Five New Music Business Models
Posted by Steve Allen | Filed under SoGospelNews.com Articles
Retail music sales have declined steadily during the last nine years. Now the economy is in a major downturn and CD sales are slumping even more as consumers tighten their purse strings. Downloads are increasingly popular, but have yet to achieve revenue numbers equivalent to retail sales. On average only three percent of music on an iPod is purchased from the iTunes Music Store.
The industry is searching for a new business model. Here are five new methods of selling music that are currently being tested by many artists and labels.
Free Music
Many major music industry players hold the opinion that illegal downloads have been the culprit of falling revenue. Since illegal downloading is so prominent, many companies have embraced the concept by giving music to consumers at no cost. In many cases, free music is a loss-leader used promote other music related merchandise such as t-shirts and concert tickets. Pop artist, Prince, gave away a copy of his last album with the purchase of a British Sunday newspaper. This outraged music merchants, but Prince maintained that it was to promote his upcoming UK tour. As a result, every tour date sold out as soon as it went on sale.
SpiralFrog.com is experimenting with allowing users to download music for free after viewing advertising. Typically these type of sites have a revenue-sharing agreement with participating labels.
Pick Your Price
History was made when rock band Radiohead released their album with a voluntary price tag. The album was available for download and users then paid an amount equal to the value they perceived it was worth, including nothing at all.
Magnatune.com has built their business model around this technique. Albums carry a low minimum price and then users can express their appreciation for the music by optionally paying more. The minimum album cost is around $5 and users tend to purchase a higher quantity of music at this price.
Price Point = Demand
AmieStreet.com is based on a “pay by popularity” business model. All of the music on the site is free to begin with, however, the more a track gets downloaded, the higher the price goes up; the cap being $0.98. This contrasts iTunes model in which all tracks, regardless of popularity, are the same price.
Subscriptions
Subscription services have been around for several years. Rhapsody has come to the forefront of this business model. Users pay a regular monthly fee to access the extensive catalog of music. Music is played either through the company’s software or through a web browser. Songs can also be downloaded for $0.99.
Rhapsody is additionally available “on the go” for the user with their Rhapsody To Go service. The subscriber purchases a compatible MP3 player and loads it with songs from the Rhapsody catalog. Songs can be changed often as long the monthly membership is maintained.
Music Tax
The basic principal behind the music tax concept is that Internet service providers would charge a flat-rate fee as part of the Internet service plan in exchange for the right to download and share music. File sharing would decriminalized and the music industry would have a new stream of revenue. Many proponents are of the opinion that this would create revenue equal to or greater than CD sales 10 years ago.
Other variations of this concept could include a tax on digital audio players or direct taxation through the government.
Conclusion
Gospel music is one of the last genres to be affected by the changes happening in the larger mainstream music marketplace. The advantage to Gospel music being one of the last genres to be hit with digital revolution is that maybe a new business model will be developed and proven before Gospel music experiences the troubles that other genres have had in the past.
The demographic that primarily buys Gospel music is unlikely to illegally download their favorite quartet’s latest project. However, it is to the advantage of everyone to develop new techniques to market and distribute music. The Gospel music audience tends to regenerate itself every five to 10 years. That being said, the next generation will be familiar with advancing technology. By then, all of the companies that have tried with no success will have dwindled and the mainstream media outlets will become status quo. I believe it is a positive challenge for all of us to embrace the technological changes in the secular music and media industry. Not only for success, but for the possibility that a life could be changed via these unconventional outlets.
Tags: business model, downloads, ipod, music business, music tax, Rhapsody
Got… Vinyl?
Posted by Steve Allen | Filed under SoGospelNews.com Articles
The economy has been the primary topic of conversation in America’s living rooms and in the media. Sales are slumping in nearly every industry. Many people are finding themselves in the unemployment line. The music business is no exception. It has been feeling this financial crunch for several years now. In 2007 CD sales decreased by nearly 50 percent. Last year, sales numbers fell another 50 percent from there. Despite horrific music sales, there were two areas of growth: paid downloads and vinyl record sales.
Most people are aware of the growth of digital music downloads. At this point in time, downloads are not a major source of revenue in gospel music. If trends continue as they have, this may likely change over the next 10 years.
The Recording Industry Association of America (RIAA) just released a figure stating that vinyl record sales doubled in 2008. Existing record shops in major metropolitan areas found vinyl record sales soaring and in response had to open new stores to meet the demand.
Audiophiles have long argued that vinyl sounds better than CDs and MP3s. Many secular artists are releasing albums on vinyl with a coupon for downloadable MP3s. This allows customers to have the vinyl record for home and a digital copy to burn on a CD or to load on a MP3 player.
However, vinyl does have its drawbacks. Records warp, are not easily portable and with every play, degrade slightly in quality. These limitations are minuscule for those who appreciate the aesthetic value and “fatter sound” a CD does not offer.
People listen to vinyl differently than CDs or MP3s. It is an active listening experience as opposed to an experience that is passive in nature. A vinyl record offers larger artwork and liner notes than a CD. Most MP3 downloads don’t even include artwork. If they do, it’s in a digital PDF format. iPods and other music players are convenient (and convenience sells), but they have changed the way we listen to music. iPods tend to provide background music for listeners during workouts, commutes and chores around the house. Listening to a vinyl record requires participation. After four or five songs, the record needs to be flipped over. The listener does not have the ability to make a 40 song playlist of favorites.
Record players are showing up in stores across the country. It has never been easier to transfer an old vinyl collection to CD with the USB equipped record players that have recently infiltrated the market. Teenagers are trading in iPods for their parent’s old record collections.
If this trend continues, it could be a great thing for the entire music business. Not only because the listening experience of vinyl is more interactive, but also because they are extremely difficult to pirate. There is much evidence that shows music consumption is higher than ever, however, the population as a whole is only purchasing about 50 percent of what it consumes. The rest is either traded or downloaded illegally. Will the vinyl trend continue? Let’s hope so. Maybe people will stop viewing music as a background for the mundane and realize the joy and satisfaction that comes with putting an LP on a turntable.
Steve Allen
http://www.squareonestudio.com
Questions, Questions, Questions…
Posted by Steve Allen | Filed under SoGospelNews.com Articles
I usually try to answer a question in this article, but this month I would like to ask the questions and let you answer them. Feel free to answer as many or as few of them as you like. You can post your answer in the comments for the public to view. If you would prefer to keep your answers private, feel free to email them to me. My email address issteve@squareonestudio.com .
1. Is the health of gospel music deteriorating or is it stronger than ever?
2. Does a new independent artist have a better chance at succeeding today than 20 years ago?
3. Are artists making better records today than 20 or 30 years ago? Why?
4. Do you feel the southern gospel market is oversaturated?
5. How do you perceive small vanity labels (labels that are a “label” in name but lack resources for marketing, distribution, etc.)?
6. Which artist, past or present, stands out in your mind as an innovator?
7. How do you feel about secular artists recording Christian music and then marketing the product to the southern gospel audience?
8. What do you hope is next for the genre as a entity?
That is all of the questions I have for now. Thank you so much for participating.
Steve Allen
http://www.SquareOneStudio.com
Radio Airplay & Performance Royalties
Posted by Steve Allen | Filed under SoGospelNews.com Articles
Radio airplay is the primary marketing outlet for gospel music. Stations pay for licenses from ASCAP, BMI, and SESAC and the proceeds are distributed to the songwriters and publishers. However, artists and labels have never been paid a performance royalty for over-the-air broadcasts in the U.S. It has been that way since KDKA first went on the air in Pittsburgh, Pennsylvania back in 1922. However, that could change very shortly.
The United States along with North Korea, the Congo, and China are the few countries where radio broadcasters are exempt from paying royalties to artists. The U.S. stands out as the most industrialized nation without any system of artist performance royalties.
On December 18, 2007, the “Performance Right Act of 2007″ was introduced to congress. The legislation would correct a loophole in the copyright law that exempts AM and FM broadcasters.
An organization called “MusicFirst” that is comprised of many music industry associations such as the Recording Academy, American Federation of Musicians, and the RIAA are lobbying support for this legislation. They state that corporate radio has built a huge industry based on playing sound recordings without ever paying the artists. Technology has brought forth Internet, satellite radio, and cable – all which pay a performance royalty. MusicFirst wants corporate radio to be held to the same standards of its competitions and start paying artists fair market value for their music.
On the opposite spectrum of this issue is the National Association of Broadcasters. This organization holds the opinion that radio has been more than fair to artists because radio promotes artists to 232 million listeners every week. They view the Performance Right Act of 2007 as a new type of “tax.” In response they are supporting the “Local Radio Freedom Act” which is legislation that would prevent any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air.
I have tried to fairly represent both sides of this issue. I have made my living in the music business for the past 10 years. Prior to that I worked in radio for four years. I understand where both parties are coming from. However, here is my opinion on this issue. Commercial radio stations exist for one reason – to sell advertisements. That is it. Radio stations do not develop programming for the good of the people. Programming is designed to attract an audience because the stations need people to hear the commercials. What does a radio station do that doesn’t have an audience? They go out of business. A station needs listeners that hear the ads and then patronize the sponsors. More listeners result in higher ratings. Higher ratings translate into higher ad revenue. So how does a radio build a loyal audience that provides them with high ratings? They simply do it by playing an artist’s music. If a radio station could play advertisements 24 hours a day and still have a listening audience they would definitely do that. Everyone knows that cannot work. So, they attract an audience with a product (artist’s music) that they do not have to pay for.
If the Performance Right Act of 2007 becomes law, that means gospel artists and their respective labels will start seeing checks in the mail. A new organization similar to Sound Exchange, which pays owners of sound recordings royalties for Internet, satellite radio, and cable radio use, will likely be started.
Do artists benefit from radio play? Absolutely! Is it fair that radio stations can use our music to finance their business and not pay a royalty? Absolutely not! A fair royalty needs to be put in place. Performers need radio stations and radio stations need our music. Think of this as a co-op deal. Both parties need each other, but lets treat each other fairly.
For more information, here are links for further research:
http://www.musicfirstcoalition.org
http://www.nab.org
http://www.grammy.com
http://www.riaa.com
Steve Allen
Tags: performance right act of 2007, radio airplay, riaa, royalty
Music Business and the NFL
Posted by Steve Allen | Filed under SoGospelNews.com Articles
Have you ever heard an artist on the radio or in concert and thought, “Why is this person singing?” I think that nearly every time I turn on Christian radio. I’m going to give you my honest opinion; most of the music that is in the marketplace is horrible. This problem manifests itself more often in gospel music due to the fact that anyone who can scrap up a thousand dollars can send a song to radio in hopes of cracking the charts (whatever that means). Then we wonder why CD sales have slumped 15 to 20 percent every year for the past five years. The reason is that we simply are not competing with other forms of entertainment anymore.
I had a gentleman recently tell me his hypothesis for the decline of music business revenue. He passed music off as nothing but an “old form of entertainment.” Let us look at another form of “old entertainment.” The NFL is still thriving. The NFL falls in the category of old entertainment however is has continually reinvented itself over the past few decades. In my opinion, music simply is not completing with other forms of entertainment.
The music industry will bounce back. Although the industry is not at its peak, I am thankful for this time. Everything in business is cyclical. Right now, especially in gospel music, the market is weeding out a lot of artists. The market is simply oversaturated. We are at a point where only the strongest will survive.
There are many artists who have a genuine call upon their lives to minister. However, there are many people who placed a call upon their own lives to minister the gospel. For whatever reason, people are simply fascinated with the music business. I have found over the years that people have an illusion of fame, power, and money that comes by being in the music industry. Those who are in it know that it is nothing but an illusion.
So before you decide to send another single out to radio or spend your hard earned money with some recording company that gives you a line-item budget that is padded to such an extent that you can use the excess to make a down payment on a house, consider why you do what you do. Are you called by God or are you called by man?
Here’s the shameless self-promotion. My name is Steve Allen. I produce records and I run a recording studio. Let me know if I can help you.
Steve Allen
Square One Studio
Tags: gospel music, Music Industry, NFL
Building Relationships & Networking
Posted by Steve Allen | Filed under SoGospelNews.com Articles
For years, I have said that success in any area of life is dependent upon one’s ability to build and maintain healthy relationships. The bookstore is filled with self-help books that promise to teach us how to network so we can get a better job, a promotion, or a single that breaks into the top 80. I haven’t seen books on the topic of “cracking the gospel charts” (even though one might argue the charts are inherently “cracked”). The best book that I have discovered concerning people and relationships is How To Win Friends & Influence People by Dale Carnegie. Carnegie addresses several techniques in which we can meet other people’s needs, building relationships which in a perfect world would be mutually beneficial. Most people only look for a “connection”, by which they usually mean a casual acquaintance with a person of wealth or power who pulls a favor if one is needed. A relationship however, takes time to develop: it is a quintessential investment in someone other than yourself.
Let me tell you what drives me crazy… networking or “working the room” at the most inappropriate times and places. I mention this first because this is so prevalent in gospel music. Here’s my primary example: A FUNERAL IS NOT AN INDUSTRY EVENT! Please, don’t pass out your business card or give me your new CD while at visitation. I’ve seen this too many times. At Anthony Burger’s funeral, someone stopped Mark Lowry as he was walking down the aisle, and asked for an autograph. I was told that people asked for Ernie Haase’s autograph while standing at the casket of George Younce. I wasn’t there to see these breaches of courtesy, but I don’t doubt that it is true. A point could be made that these incidents involved fans who did not know appropriate behavior during a time of bereavement. This is sometimes true, but at Roger Bennett’s funeral, I saw someone to whom I had not spoken in years. I wanted to speak a few words to him, and then be on my way. As I approached, I could tell that he was in a conversation with someone. I did not want to interrupt, so I stood back for a few minutes. I could not help but over-hear portions of the conversation. A lady was trying to convince my artist friend to join some type of organization. How disrespectful!
Networking should be an enjoyable social practice that enriches our lives. Build relationships and forget about getting connections. Try getting to know someone without wanting something for yourself. It is amazing what people will do for you when you have an honest motive and pure intentions. Trust me: people know when you are just hanging around to see what you can get for yourself. That is what I call “maneuvering.” You know exactly what I am talking about, too. If you don’t, go to NQC next year and spend about three minutes just simply observing. It is like watching crabs in a barrel. I have a single word that describes people who are always maneuvering: “toxic”.
Here are a few things that I have learned help build relationships. First and foremost: listen. The classic bore is a person who always talks and seldom listens. Second: stop trying to impress everyone you meet. People know a true professional when they see one. If you’re not a professional yet, but aspiring to be one, just know that you do not have to prove all you know to everyone you meet. When I first moved to town, I had a seasoned producer tell me that it was fine to not always have all the answers. Do not act as If you know something when you don’t. Just know whom to call. That is called humility. Third: everyone seeks some type of validation. Freely give it to people. It took me years to realize that I wasn’t the only person doing good studio work. You have to be secure in yourself to admit that someone is good, or even better at something than you are. Lastly, don’t make occasions like funerals, weddings, or Sunday morning church about you. It is not the time or the place.
Let’s Start A Group
Posted by Steve Allen | Filed under SoGospelNews.com Articles
Lately I have listened to the opinions of several people concerning an over saturation of southern gospel artists. Honestly, I have never given the subject much thought. I know there are more artists than I could ever name, but I found myself wondering if indeed too many artists exist. This past year has brought discussion over whether or not a “gate-keeper” can insure artist quality and ministerial integrity. Many feel this type of organization would help reduce the number of artists aiming for the national spotlight. Meanwhile, many dissenters feel that such an organization has zero validity and others have compared the “gate-keeper” idea to Marxism. As I began to reflect upon the over saturation issue, one question kept coming to mind: “Why are you singing?”
I often work with independent groups in the studio. The question I find myself asking to relatively everyone is, “What do you do?” The typical answer is, “I sing.” Now, I already knew that. Of course you are a singer. I will ask again, “Seriously, what do you do?” The second round of questioning is usually met with a confused look. I have discovered that most people do not have the slightest clue about what they do. Let me explain this further. What does McDonald’s do? They sell hamburgers, right? Uh, nope! McDonald’s is a real estate company. McDonald’s owns the largest share of corporate real estate in Russia, and is second only to the Vatican in land ownership worldwide. It is obvious that you sing. It is also obvious that McDonald’s sells hamburgers. It takes a little research to know that McDonald’s primary source of revenue is leasing land to franchise owners. You sing at churches, sell CDs, and receive a love offering. That is the equivalent of selling hamburgers. The calling the Almighty has placed on your life and the vision that God has given is “what you do.”
The Great Commission was given to all. Each person has to find the method in which we are called to spread the Gospel. I have a friend who I find quite inspiring. He left a very good job in the music industry to start an inner-city children’s ministry. Over breakfast on morning I said, “So, tell me what you do.” He said, “My purpose in life, is to rebuke, encourage, enlighten and disciple the next generation. My goal is to share the heart of God with children and to plant seeds in them at an early age.” I then inquired about his methods:
I go churches and do events that are oriented for the entire church body with a focus on youth. We minister biblical truths and make it a fun family event. There are children who do not have a father and that will never hear a parent tell them that they are loved, they are special, and that God has a wonderful plan for them. The only time they might ever hear it is from me.
That is a purpose; that is a vision! Lives are being a changed because we desire God to work through us.
This past weekend I did a live recording for a contemporary Christian band. During pre-production I asked them what they wanted the live recording to do. Without hesitation they answered, “We want those who have this CD to be able to have a worship service in their car.” Usually I hear answers that resemble we want to sell a lot of units, we want to get radio play, or we hope churches will start booking us. That is the wrong idea. There is nothing wrong with selling CDs, charting, or acquiring dates. Here is my point. If you are doing what God has called you to do, there will be evidence of the Lord working through you. They shall know us by our fruits. That evening 14 people received salvation, while others flooded the alters for a time of prayer. God moved in a powerful way because six people had a vision; when asked what they do, they had an answer.
This brings us back to whether there is or is not an over-saturation of southern gospel artists. Here is my take on the issue. I get mentally fatigued when I hear some groups update me on their efforts. It goes something like this:
Well our ministry is really growing. God is doing great things. We just bought a bus. It is a 1953 International and next month our song should be on the charts. We are still trying to get more dates. Do you know anybody that can help book us?
I hear that often. That is not ministry. That is what I call “playing music business.” It is like the person who is always busy, but never gets a single thing accomplished.
Let me answer the question at hand by saying a loud and resounding, “YES!” There is definitely an over-saturation of southern gospel artists. This is primarily the only genre where four guys can stand around one microphone, in an abandoned trailer, in the boondocks, make a cheap recording, and actually get the song played on the radio. There is accessibility in this genre and people take advantage of it. I have never figured out how come everyone that gets saved wants to record an album. There are numerous companies who prostitute our industry with absolute rubbish and folks who do not know the difference between a quality product and scrap that is only suitable for the salvage yard. Therefore, this vicious cycle is perpetuated.
However, talent level should not be the litmus test for ministry. I have worked with several artists who are not top notch vocally, but are covered in the anointing. There can never be an over-saturation of God’s outpouring. Let me encourage you to follow God’s purpose for your life. Ask yourself, am I called by God or am I called by man? Chase the vision God has for you with fervor. If you do not have a vision, diligently pray for God to reveal Himself to you. I promise you He will.
Music is a tool that empowers us with to spread the Gospel. Music should never be who we are. Who we are should resemble God a little bit more everyday. Let us use the gift of music to let the world know they have a life, a hope, and a future through the redeeming blood of Jesus. It is not something that should be used to further our own agenda of power acquisition, recognition, and prosperity. James 3:16 says, “For where jealousy and selfish ambition are, there is confusion and every evil deed.”
The next time somebody asks about what you do, tell them.
Who I Am & What Is On My Mind…
Posted by Steve Allen | Filed under SoGospelNews.com Articles
Hello there! My name is Steve Allen. No, not the Steve Allen, former host of the Tonight Show, just Steve Allen. In the coming months, I will be shedding some light on what some may view as the simple task of making a record. In actuality, the process is complex and sometimes tedious, but at the end of the day it is truly worth every sleepless night.
Let’s think about that statement for a second, making a record. What is a record? You would be rather surprised to learn the many different definitions and descriptions of that all too familiar word. You know, I was shopping the other day and had a brief conversation with a fellow twenty-something about today’s music. I happened to utter the old adage, “they don’t make records like they used to” which prompted her response, “I don’t think they even make records anymore at all.” Hmm, I thought, what could she have meant? I mean, I see records made everyday. I then realized, she thought I meant, vinyl records. She happens to be right. Long gone are the days of the 33 1/3 long play records. But my friends, records, are still very much in production today, even, dare I say, great ones.
It is that brief, yet, insightful conversation that leads me to write a series of articles in which I seek to debunk the myth that records are not being made today. I will discuss the inner workings of a great record. I will ask the questions, “Who should make records?” and “Is a record really what you need to expand your ministry?” We will examine some of the greatest records of all time and find out how and why they have stood the test of time. I will lead you step by step through the creative process of making a great record, exploring the art and science of this process. Finally, I will give you some advice on how to make your record timeless. What’s that? Just who am I and why should you listen to me about making a record? Well, that is a valid question. The simple answer: I am a producer & mix engineer.
If you haven’t seen my face, hopefully, you have seen my name. I have been living and working in Nashville for the past seven years. Along the way, I have worked with many wonderful people in the southern gospel family. Many of whom are my heroes.
My story begins in the rolling hills of West Virginia. Born in Worthington, the smallest incorporated town in West Virginia, I have recorded with more people than live in my hometown. Well, almost. Worthington is 2.2 square miles. That’s right, it’s smaller than a Wal-Mart! I moved to Nashville to attend Middle Tennessee State University in 1998. In October of that year, I heard Scott Fowler on a southern gospel radio station. Now, Scott Fowler, as many of you know, is a former member of the legendary Cathedral Quartet. I took a chance and called Scott after the show to ask if I might intern for him at Square One Studio. The rest, as they say, is history.
My initial project at Square One Studio, when the Cathedral Quartet retired later that year, was as engineer for Scott and Roger Bennett’s new group, Legacy Five. Their critically acclaimed, nationally released first album received two Dove nominations. Since that fateful day, I have worked with a veritable who’s who of Christian artists, including Bob Carlisle, Vestal Goodman, Gaither Vocal Band, Ernie Haase, The Isaacs, and The Old Friends Quartet.
So what have I been up to lately you ask? Well, I have had the honor of helping to make several great gospel records with producer/songwriter Zane King. Most notable was Terry Terrell’s “Back on My Feet” CD. The title cut from that project received mainstream country radio airplay, which is no easy feat. In July of 2005, I worked on the pilot for a TV show called Gospel Music at the River, at the River of Life Assembly of God in Smyrna, TN, starring country music giant George Jones. In May 2005, I engineered a Kirk Talley CD and video, which Talley shared was the best product had ever done. Talley appeared subsequently in a feature article in the August 2005 issue of GQ magazine.
Now, do these accomplishments make me the authority on the record making process? Not hardly. Are there people out there that know more about it than I? Absolutely. Isaac Newton once said, “If I have seen further it is because I have stood on the shoulders of giants.” What these accomplishments have afforded me is the opportunity to stand on the shoulders of the some of the biggest giants in the southern gospel family.
My father told me that hard work always pays off. “Son, make hay while the sun is out”, he would say. Well, it turns out the ol’ man was right. Not only do I feel that I have succeeded in my career, thus far, but I feel pretty darn good about how I have accomplished this feat. You see, I feel that I have a very specific purpose in this world. You might think that making records is that purpose. No, not really. Making records is my job. Being the best man that I can be, loving every human being, giving back to humanity, never letting anyone leave my life with less than they came with, my friends, that is my purpose. It just so happens that my job consists of delivering love to mankind under the disguise of a record!
Until next time, happy listening!
Steve Allen
thank's for the interesting information...