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Moses Supposes: Why your music career needs a music-business plan

Moses Avalon is one of the nation’s leading music-business consultants and artists’-rights advocates and is the author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be found at www.mosesavalon.com.

You’ve heard it before: “It takes money to make money.” But getting start-up capital requires more than just talent. It means learning to communicate with investors. A business plan is a basic requirement. Sadly, the daunting task of creating one keeps many musicians from their well-deserved success. How can artists, who are not known for their business acumen, get past this major hurdle without blowing their start-up budget or feeling like corporate beggars? Here’s how.

The following is a sample chapter/excerpt from the revolutionary tell-all book by music business veteran, Moses Avalon, called 100 Answers to 50 Questions on the Music Business. Enjoy.

I’ve heard it over and over again from my younger clients: “Do I really need a business plan?” Simple answer, yes, you do…and yes, I know this sucks. This is the part where they start bargaining with themselves: “Why do I have to write this down — isn’t it obvious how we intend to make money?” Another simple answer: no, not to your would-be investors. Their exposure to the music business is probably the mainstream press, who tells them the industry is crumbling.

Over the past few years, even major labels have had to justify costs and income projections to their stockholders with written business plans. So why shouldn’t you?

You have a great product (your music), but you need to think of your act just as any other start-up business. With banks failing and our economy in a state of trauma, your potential investors are scared out of their minds about what to do with their money. If they are even considering investing in a musical group, then they are brave. You need to make them comfortable.

Moses Supposes: Music’s Secret to Competing with “Free” — Raise the Price

Pundits are declaring that, due to so much free music on the web, Amazon’s 69-cent-a-tune program is the ultimate sign of retail music’s demise. But some basic laws of marketing are being ignored within these conclusions. The solution to competing with free might be counter-intuitive: raise its wholesale price. Insanity? Let’s see.

Sometimes it probably seems like I take a contrary position to my fellow music business experts just to stand out. But that’s not true. The truth is that I just read more data than many of them and, therefore, I’m more righter. (Great English, huh?) Such will be the case here as well. For a while, many are saying that now is the time to cut back prices to “compete with free.” I say the opposite. What’s my secret?

History. Looking at history is always more revealing than pontificating about the future. But it does require a bit more research. History tells us what is likely to happen tomorrow, because even though technology may progress at the speed of a microchip, it still hits the road-bumps of bureaucracy and human nature — a constant often ignored by the “if you build it, they will come,” techno-centric philosophers.

Moses Supposes: 19 Music Conferences Ranked

Moses Avalon: 100 Answers to 50 Questions on the Music Business (Hal Leonard, 12/15/10)

With more than 100 music-business conferences in the US alone and most emerging musos on a limited budget, which ones are really worth the investment? The following is an excerpt/sample chapter from the revolutionary new book on music-business survival, 100 Answers to 50 Questions on the Music Business, by industry veteran Moses Avalon. Enjoy.

Maybe for many, the idea of spending thousands of dollars to schlep through airports and hotels for several days, only to end up with a handful of cards/CDs from people in the music business that they will never remember, is dumb. Or maybe it’s worth every dollar and minute that you can spare.

They say that you have to kiss a lot of frogs to find a prince. If you think so, there are a bevy of music-business functions that serve this philosophy. There are medium-grade ones geared towards the college-music scene, like CMJ, as well as high-end ones, like MIDEM, where people with far more dollars than sense fly to the south of France and stay in four-star hotels just to mingle with French lingerie models. (Wait, that’s starting to sound kinda cool.)

Some of these conferences are very useful, but most have become showcases for already-financed acts, not places where true “emerging” artists can get a fair shake — despite what they advertise. The panels often are a disappointment, filled with self-serving pitchmen from unions, PROs, and “indie services,” making it very hard to extract any objective information.

Okay, enough of the dark side. What’s the appeal?

Because the music business is about connections, you need to make as many as you can. Given this reality, I’d say that conferences are a must — as many and as often as you can. But with limited resources, how do you discriminate?

Moses Supposes: Are Copyrights the Vietnam of Today’s Youth?

I grew up in the aftermath of the “hippie” era — the one that made political protests into a social activity. You risked arrest to end the Vietnam War — and met girls. Music was the rallying point. It gave the movement momentum.

Today, it seems that music is at the center of a different kind of youth revolution, one in which the values are far different from its forebears’ movement. Whereas pop music was once the soundtrack of the revolution, now it’s more or less the revolution’s object, manifesting as the “right” to free music. Or, as the P2P culture would put it: the right to access information and liberate music from the shackles of “Big Content,” which cannot accept the death of copyrights.

“Big Content.” Even the term itself positions artists and their teams as part of “the establishment” — the way a cop would symbolize Big Brother. Those who like to share music libraries through P2P services have cast record labels as the Nixon administration, while they, the illegal P2P users, are the hippie liberators, fighting for what they perceive as the basic human right to share that which should be free in the first place.

I get it. I understand their frustration. Content is pricey. A lot of it is junk too. And many in the culture seem to think that the music industry is as big and rich as utilities, oil, or aerospace. They are probably not aware that the music business is composed mostly of creative types, and, if you added up the revenue from all of the US entertainment industries for a year, it would barely reach what energy companies earn in a month.

At the heart of the anti-war movement was the hope to stop bloodshed. Hippies rebelled against something serious — the draft. What is today’s P2P “sharing” movement about? Free tunes? Cheaper flicks? And what are the parents of today’s youth movement thinking? They have to be hoping that their offspring will pursue a cause more deserving of jail time than overturning the copyright regime. What will today’s rebels do when the wholesale illegal sharing of music comes to an end in the Americas (and it will)?

Moses Supposes: Will Obama put the federal kibosh on P2P sharing?

Here’s one story you won’t see going viral on a geek blog near you: the Obama administration is going to make torrent streaming, also known as P2P (peer-to-peer) sharing of music, a felony. A felony. This means, according to the administration’s White Paper, recommending an upgrade to the act of illegal streaming of music to one of “financial espionage,” carrying prison time of up to 20 years.

This would apply to sites and people using, promoting (carrying ad links), and hosting services like The Pirate Bay, Utorrent, Bittorrent, and Limewire derivatives. But what about the sites that just side with P2P and its lifestyle, like Pirate Party, Zeropaid, TechDirt, and Boycott-RIAA? Are they in danger too?

The White Paper, which makes the recommendations to Congress, includes as part of its focus websites that “provide access to infringing products” and would give local authorities “wiretap rights” in order to gather evidence. In other words, sites promoting the P2P lifestyle would be investigated the in same way as street gangs, terrorists, and the Mafia.

What’s New

In theory, copyright laws have always provided that infringement is a federal crime for which you could go to jail, but so far, no one has, unless they were running a factory that made thousands of bootleg CDs. As for the casual infringement by students or grandmothers or even semi-pro infringements, our government has always given the taxpayer a rest, allowing copyright laws to be sorted out in civil court.

But thanks to the Obama administration, we are seeing “change you can believe in” in spades. In a review of the current state of intellectual property, the administration is recommending that Congress upgrade existing laws to make illegal streaming of content and providing access to “infringing products” a felony.

Moses Supposes: Bon Voyage, Bon Jovi

Jon Bon Jovi says that Apple killed the music business. Now he is public enemy number one on the blog-o-sphere. Does he deserve it?

Jon Bon Jovi has learned a lesson of the Internet age the hard way. The lesson he learned is that the techies, who wave the freedom-of-speech flag when it comes to music being free and net neutrality, are not so cool about free speech when it criticizes one of their gods, like Steve Jobs. Indeed, they respond rather childishly to just about anyone, no matter how famous, if even the slightest opinion about Internet-related services is anything less than 1,000,000% positive. (Read what Bon Jovi said here.)

Now, in the before-time, no one cared what geeks thought. They were in the back room. But blogs have given them the big stick in the public debate. And they want respect. They are getting it, but also proving the old adage: power corrupts. Using their new tools, they have silenced and intimidated those that are a threat. If they agree with you, you are launched to the top of a mountain; if you disagree with their position, they can out-SEO you, out-blog you, and make you look ridiculous in a matter of seconds across the entire globe.

Most politicians and other public people learned this lesson years ago. Even I got a taste recently of how infantile some of these cats can get if you throw the slightest criticism at them. (I noticed an error in a Techdirt blog wherein it called IPS licensing fees a “tax” for music. The guy freaked out on me and called me a “liar” all over Twitter.)

Moses Supposes: BS chart of the weak

Boy, it pains me to have to agree with Bob Lefsetz, but his take on this “Chart of the Day” business is on the money. The chart is pure nonsense. And no, my use of the pun “weak” in the banner is not one of my common misspellings.

For those catching up, a chart on Silicon Alley Insider of unspecific authorship titled “The Death of the Music Industry” has gone viral. Most of the sites re-posting and re-Tweeting it as “fact,” no surprise, are those that cater to the technology industry. If you’re a reader of mine, you’ll be able to see the flaws in its logic at first glance. As the tech industry loses its grip on its insidious campaign to devalue music, biased stories of the “dying music biz” become more and more transparent.

In essence, the chart shows the decline in CD shipments and how digital sales have not made up the difference. Duh. Everyone knows that, but how is a decline in CD unit shipments equal the “death” of an industry that still brings in $10 billion per year domestically, and has been growing in revenue consistently over the past five years (albeit slowly) while everything else in the Western world is falling apart?

ASCAP, BMI, and SESAC all have posted record-breaking revenue year after year, and though it’s true that EMI is headed for the auction block, Universal and Sony don’t seem to be selling their corporate jets anytime soon.

The chart bases its logic by showing a decline in units shipped as reported by the RIAA. It’s no secret to my readers that not only does RIAA shipping data not demonstrate the entire music-revenue picture, it doesn’t even give you enough pieces of the puzzle to render the outline. Why?

You want the charts? Here are the charts. (See my chart of the week.)

Moses Supposes: Why we steal music

You don’t have to scratch your head too much to recall that Jim Carrey or [Arnold] Schwarzenegger got about $25 million to perform in their movies, or to remember the $280 million that it cost to make Titanic. I’d like you to ask yourself a question: why in the hell do you know these facts? They are not important to your day-to-day survival, yet they are part of common pop-culture knowledge.

Now ask yourself this: how much did Eminem’s last four albums cost? What about how much it cost to market and promote U2’s integrations into the iPod? What? No answer? The reason you have no idea is because whenever you learn how much an actor is getting paid, it’s not a fact that was uncovered by hard-nosed investigative journalism. It’s in a press release. The film industry wants everyone to know that it’s costing them a truckload of cash to entertain you, the public.

Over the last 60 years, while the movie industry has been investing millions a year in educating us about their costs, the record companies have not invested dime-one on this area. They have not taught us music’s cash value.

You probably don’t even realize it, but one important reason you don’t feel easily comfortable sneaking into a blockbuster movie is because subconsciously you figure, “It’s only nine bucks, what the heck, they spent $100 million to make it.”

Moses Supposes: RIAA and SoundScan clash on sales stats

The following includes slides and facts presented at my NAMM 2011 panel presented by H.O.T. Zone as well as reprinted material from a 2004 article.

In April of 2004, I was working on a piece for Keyboard magazine about bar codes. I was trying to determine if the “free” bar code that many CD replicators provide is a real added value to the indie artist, or just a bogus premium. But what evolved was a much bigger and more important story. Talking to SoundScan revealed a massive untruth disseminated by the RIAA about the reality of declining record sales.

SoundScan (owned by Nielsen) uses the bar codes on CDs to register sales at record stores. The correlated data contributes to the Billboard chart listings, as well as much of the market research used by record companies. Through my investigation, I learned things that would contradict reported statements by the RIAA — mainly that US labels had a significant reduction in sales from 2000-2004.

My panel at the 2011 NAMM show this year is all about getting to the bottom of the fallacy that the music business is in disarray, and this means understanding why SoundScan can say that sales are stable yet the press — the RIAA — can say that sales are plummeting.

So to facilitate that, I’ve reprinted the key portions of that April 2004 article in this piece.

Moses Supposes: Will HD Radio lead to “hear ‘n’ buy” technology?

You want the 2011 Consumer Electronics Show in one sentence? 3-D TVs, every iPad accessory you can think of, and competing tablet computers. There, I just saved you a trip to Vegas.

Think you’ll never want a 3-D TV or an iPad? You’re wrong; trust me on this. Sony, LG, and a few other minor players are going to make you want 3-D so bad you’ll buy personalized eyewear just for the experience. And as far as juice for the iPadophiles — I cover that after this next thing.

What’s above is for the general public. But for us in the music space, I saw just one significant piece of new technology. Granted, I only got to cover 200,000 of the 1,000,000-square-foot show, so I’m sure I missed a few cool production gizmos. But I’m not impressed anymore by all the studio toys. Show me a new way to sell millions of records, and then I’ll get a woody.

And one exhibit did: HD Radio.

Moses Supposes: PCMag flips RIAA the bird

If you ever had any doubt that the ISP industry is at war with music and other content providers, this should put the controversy to rest. When a popular consumer computer magazine acutely and brazenly facilitates its readers to steal music via P2P, even after all the court battles, how can there be any room for doubt that this is anything short of a deliberate attack?

Even with ruling after ruling that clearly states that file sharing is a crime, even after every single legal argument has been made and defeated as to how file sharing commercial music might, in some extreme interpretation, be legal, some people just don’t get it, or just don’t care.

Moses Supposes: Epic gives up the Ghost

Ah, what happened to the days when being a music executive meant that you could party with the acts in your office, sleep late, yell at underlings, and get rewarded even if your numbers were bad? Well, they’re still here, unless you happen to have one important character flaw: a vagina.

You gotta read this Hollywood Reporter article on the firing of Epic president Amanda Ghost first, if you haven’t already.

You know, I’ve always said that as far as sexism is concerned, the music space defied the odds. We have far more female executives in positions of true power than probably just about any other industry, except maybe TV.

In my first book, Confessions of a Record Producer, in the “Miscellaneous Myths” section, I actually have a chapter called “Are Women Discriminated Against in the Music business?” Using statistics and raw data, it proves that the answer is “no.” We have a great deal more gals in the driver’s seat than any other biz. But after what Epic and, independently, the law firm of Boies Schiller have done, I think that I need to take another look.