s playlist. (Mazzy Solana) 

AWOLnation: “Megalithic Symphony” – The most positive, spiritually sarcastic rock you will ever hear; even your mom will like it. (Mazzy Solana)  

Bad Meets Evil: “Hell: The Sequel” – Eminem at his best. (Tim Kohler) 

Beastie Boys: “Hot Sauce Committee Pt. 2″ – Hard to believe these guys put out their first album 30 years ago. This latest project finds their energy, rhymes, production and beats still going strong. It’s like a party for your ears! (Gary Eaton) 

Colbie Caillat: “All of You” – This project shows the best of her husky tone, relaxing guitar and encouraging lyrics. (Ling Zhu) 

Hayes Carll: “KMAG YOYO (& Other American Stories)” – A steady fixture on the Texas scene, Carll delivers an album full of exceptionally clever and insightful lyrics in his trademark slurry twang . The song “Hard Out Here” is reason enough to be on a best of the year list. (Gary Eaton)

Coldplay: “Mylo Xyloto” – This album strays a little from the original sound of Coldplay but you can still hear where they started and they stay true to their sound. (Stephen Lam) 

Cut Copy: “Zonoscope” – Australian pop so good, you won’t realize you’re dancing too hard until you get pulled over. (Mazzy Solana)

Devotchka: “100 Lovers” – An amazing pop record, sounds like rock n roll Gypsies, a colorful canvas of melodies and song. (Shachar Oren)

Emery: “We Do What We Want” – Most bands in the Post-hardcore genre put out an album or two and fall off. Emery is different, they have continued to impress since 2004, and their latest album is definitely one of their best. (Todd Jones)

Game: “The R.E.D. Album” – Most know Game is lyrically talented, but the guest spots and out-of-this-world production make this album the best rap album of 2011. (Earle Smith) 

Holy Ghost!: “Holy Ghost!” – This album is so sexy you would think Holy Ghost was French, but they’re from New York so it’s much funkier. (Mazzy Solana) 

Lady Gaga: “Born This Way” – A mind-blowing sophomore album. (Stephen Lam) 

Man Man: “Life Fantastic” – All life’s lessons in a single album. They literally tell you to punch your dad in the face if it will make you feel better. It’s like Rock for happy pirates. (Mazzy Solana) 

Mister Heavenly: “Out of Love” – It’s not any secret that I love Islands, so I was pre-destined to love this album. Add Honus Honus from Man Man, Joe Plummer, and an occasional tour appearance by Michael Cera and you get this heavenly musical experience. It has a sort of old school feel but is still very relevant. Definitely has an Islands-y vibe. Saw them live this year and they were all wearing matching friendship shirts! (Becka Hardy)  

Portugal. The Man: “In the Mountain In The Cloud” – A great alt-pop album, with fun musical tributes to the likes of Pixies, ELO, Supertramp and others mixed in if you listen close enough. (Shachar Oren)  

Sick Puppies: “Polar Opposite” – An acoustic EP of some of their most popular songs. Allowed me to really listen to the words without the organized confusion of multiple instruments. (Earle Smith)

Chris Thile & Michael Daves: “Sleep With One Eye Open” – A fiery duo of acoustic masters playing traditional bluegrass songs with passion, speed, authenticity and technical brilliance. (Gary Eaton)

Eddie Vedder: “Ukulele Songs” – Heartfelt lyrics and an acoustic sound make this album excellent for those quiet, reflective moments. Classic Vedder. (Tim Kohler)

But wait, there’s more! Here are a few additional notable releases we liked this year:

Battles: “Gloss Drop” – This album sounds like two (or more) robots having sex: math rock at its finest while still being ridiculously dance-y. (Mazzy Solana) 

The Civil Wars: “Barton Hollow” – Absolutely (and truly) breathtaking. (Gary Eaton)

dEUS: “Keep You Close” – A wonderful new record from this Belgian band, which sort of picked things up where Radiohead left it after ‘OK Computer’ and been running with it ever since – this new album is the best since their mid-90’s debut, a strong, fun, innovative rock record. (Shachar Oren)

The Ghost Inside: “Returners” – This album actually came out in 2010, but I didn’t find out about it until this year. These guys are definitely one of the best hardcore bands to come out in the last 5 years. (Todd Jones)

Hooray for Earth: “True Loves” – I know what you’re thinking, and I don’t just love this band because of the name. (Becka Hardy)

Sondre Lerche: (self titled) – A fantastic release from one of today’s strongest alt-pop writers, in the tradition of Aztec Camera, Prefab Sprout, The Beatles. Unmatched vocal range, beautiful writing and composing, he just makes every complex song sound so easy and effortless. (Shachar Oren)

Silkie: “City Limits Volume 2″ – Most dubstep that comes out is released as singles or EPs, and even when an artist releases a full album it’s rare that I can listen to the entire thing end to end. Silkie expertly weaves jazz and funk influences throughout the album but still manages to stay true to the dubstep roots. (Todd Jones)

Stinkahbell & Psy:am: “Don’t Tell Mum About Ibiza EP” – Two highly anticipated up and coming dubstep producers. They’ve both put out some good tracks this year, but their EP together really set the bar for what they need to do in 2012. (Todd Jones)

STRFKR: “Jupiter” (Remastered) – I didn’t discover the dance party that is STRFKR until more recently, so I missed out on the original release of this album. Luckily, it made its way to me in the form of this re-release this year. Highly recommended if you’re into the synth-pop thing! (Becka Hardy)

As often happens, the conversation turned to the universal appeal and power of music and he quickly said “It’s the most popular thing in the world.”  I told him that was a great line and that I’d probably have to use it at some point in the future.

The person I was speaking with went on to explain that he couldn’t take credit for the line, that he had in fact heard it in an interview with Donald Trump.  He said when Mr. Trump was asked “What is the most popular thing in the world?” that he gave a one word answer “Music.”

Sure enough, I found a clip online. Not sure how I missed this but it’s from 2004 in a sit down with Ali G (a character played by Sacha Baron Cohen). In true comedic form, Ali G goes on to argue that the correct answer is ice cream.  Sorry Ali G, I’m going to have to side with Mr. Trump on this one.

(Gary Eaton – VP Sales / @garyeaton)

To me, Christmas isn’t about receiving gifts; it’s about celebrating the birth of Christ, being thankful that I have the ability to put a smile on the face of someone else – and make their holiday as joyous as it was for me when my grandparents put one on mine that day.

Christmas has a special place in my heart and I have an appreciation for what drives my Holiday spirit and creates joy in my life: It’s by far the music! Hearing a favorite Christmas song, or remembering a specific place or event when a Christmas song comes on – there’s no substituting that. The power of music makes the holiday season an enjoyable one for me every year.

(Earle Smith – Neurotic Media Production & Merchandising)

As a personal example, every time I hear one particular Holiday song, I am immediately taken back to my Indiana childhood, probably around the age of 8 or 10. In this instance, the memory is of gray winter skies, snow on the ground and me standing in the hallway (in my pajamas I might add) looking into the living room with the Christmas tree in full view.

The song that evokes these memories is “I’ll Be Home for Christmas” by Glen Campbell. The funny thing is, it’s not my favorite Christmas song – it’s not even my favorite version of this song. But it is one that has some of the most powerful, vivid memories associated with it.

I’m sure you have your own examples as well. These types of experiences are one of the reasons why Holiday music can be such an effective part of a brand’s promotional strategy. There’s an opportunity to tap in to the nostalgic holiday memories of consumers and/or create new memories for them as well. I don’t know if the value of that can even be measured, but I do know that music moves all of us – especially during the Holiday season.

(Gary Eaton – VP Sales Neurotic Media / @garyeaton)

I was always wondering why my colleagues feel too shy to sing karaoke while they are quite confident in speaking in public. In contrast, I am quite open in karaoke but shy to speak much in public. The answer is that American karaoke is quite different from Asian karaoke. In normal American karaoke, you need to sing to everybody, all the friends and strangers in the public room. And everybody is staring at you when you are singing. However in Asian karaoke, only your friends can listen to you in a smaller but private room. Inside this separated room, there are always bigger screens, fancy spinning lights, drums, bells and computers. When you sing, your friends can find many ways to get involved, support you and enjoy themselves even though your singing skill is not that good. So no worry for them if you miss the notes or can’t reach the high pitch!

If you still feel a little nervous even in Asian karaoke, then pick the song “Jingle Bells” first. We have tried this song several times and it brings most fun every time. Everyone, old and young, men and women, American and non-American can sing this song with you. Interesting enough, everyone just can’t stop clapping hands or even dancing in lines with its rhythms, especially when it comes to “Hey jingle bells, jingle bells.” Can’t believe it? Try once during this Christmas holiday!

(Ling Zhu – Neurotic Media Developer)

Little did I know that this assignment was an indicator of things to come. As it turns out, Holiday music makes for a significant business for record companies and brand partnerships. In fact, I went on to work with holiday music on an almost year-round basis (try to contain your jealousy please). Over the years, I’ve created a long list of branded holiday compilations that have gone on to sell millions of copies.

One of the most important lessons I’ve learned along the way is this – when brands are working with Holiday music, one of the keys to success is this three-word motif: Know your audience.

If you are looking to appeal to a broad demographic base, it’s often best to use traditional artists such as Bing Crosby, Nat “King” Cole, Dean Martin and other similar performers.  Those artists have provided a seasonal soundtrack for multiple generations. The warmth of the Christmas spirit is deeply rooted in nostalgia, tradition and family. Classic Holiday recordings from legendary artists are often as relevant to a twenty something as they are to grandparents, simply because we’ve all grown up with this music.

Seasonal tracks from contemporary artists can certainly be an effective strategy – particularly if your target audience is a younger demographic. Just keep in mind that newer material does not have the historical track record to make an emotional connection with older consumers. There simply aren’t many memories associated with a new song. I have seen holiday promotions fail by brands choosing contemporary music over traditional artists. By choosing a specific newer artist(s) the brand limited their appeal to a very small niche group. At face value it may seem that using a current artist is a compelling choice for the Holidays – and it can be – just be sure to consider the full spectrum of dynamics when making these decisions.

Of course, each situation is unique and there is no one-size-fits-all answer. If you are considering holiday music as part of your brand strategy, we’d be happy to discuss options and possibilities. Please feel free to give us a call 404-688-6858 or email us if you’d like more information.

(Gary Eaton – VP Sales & Marketing)