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Tom Silverman Talks Trouble For The New Music Industry

milesofpilesI worked at a used bookstore in high school and college, and I learned something interesting about booksellers: most people who sell used books don’t read. My boss and his colleagues told me that over the years, sellers see so many books come and go that it becomes almost impossible to choose one to read, and eventually, you just kinda give up.

I remembered that detail this week as I was reading an interview at Wired.com with the founder of Tommy Boy Records, Tom Silverman. Silverman has a lot of things to say that are contrary to the whole, “hey-ho, technology is saving the music industry” line we hear so much these days. The bad news? The music market is so glutted with bands and artists struggling to DIY that nobody is making any money. Fewer artists are breaking through today than ever before.

According to Silverman, our love affair with technology has created a supersaturated system whereby there is too much content for any quality to rise to the top. He quotes numbers claiming that 79,000 (80%) of the albums released last year sold under 100 copies – a number so insignificant in terms of industry stats that it might as well not exist. In other words, the industry itself is becoming like a used bookseller, so overwhelmed by choice that all those many choices may as well not exist.

Indie Artists Aren’t Surviving

During this period of transition between the old and new ways of doing business, a challenging reality is presenting itself: labels can’t afford to invest enough in artists, and many musicians are producing, promoting, and touring themselves. It’s the democratization of the system, right? But when we get down to the numbers game, almost no one is making enough money to survive. Certainly not enough to quit those day jobs. Again referencing numbers offered by Silverman, historically speaking, you need to sell more than 10,000 copies of an album to be an officially surviving, working band, and only 10 new artists did that over the last year.

Searching for solutions to this plummeting numbers game, Silverman points out two key trends:

1 – The industry is involved in an insane technology race, and this obsession is taking us away from focusing on discovering good music and identifying new genres.

2 – Technology isn’t necessarily doing artists any favors. Bands with 50,000 followers on Twitter aren’t turning those followers into fan-investors. On the other hand, artists who are touring relentlessly while giving away their music for free as a promotional tool are seeing results.

Rethinking An Adversarial Relationship

Ok, ok! I know you didn’t come to GigHive to read a bunch of depressing shit about how we’re all doomed. But I think that Silverman’s perspective is important because he’s being realistic. We’re in a transition period as an industry, the question is: what comes next?

Luckily, Silverman’s got some interesting ideas. He suggests that one of the major problems that destroyed the old industry is that the relationship between labels and artists has always been adversarial. The label is always fighting to squeeze as much as it can out of the artist while giving as little back as possible.

The labels of the future, Silverman says, should function more as investors entering into 50/50 partnerships with musicians:

“Every artist is a business, and has its own corporation under this model, and all of that artist’s creative equity goes into that — not just music, but everything they do. Whether it’s live, or merch, or whatever, their brand goes in there. And the investors who are investing and trying to promote on the other side — they own half. So it’s more like a business. An equity partnership.”

Building the New Music Industry

We’ve talked about bands being funded by brands before, but this model takes the band-as-business to the next level. The unique element here – and one that divides it from the stranglehold 360 deal – is that each artist and label/partner is invested in the success of the project, and everybody profits, or fails to profit, equally by the results.

What do you think, readers? Could this be a viable, rewarding system for the future of the music industry? Could it strike a balance between the handful-of-superstars system of old, and the current everybody-plays-but-nobody-gets-paid clusterfuck?

Next week, Silverman and his partners are putting on the newly-revived New Music Seminar in New York. For $200, you can attend three days of events, including parties, interviews, roundtables, and q&as with industry experts, all of whom are posing the same questions asked above. Make some great connections and put your two cents in, or if you’re not in NYC, let us know what you’re thinking right here!

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  1. [...] the problem that Prince and other artists have with the internet is one that we’ve pointed out here on TheBuzz a few times already: the democratization of the music industry is great – what’s not great is [...]
  2. Beth Isbell
    Here's what Silverman says is working: "On the other hand, artists who are touring relentlessly while giving away their music for free as a promotional tool are seeing results." So tour, give your CD away for free, sell other merch, get a good fan base going. I've done some commission type A&R work for an arm of EMI ... we were trained to look for two things: (1) hit songs, (2) bands with large & growing followings (& lots of positive industry buzz). When you have both of those things in one band, the majors & big indies pay attention. First step is build up a nice following & keep it growing. Second step - write hits & be great at playing them live (& in the studio, as needed) ... have interesting songs, an interesting show, and tour & promote with the idea of growing your audience AND creating an audience that buys your CDs, merch & actually comes out to your shows. After you do that, then look for industry help ... not before. As far as what's going to work in the future ... from the band perspective, it's the same drill. From the label perspective, I think they will be finding ways to tie advertising into exposure for their artists to generate money for the label & advertiser (& the band/artist). As we go to an individual song model - downloads or streaming - bands/artists' will be more pressured to write hits that fit particular genres being streamed ... but there is also TV/Film sync options. But the trick for any artist or band is still quite simple - put some paying fans in the seats!
    • gighive
      Awesome! Thanks for the feedback, Beth.
  3. Laker Greenwood
    I think that most of the DIY artists rely way too much on technology and the fact that its easy to get music out to the public. So what, you released a song on iTunes? Anyone with a computer and the internet can do that. Back up what you're putting up on Myspace and iTunes with your live show. And not just locally, but touring everywhere you can and growing your fan-base. And, for the whole 50/50 band and label partnership, I think its a pretty good idea. All i've ever heard about labels is that they squeeze bands for all they are worth, and give as little back as they can. A 50/50 partnership, in leu of a 360 contract, could be the answer to all of the trust issues I can see within the industry.
  4. Clint McCormick
    -Clint McCormick (Clay Withrow's Music Business 9:00 am Thursday class) I believe that promoting yourself as an artist is obviously pretty important. I think that youtube is a good start to promote one's music. You never know how many hits you might get on that website. Who knows, you may end up like Edgar Cruise's(I hope I spelled his last name right) classical version of Bohemian Rhapsody with millions of views. However, it can certainly be very difficult to pick out different artists that you may like. There are too many recordings. It would take you several lifetimes to listen to every recorded piece of music ever made within the last 100 years. This is the disadvantage in my eyes as to the technology boom in the music industry. There's A LOT out there to pick through and listen to as far as discovering new artists that you like. The only thing to compete with this phenomenon is to just play the game by using all of these resources to your advantage. Everyone else is getting their name out there by using communication such as the internet, facebook, myspace, etc. It's all you can do really, and I don't really think anyone can deny that. Right? I mean you have to keep up with what everyone else is using and think ahead on creative ways of getting your name out there. Another thing I would like to touch on is how artists get their music to their fans at concerts, festivals, etc. CD's and any form of music is just really expensive now-a-days. Radiohead I know did some kind of brilliant promotion where they let their fans pay as much as they wanted for one of their albums. I can't quite remember which one, but they made gobs of money selling their albums that way. I think this is really how it should be. I have albums in my eyes that are worth 50 cents. While other spectacular quality albums I have are worth hundreds of dollars. How do you really put a price on albums if you put aside the profits that are expected to be made to pay out the big players in the industry? It's just hard to put a price on something like an album. It's like a painting, you know? The industry is notorious today for pumping up artists and spitting them out like a piece of trash. It's just unstable and unpredictable.
    • gighive
      Thanks for the feedback, Nick. There is a sense of change for the music industry, but who knows if it will be drastic.