How to Make It in the Music Business
Lady Gaga’s new social network demonstrates how artists are forging their own paths outside an increasingly old-fashioned music industry, but finding and building an audience still is a tenuous affair for many musicians.
Lady Gaga recently unveiled her own social network for her fans, in a move that may give social media giants like Facebook and Twitter pause. The “Little Monsters” platform, named after Gaga’s own nickname for her devoted followers, is in beta and is invite-only. The site features a Pinterest-like interface and includes chat rooms with built-in translators that allow users to talk to one another in different languages.
The Little Monsters platform is the first product by Palo Alto, Calif.-based startup Backplane, co-founded by Gaga manager Troy Carter, with the aim of taking fan clubs and fan pages to the next level. The site will feature exclusive Gaga content, and could conceivably offer chats, performances and inside information directly from Mother Monster herself, giving it an advantage over services like Twitter and Facebook, where the pop singer already has strong presences.
With over 50 million followers on Facebook and 25 million on Twitter, the eccentric pop star demonstrates a remarkable mastery of new media, and though she enjoys healthy digital and CD sales, a tailor-made social platform shows Gaga as a new-millenial musician able to think outside the box — and increasingly independent of an outdated music industry machinery that has failed to adapt to the times.
But it’s not just Gaga who is striking a deeper independence from the recording industry. Grizzled punk legend Iggy Pop is releasing his new record, a collection of interpretations of French cafe classics by Serge Gainsbourg, Edith Piaf and Georges Brassens, directly to fans via digital outlets like iTunes. Pop’s label Virgin EMI rejected “Après” after the artist offered it to them, as he is contractually obligated to do.
“[The label] didn’t want it,” Pop said at a Paris press conference earlier this week. “They didn’t think they would make any money, they didn’t think my fans would like it… They would have preferred that I do a rock album with popular punks, sort of like ‘Hi Dad!’ I was not going to do that!”
Instead, Pop seems happy to keep his creative independence and offer music directly to his fans, outside the purview of the traditional music industry. “What has a record company ever done for me but humiliate and torment and drag me down?” Pop said.
The Making of an Old-School Rock Star
Pop’s disparaging comments about his record label reflect a long-fermenting malaise of artists towards an increasingly outdated music industry machine, which has failed to adapt to the new digital era. Instead, artists are now wondering exactly how much to take part in the system, and what purpose that system serves anymore.
It wasn’t always this way. The recording industry was the only game in town for a musician aiming to sustain a long-term career. While the recording industry has its share of one-hit wonders, most of the profits in the long-term are from so-called “career artists,” who build a fan base eager to buy records and concert tickets throughout and even well past the musician’s lifetime.
Building an artist’s career, however, isn’t easy, and a whole industry sprung up around the production, distribution and promotion of music. In signing with a record label, a musical artist joined a large, efficient machinery, and record companies played a vital role in helping musicians build and connect with an audience, able to pump large amounts of capital into the process.
The cycle was quickly established: an artist records songs for a record; the record gets promoted on radio and video with selected singles from the collection; and then an artist embarked on a tour spanning the globe, which lengthened the life of the record.
All of these activities need a huge cash investment, and record companies would often advance artists the money for recording and touring, in addition to paying advances to artists based on future profits.
For a while, the system worked, especially since the channels of music distribution remained narrow and confined to record stores, record clubs and formats remained predominantly physical forms like CDs, tapes and vinyl records. But as technology mutated the music industry — and consumers began often illegally downloading product — the machinery began to break down.
Screw the System
It’s tempting to say digital downloading ruined the music industry, and the business as a whole did take a hit from the shift to digital. But in truth, the system was dysfunctional for all but the very top artists, criticized by the very musicians within it long before Napster was an apple in Sean Parker’s eyes. The economics of music were already becoming unsustainable. Recording and touring costs add up in the millions, and promotion costs — getting videos on MTV, getting songs on the radio — added up as well.
All of these costs were ultimately billed back to artists, though often masked by byzantine, arcane accounting methods and sometimes draconian legal contracts. As a result, even a best-selling artist is often left with just a modest slice of the pie after paying back management and record companies.
An artist with a string of Billboard hits may seem as if on top of the world, but in truth, it can take a few years for them to break even in terms of paying back the record company they owe. This is why artists like 90s R&B girl group TLC went bankrupt at the top of their game, owing to a poorly negotiated recording contract and onerous management costs.
In this light, it’s no surprise that a diverse group of musicians have decried the music industry, with artists like Prince going so far as to write the word “slave” on his face during performances and Hole’s Courtney Love going before Congress to liken the system to “sharecropping,” well before digital downloading became the scourge of the music industry.
Is it any surprise, then, that a generation of artists, both new and long-established, are eschewing the traditional record company in favor of the opportunities offered by a new digital-based landscape?
Music Everywhere, Anywhere
As it turns out, distribution poses no problems for musicians looking to strike their own path. Platforms like Amazon and iTunes offer ways for musicians to distribute their work without the middle man of record labels or music distributors, bringing music directly and immediately to fans and letting artists cut themselves free of record labels.
Digital distribution has allowed artists British alternative rock group Radiohead, for example, to forego conventional recording contracts in favor of digital releases and limited-scope distribution deals. Since its departure from EMI in 2007, Radiohead has released records like “In Rainbows” through its website and signed distribution deals for physical distribution with British company XL Recordings.
Social media has also transformed how artists can build passionate, engaged fan bases to fuel sales and concert tours, giving many artists an autonomy previously unheard of in the industry.
Lady Gaga is one of the most influential musicians in this new arena, and her social media acumen and large followings on Twitter and Facebook have largely insulated her from the ups and downs of record sales and radio play. Album sales for “Born This Way” dropped dramatically after the first week, and while its singles may not have garnered the chart positions of her earlier efforts, her large following frees her from the typical industry cycle imposed by a record company.
The artist hasn’t commented on how she intends to use her social network, but should the site scale and attract the millions of followers she’s gained on Twitter and Facebook, Gaga will have a direct pipeline to her fans, without needing to rely on a third-party site.
She may be contractually obligated to offer any new music to her record company, but once her contract is up, she’ll likely have an accessible, eager audience gathered in one place via her site — a pipe dream for any artist hoping to sustain a lifelong career in music, but without the industry.
What About Touring?
Despite all the shifts towards autonomy enabled digital music distribution and social media, touring remains an analogue affair, and its centrality to a musical artist’s career has yet to be replaced. Artists continue to make most of their money from touring and later merchandising. Since the digital era of music, the emphasis of an artist’s revenue has shifted to concert tours, which is why ticket prices for top artists have skyrocketed.
The stronger emphasis on touring is giving rise to powerful new concert promoters and management companies that handle the day-to-day operations of tours. When Madonna’s deal with her label Warner Bros. ended, she signed a landmark “360” deal with concert promoter Live Nation in 2007.
No terms were disclosed, but the deal is said to give Madonna $120 million over ten years and encompasses future music and music-related businesses, including albums, touring, merchandising, digital endeavors, DVDs, music-related television and film projects, and associated sponsorship agreements — facets reflecting a musical career built on far more than record sales.
“The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift,” Madonna said at the time of the deal’s signing. “For the first time in my career, the way that my music can reach my fans is unlimited… the possibilities are endless.”
Madonna’s strategy may pay off handsomely: while sales of her record “MDNA” have been called lackluster, her summer tour, kicking off on May 31 in Tel Aviv, has already sold out many dates, with nearly 1.4 million tickets sold.
Touring may be the lifeblood of an artist’s career, but even that may transform with technology, especially as live Web broadcast technology improves. This spring’s Coachella Festival concerts, for example, were streamed live on YouTube, and smaller artists like Swiss electropop musicians Tim & Puma Mimi became the first band to perform a series of “long-distance” concerts via Skype.
Artists can conceivably offer backstage access or extra-footage via webcast, perhaps charging for exclusive or premium content or an entire series of shows. This direction has not been fully explored by a music industry still catching its breath from the digital revolution, but it offers rich opportunities for forward-thinking artists and endeavors.
Where Does This Leave Record Labels?
Despite the disruptive changes wrought by technology and social media, record labels will still have a place at the table for some time, since they still continue to control a huge catalog of material.
They also still have significant negotiating power, built over years of relationships and partnerships with radio and other musical outlets, and this likely will continue to be the case, even as new digital avenues open up. And, as streaming services like Spotify, Pandora and Rdio take off with consumers and create a new avenue for music consumption, these services still largely negotiate with record labels to license music, as opposed to individual artists.
Landing a powerful label can boost artists’ search for an audience, since record labels still have powerful marketing prowess, able to get their artists on radio, commercials, TV, movie and video game soundtracks, all of which give musicians valuable exposure in an often crowded market.
Still, loosening up the structure of the music industry is a boon for musicians who aim to follow their muse, outside the concerns of selling records or pleasing label bosses — even letting old punks like Iggy Pop release classic interpretations of French songs, no matter how odd the idea may be.
“[Virgin] didn’t want [my record],” said Pop of the conflict between him and his record label over his new direction. “They didn’t think they would make any money, they didn’t think my fans would like it — very sensible attitudes for a sensible sort of person — but that’s a different sort of person than I am.”