NYU Music Business professor on the new business

Speaking with Samuel Howard-Spink, Clinical Assistant Professor at NYU Steinhardt’s Music Business Program, I now have a new view on the music business. Here’s the insight that he had to share on what it NOW means to “make it” in the music industry.

How can one make it into the music industry?
Define “making it?”

Being signed onto a label. Being able to play music as a career.
Having a record label is absolutely no guarantee of it being a career. There is no such thing as a guaranteed career in the music industry. It’s disposable.

What would I consider making it? Making a sustainable living through music production. For people that don’t perform their own material, the options for them getting paid are getting squeezed and squeezed. If you write your own material and you have a good publishing deal.

What’s the difference between publishing and recording?
Publishing is based around the composition or the lyrics.

Recording is selling recordings. Recording industry revenues have plummeted because people don’t care about CD’s anymore. Publishing revenues are going up because of the number of new ways there are to synchronize music to all these exploding ways of media. More people are using it and more people are demanding it because they are being exposed to more different kinds of music than you would be than just listening to the radio or shopping at Wal-Mart. By the way, Wal-Mart still sells the vast majority of CDs in the country.

If you’re just Britney or Christina and you just sing, perform, and dance and shake your butt, but you don’t write any of your own material, dropping CD sales is a big problem for you. If you write your own material and your job, in the music business, exploitation is a good thing. Exploitation means getting your composition, to the extent that it’s your intellectual property and it’s getting administered by an organization, out there. Then there are a lot of ways of getting revenue coming back to you. Each way means a bit less revenue than the old way. If you are a music creator, then you are at a much better position to make a living from your creativity than you ever, ever were before.

The idea that opportunity for success is limited because of the reduction of the profilitability of the major record labels is a fallacy. Only a very tiny number of musicians have ever made real money from recordings. A vast majority of musicians probably never have and never will. The costs for recordings now are so low that anyone with time and effort can produce a really good sounding thing.

Success: you can make a living through your creativity. How that creativity is exploited used to be one of two things that were governed by corporate gate keepers—if you got onto broadcast radio, if you got a major label deal. Now there are many more options than many more options than most people can deal with. But that’s the nature of it being a very early stage of the development of new institutions, business models, shapes, sizes, success what people want, what they demand, these things change. And some enterprises are designed to respond quickly to consumer awareness and the recording industry and the latter quarter of the 20th century is designed to channel as many people towards that music as possible.

So Wal-Mart only sells major label records, the radio only plays major label music, retailers only sell major label music at the front of the store and place it in main visibility areas. So if you’re a small band from Brooklyn, you never really had a fighting chance. Now you do. Now the label is no longer the anchor of a musician’s career. Not that they ever were but they said they were because they were all flash, bang, big flashy videos, then they become sacrificial lambs to the demand of the American market.

So there’s a chance for a small band to break into the music industry?
There used to be an industry to break into. That industry is getting separated between super stars at the top and this huge gathering of working/middle class of musical workers, creators, facilitators, managers. When you talk about breaking into the industry, that’s how it used to be when it was an industrial media business based on physical sales of existing material things. In order to get that level of investment by a company you had to break into that industry early to show that you had genuine sales potential. You don’t need to do that anymore. Breaking into the industry means being accepted into a very old way or a 20th century way of what it means to be successful as a musician. And what it means to be successful as a musician is undergoing vital paramount change. The major label deal isn’t the only way to do it and going independent isn’t the only way to maintain your creative independence. There’s a thousand different ways. The problem is, we’re used to thinking of making it as having a mass audience, millions of people. That’s what we call making it. But now-a-days, you don’t need to have nearly as many people to have a sustainable career.

He tells me about the 1000 True Fans Theory:
Instead of needing 250,000 albums sales to break even on what was invested in you by the record companies, which is an absurd number of records, but which was fine in the 90’s when there was no way else to listen to music except for CDs, if you can get 1000 people to spend 100 dollars on everything you produce for 1 year– exclusives, releases, t-shirts, access–for everything they can get out of you creatively, you make 100,000 dollars. That’s making it. No one is saying that getting 1000 people to do that is the easiest thing in the world, but it’s much easier than it used to be. There’s a success story online, whose yearly income is around 90,000 comes from 52 people. Instead of grabbing a CD and never bothering to do anything else with a band, these days, the only way to ensure sustained success is through constantly managed relationships with people that care about what  you do. Not the Wal-Mart check-out shopper, but the person who genuinely feels that they are part of the investment of what it takes for you to meet their demands for experiencing creativity. There are millions of millions of people all of the world, break them down into groups 1,000s and you can have a vast majority middle class of musical workers, and we’re not supposed to know the majority of them, and we find the ones that make sense to us and our peer group. No one wants to pay for recordings anymore because there is no perceived monetary value in the recording—there is use value, exchange value, reputational value, showing your music collection as a reflection of who you are as a human being, who you identify with.

Over the course of the 20th century progression into late capitalism, the hit model, the one thing that pays for all the failures, that wasn’t an accident, it was a terrible business plan, but that was how the industrial nature of the economy around music was structured. A better way for large companies to get return on their investment. Now we’re moving into a network economy, there’s a lot less than this industrial economy. The entire basis of the economics is going to change.

Now look at it this way—you’re a young band in Brooklyn. It used to be that you needed a major label deal and you get tour support and videos and groupies and you’ve made it. How would a band starting out in Brooklyn even know what making it meant? Do they want a big tour bus and drugs and all the rest of it, or do they want to be able to play a gig and have music as a part of their life. Do they want to be super famous? They’re becoming almost mutually exclusive. We’re far too early in the shift, but we’re at a part of this shift where the old power holders are terrified, because their entire way of life is crumbling. Now we’re entering into a period where it’s much more like a genuine meritocracy where crowd-sourced approval starts to grow and that produces reputation and they will be expected to create reputational value to financial value. That’s business advertisers to boost its reputation. You end up with a hit song.

These days because there isn’t a central source of information—radio, MTV, three news channels—we can’t all expected to receive the same music and to pay for the same music which means enough people paying for .


About Samantha

Samantha Tilipman, 19. NYU double major in Journalism and Psychology.
This entry was posted in Business, Music. Bookmark the permalink.

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