Jarome Matthew’s Blog

I’ve been hinting at a big venture I’ve been involved in and working hard on with my partner Roshena Huang for some time now, even though haven’t said much lately, but i’m ready to start talking more about it. It’s the relaunch of my record label, Pro Soul as a totally reinvented company… more on that later. First though, why exactly did we have to reinvent the company? Because the music industry is drastically changing as is more than evident these days.

So where is it going? Well, no one can really predict the future, so we can really only guess. As Andrew Dubber has said, Anyone who says that they know where the music industry is going is either a liar or a fool. Either way, ignore them.

We DO know what the future of the music industry WON’T be. The future will not be the past.

That means if you’re doing what you were doing ten or even five years ago, you are simply not relevant in the music business! If you are not undergoing an aggressive period of radical change, completely redesigning your business from scratch in this industry right now considering where things are going, then your in trouble, just like the big guys.

So that is what were doing with Pro Soul - aggressive, radical change and complete redesign. And it’s a lot of work, but it’s also very exciting and different, stay tuned!

From Soundscan stats released at the yearly NARM conference:

- 80,000 Records were released in total in 2008
- 80 percent of them sold less than 100 copies each.
- Most sales were from only 1000 titles
- Only 10 percent of hit records represent actually purchased music

And regarding copyright according to Andrew Dubber:
“It’s estimated that less than 2% of all music that has ever been released in a commercial format is currently for sale in any way, shape or form. That 6-million tracks thing that iTunes goes on about is hardly even the tip of the iceberg.” (Because of corporate ‘copyright hording’, preventing creators from access to their own works)

There are many more, but I don’t want to overwhelm you…

I’ve just finished producing a fantastic new cover song for Heather Doré’s Pop music debut. I’ll tell you more about it soon when she launches it. She is a 21st century artist, so she is releasing her music, as it is completed, from her website, and you don’t have to wait, you can get it right away!
But releasing a cover song for digital distribution only from her own website has proven to be complicated as many simple things are in the music industry as it is overrun with paranoid obsession and unbelievable bureaucracy…

If you want to release on CD, or on iTunes within the country it was produced, then it is much more simple, but on your own website, where anyone in the world can buy it? Problems.
This is because the music industry works on a per country basis, that’s why it took forever to get iTunes in most countries because of all the deals and paperwork they had to do for practically every song.

That’s right, the corporate music industry complains, bitches, moans, publicizes and sues about losing money, but they make you jump through hoops and practically give up your first born child to help them make money with their music! Just give us what we want! How simple is that? It’s what, the first rule of business or something? Give the customer what they want. How could scores of billion dollar corporations worldwide forget that rule? It seems intense greed and lust for power blinds one quite severely, and this is why they’re losing money, NOT because of downloading. They would rather destroy their entire business before making it easy for you to give them money.
Good, change is good, and this is all causing music business to move back in the hands of the artist, making the importance of good music key. And that is a very good thing! Ok, rant over.

Basically I am still on the phone with the Canadian Music Rights Reproduction Agency and the song publisher regarding the song, so I don’t have any definitive answers for you. (The CMRRA doesn’t even have anything about digital distribution on their website, but at least we have such an agency to make some things a bit easier than they would be with payment of mechanical royalties in Canada)
What I can tell you is iTunes has done a deal where they pay out royalties as required for sales in each country for cover songs sold, so that simplifies things when releasing cover songs digitally this way.
But if you want to sell the songs on your own website to the world, which is my recommended method of selling music (NOT on myspace or facebook, but on www.yourname.com personal website), you have to obtain special rights for the world to sell the song, AND pay monthly royalties to the publisher yourself with detailed financial statements. And you may have to negotiate with different publishers for different parts of the world. Imagine having to negotiate with 3 or 4 publishers for each country in the world just to sell a song digitally from your website! Within 5 years, most music will be sold electronically!

So you think, ok how hard can that be, you just pay online at the publishers website with a credit card, right? Sorry, you must be taking about an industry that is efficient, progressive and meets the needs of it’s customers, and that’s not how the music industry works, and that is one of the many reasons why they are losing money.

Needless to say we aren’t going to work on many cover songs any more, as fun as it may be.

Last year I blogged about how the music industry is changing along with a lot of others…
Recently, A very detailed 18 page report has been published by renowned technology and market research company, Forrester. I don’t have access to the entire article, as that would be expensive, but here is the essence of it:

• Half of all music sold in the US will be digital in 2011 and sales of digitally downloaded music will surpass physical CD sales in 2012, reaching $4.8 billion in revenue by 2012, but in 2012, CD sales will be reduced to just $3.8 billion.
• “Media executives eager to stay afloat in this receding tide must clear the path of discovery and purchase, but only hardware and software providers can ultimately make listening to music as easy as turning on the radio.”
• The average MP3 player is only 57 percent full, suggesting that the devices are underutilized (correct in my case)
• DRM(digital rights management copy protection)-free music enables every profile page on MySpace.com or Facebook to immediately become a music store where friends sell friends their favorite tracks
• Cable TV style subscription music services will show modest growth, reaching just $459 million in revenue in 2012, while experiments in ad-supported downloads will be silenced by the powerful combination of DRM-free music and on-demand music streaming on sites like imeem.com
• It is now very clear: Digital Ownership IS The Music Model For The Future
• Forester’s recommendation to the ailing music industry: Solve The ‘Discovery Of New Music’ Problem Consumers Have First, Then Get Out Of The Consumer’s Way!

And the MOST important finding of this whole article in my opinion is:
“The industry has to redefine what its product is,” said analyst McQuivey. “Music executives have spent years tracking CD sales. But the ARTIST is the product — not just the source of it.
New forms of revenue will come from unexpected sources. For example, the industry has failed to capitalize on the growing popularity of video games such as Guitar Hero and Rock Band. In a market where musicians are happy to sell a million copies of a CD, a video game market where titles can sell five million copies is enough to motivate even the most depressed music executive.”
The Forrester report is based in part on a survey of more than 5,000 consumers in the US and Canada.

I found it particularly interesting that way back in 2001, Forester did a study that the industry essentially ignored that proved digital music sales to be the future of music.

More here: www.news.com/8301-10784_3-9874319-7.html
Forester document: www.forrester.com/go?docid=43759

I have been consulting a great deal with people and the artists I work with about the massive changes in the music industry lately. It is long overdue that I make an official blog post about it.
But how do you sum up what equates to declaring the death of gravity to a physicist in a short blog entry? It’s a challenge, however, now we know enough to confidently make some bold statements about where the music industry is going and I will very briefly summarize them here:

• The music industry is moving away from corporations and back to the artist/musician where it should be (this is a very good thing for you, the artist, but more rights and control means more work and responsibility)
• Giving music away for free and digital downloading doesn’t hurt music sales, it is in fact the only way music is purchased, and essentially has been for a long time. (The myth that downloading is hurting sales is propaganda that corporations have spread in attempt to retain control they are losing over the music industry - see first point)
• Music as an emotional commodity has become about building and selling relationships, NOT selling a product. Build a strong following and fans will support you in all your efforts. This will soon become a philosophy for all business in the near future in my opinion.
• The Internet now fully into it’s web 2.0 phase is the way that artists can independently build a strong business without corporations or other companies due to it’s many resources. (This is covered in detail in Andrew Dubbers’ free eBook which I blogged about here, and links to some of these can be found in my blogroll/links page
• Blogging and social networking is one of the most important ways to accomplish the above and embrace the new music industry and start building your audience.

So these are some pretty drastic changes, I mean, telling artists they need to give their music away in order to sell it when they have been told that is stealing and will cost them sales? Well, I have started to do it myself as mentioned here, and many professionals, industry experts and artists have proven these points to not only be true, but very successful, artists like Jonathan Coultan. He may not be famous enough for you to know him, but he’s an independent artist making a living from his music using these very techniques. There are articles about it all over the internet. Major artists like radiohead have been starting to make changes as well, selling their music by donation, and a lot of people not only think they’re crazy, fellow artists think they are ruining the music industry. But those people haven’t studied the proven facts about where music is going.

I have been researching this for some time now, particularly for a course I teach at a local college as part of the full time music program. I also offer artists consulting on effectively using these techniques. I don’t have all the answers because no one does yet, things are still changing and progressing. But I can see where things are going, and it is a good thing.