Saturday, December 8, 2012

12.12.12 and Scalpers


           Aside from the recent Grammy award nominations, one of the hottest topics in the music industry is the upcoming 12.12.12 concert for the Robin Hood Sandy Relief Fund. The show is being held at Madison Square Garden and reads like a who’s who of pop music history. Performing is Paul McCartney, The Rolling Stones, Eric Clapton, The Who, Roger Waters (of Pink Floyd), Bruce Springsteen and the E Street Band, Billy Joel, Bon Jovi, Eddie Vedder (of Pearl Jam), Dave Grohl (of Nirvana and Foo Fighters), Chris Martin (of Coldplay), Alicia Keys, and Kanye West. Of course, not all the attention is on the star power.

            A darker issue that has come to light is the secondary market. Like any other major event at Madison Square Garden, the event sold out within minutes. Also like any other event at the Garden, tickets began to appear on the secondary market minutes after the event went on sale. Ticketmaster actually addressed this action by posting on their blog that they were trying to take steps to combat this by cancelling orders believed to be run by scalper BOTS. Scalper BOTS are computer programs used to flood Ticketmaster.com with orders as soon as an event on sale to yield a high number of tickets. Ticketmaster also banned listings from their own secondary markets, TicketsNow and TicketExchange, stating that all the proceeds should go to the Robin Hood fund. This leaves one major secondary market selling tickets to the event, Stubhub. Stubhub has dedicated all their fees from the sales to the charity but says it has no way to make sure profits go to charity. Senator Chuck Schumer (D-NY) has alsogotten into the debate, sending letters to ticket resellers for help not allowing scalpers to profit. Right now, tickets for the event on Stubhub range from $635 up to $32,000. Then again, who knows if the tickets are real or not? This is a factor that no one is talking about. On StubHub especially, often scalpers create fake listings with abnormal prices to make the demand seem higher, yet another unsavory tactic by scalpers to extract profits.

            But are scalpers the problem? Industry pundit Bob Lefsetz recently wrote a new blog post about why most concertgoers can’t get a ticket at a fair price. He says that income disparity is causing the current ticketing crisis in the live entertainment industry. Secondary markets have high ticket prices because the rich can afford it and will pay to get into an event at any cost. He also believes that the industry executives don’t care because they’re raking in the cash. Do I agree with Bob? Yes and no. I do think that ticket prices are higher because people are willing to blindly pay through the nose to be at an event. I’ve seen friends and family do it all the time. I don’t believe the industry is turning a blind eye to it, at least not as a whole. I am a bit suspicious that most events in New York City, and Madison Square Garden in particular, quickly sell out and then are on secondary markets. I’ve been to a few events that do this; coming to mind quickly are LCD Soundsystem’s final show and Phish’s New Year’s Eve shows. Instead of calling out secondary ticket websites, I’d like to see Senator Schumer look inwards towards venue owners within New York to see if they’re having a hand how tickets are distributed. I’d also like to see New York lift its ban on paperless tickets. The state’s inability to embrace the future has made it a haven for the secondary market.

Monday, November 26, 2012

The New LiveNation.com


            Early on, Ticketmaster CEO Nathan Hubbard stated in a 2011 Fast Company article that he wanted Ticketmaster.com to be a hub for music fans to shop, get tickets, and hang out. While Ticketmaster.com itself hasn’t made any changes, its parent company Live Nation Entertainment launched the redesigned LiveNation.com and it has created quite the buzz in the industry. The aim of the site is to tap into the social aspect of going to concerts.
            They’re starting this focus by introducing three new features to the site as outlined by a recent article on Billboard.biz. The first is a concert countdown clock for each event. According to Live Nation Labs’ Eric Garland, the point of the Concert Countdown is to create something you can share and own. The second feature is Showbook. Showbook is a feature that aggregates show photos from Twitter, Facebook, and Instagram. This could be a killer feature, as people love to take pictures at concerts. I think it’ll at least bring traffic to LiveNation.com. The third feature is One Nation. One Nation is a site, which has exclusive photos and videos from artists. This is an excellent use of the company’s connection to artists and hopefully one that will blossom over time.
            So the main question is does it work? I would have to say no. The new LiveNation.com is not the great music site its creators wanted it to be. First, the site is a little hard to navigate. It goes for an iPhone app/Windows 8 look with large tiles. This however means to get to later dates; you have to scroll way down. You can change to a list view but the means to get there are not clear. You have to just look at events for this weekend. Also, there are no instructions on how to get your photo into the Showbook for the event. Reading the fine print of the help page shows that it goes by the photo’s location to mark it but what if your phone can’t find the location due to poor cell service or a remote location. This, in turn, makes it hard to share photos. The site should also have an upload function to add your own immediately. Also the update broke My Live Nation. I can’t log into my account and when I do, it leads me back to the Ticketmaster.com Live Nation skinned site. The One Nation part works well but the layout is very poor. It needs a way to search or seek out the content you would like to see not just what’s available. It also launches with a new URL and in a new tab or window. The site should keep you within the main LiveNation site. Of course, a big factor in all of this is the listings are confined to Live Nation and Ticketmaster venues. If your show is outside of this, good luck. By making the site more inclusive, it could build more loyalty to the Live Nation brand over time. Another great feature would be to link up with the TourBus app to provide show ratings and reviews. Lastly, HypeBot says that this is only the beginning and the real reason behind the site is to begin aggregating the data of Live Nation consumers. This began when the company acquired BigChampagne at the end of 2011. If so, this will mark an exciting move in music marketing and it'll be interesting to see how that influences LiveNation.com but for now Live Nation has a long way to go to make their site a hub for music fans.

Saturday, October 13, 2012

600,000


            That’s the biggest story in the music industry right now. After paltry #1 records with a few tent poles, how does a band like Mumford and Sons come out of the gate that large with only their sophomore LP Babel? After all, 2011 started with the lowest #1 album of all-time, Showroom of Compassion by my beloved group Cake, which only had 44,000 in sales in its first week. Bob Lefsetz tellsthe story in a recent post about the October 13th Billboard 200chart. What he relates is that people thought the album as a format was done but now out of nowhere comes this independent band from England that pulls numbers like it’s the 1990s. Sure a few albums have topped a million their first week, well putting them in the top 20 for Billboard 200 debuts. They have come from artists with a proven track record of success or with a gimmick to help with album sales. Both was the case with Lady Gaga’s album Born This Way, which debuted with 1.1 million sales but 440,000 of those came from a promotion where Amazon.com sold the album for 99 cents.  Born This Way also was the highest debut album since 2005’s The Massacre by 50 Cent.
            But the numbers are only part of the story, the truth is Mumford and Sons’ 600,000 sold is that it’s the largest debut by an artist on an independent label. Mumford and Sons’ first LP, Sigh No More, never charted above number 2 on the Billboard 200. Granted that album did sell 1.4 million copies in 2011 alone, not to add in the copies sold in the previous 2 years it had been available. But 600,000 in the first week is a feat that couldn’t even be done but some of the major labels’ claimed saviors such as the Jay-Z and Kanye West collaboration Watch The Throne, which only had 436,000, and teen heartthrob Justin Bieber, whose 2012 album, Believe, only debuted with 347,000 sold. Lefsetz goes on to say it might be a sign of revolution; that people are becoming tired of processed pop music. I don’t believe we’re at that point yet. But if this is a renaissance of music with heart and coupled with Adele and Arcade Fire’s recent Grammy award triumphs, proof that there is room for independent labels and artists, then I welcome it with open arms.

Sunday, September 30, 2012

The EMI-Universal Merger


          On September 21st, the recording industry took a huge turn towards further consolidation when the European Union and the Federal Trade Commission in the United States approved the takeover of EMI by Universal Music Group. The deal would give the new company 40% of the industry. EMI and Universal are two parts of the current industry Big Four. The group also has Sony with 30 percent and Warner Music with 20 percent. EMI is coveted for its famous roster of artists that include The Beatles, Pink Floyd, Frank Sinatra, and Katy Perry. In Europe, the deal has tighter restrictions including sellingoff certain labels that are currently part of EMI, most notably Parlophone,which was the Beatles’ home at the company. The Beatles catalog will not bepart of the sale.
            In an article from the Huffington Post, it is argued that the merger will stifle innovation on the digital music. In one group controlling 40% of content, one could view that without that pass a project would likely die. According to the article, very expensive licensing agreements have hurt two very popular digital music services, Spotify and Pandora as these agreements make it very unlikely they will see a profit anytime soon. Spotify at last has the Big Four has shareholders so as investors, they have a stake in the company’s success but it’s always easier when you have the content provider in your back pocket. Another article from InvestorPlace suggests Pandora will also be ok because it’s up to politicians to set Internet radio royalties that dictate their cost. Maybe that’s a loophole that can be exploited to avoid having to pass Universal’s approval. Of course, the issue is not existing services, but potential new services.
            My biggest concern with the merger is the state of jobs in the industry. Yes, this big music company will be made of smaller labels, but with a merger always comes consolidation. Why have two marketing departments when you could run it out of one? Will that mean, it will become harder to get the job I want in the music industry going forward. Some would say the rise of independent labels may nullify this but 60 independent labels use Sony’s RED distribution for marketing including the current #1 album in the US, Babel by Mumford & Sons. I wish I had numbers on if job changes occurred during the last big music industry merger Live Nation and Ticketmaster to get a read on this but as we go from a Big Four to a Big Three, I have to believe that the number of people employed in the recording industry will shrink again.

Thursday, September 6, 2012

National Association of Recording Merchandisers


If you’ve ever been part of an industry in the United States, more than likely your company has representatives in a trade association. Trade associations are groups that businesses form to collaborate an also support combined interests. Trade associations have been known to exist in America since at least 1883, when the American Seed Trade Association was founded by businesses in the seed trade. In the music industry, there are two major trade associations. The most well known one is the Recording Industry Association of America, which represents the recording labels. The RIAA is mostly known by the general public for recently fighting against piracy and handing down fines to people who have violated copyright law per its modus operandi to do so. But while the RIAA gets all the press, the music actually has a second trade association that works more towards putting that music in the hands and ears of the fans.
            That association is the National Association of Recording Merchandisers. NARM began as a coalition of wholesalers and retailers focused on physical sales. In 2002, NARM expanded to include all aspects of the music business including digital sales, mobile phone use, gaming, applications, merchandise, videos, and other parts of the music industry. With a board of directors that includes representatives from iTunes, Amazon.com, Microsoft, Target, Verizon Wireless, and Spotify, it easy to see that NARM is a heavy hitter in entertainment. According to press releases, NARM members control 85% of music sales in the United States.
            So what does NARM do? The main thing NARM does is creating promotions and marketing for recorded music first and foremost. Such programs have a “Gift The Gift ofMusic” campaign, which usually shows how music is a great gift for the holidays. They also worked with the Rock and Roll Hall of Fame on the Definitive 200, a list of albums selected to be the best by these two groups. With the trend being buying older music, this is a great idea to promote older records. Beyond that, they also hold free online seminars for members to help people understand the music industry and bring ideas together. The also have an annual conference on entertainment law and another one on digital startups. By looking at these, it seems that NARM is an association that understands how music in changing and wants to remain relevant rather than fade away. I like that. I also feel like as a hopeful member of the music industry, it’s good to have a trade association that feels like it wants new members.
I feel joining this trade association would be helpful to me in that I can known what’s going on using NARM’s massive release database so my clients will known when new albums are coming out. I also feel it would help me see what technology is changing things and maybe even get in the ground floor myself. Again, it also feels like they want to expand and having that knowledge is also comforting.