GARRISON’S BLOG

Kudos to John Jurgensen (WSJ, 7/31/’09) for picking up on the Seattle- and Portland-based Modest Mouse, not just for their solid melodic tunes but for the indie band’s lessons on marketing music. The band has put out several singles on some very cool-colored vinyl and is free-streaming on Stereogum and Modestmousemusic.com. This Tuesday’s release of “No One’s First, and You’re Next” will combine 8 new and rare tunes. You can follow their tour on a photoblog on www.modestmouse.com.

According to a report out of Tokyo (Investor’s Business Daily, 7/31/’09), “sales of the once unstoppable Wii console have tumbled for the first time since its launch three years ago, sending the game giant’s quarterly profits down 61%.” Prior to the bad news, Mario Kart Wii and Wii Fit notched holiday sales records just half a year ago. “Nintendo’s sales in the Americas fell 38%…troubling signs for a company that derives 87% of its revenue from overseas markets.” A stronger yen reduced Nintendo’s net overseas profit value after repatriation to Japan but the dark clouds impacted the entire gaming industry. Sony’s Playstation 3 and Microsoft’s Xbox360 are both looking at lessening sales. Deutsche Securities analyst Satoru Kikuchi blamed Nintendo’s falling sales on the lack of bockbuster games: “These casual gamers and light users (are) getting bored. Nintendo needs to keep their attention with new software, but that hasn’t happened.” We’ll see if Wii Sports Resort, New Super Mario Brothers Wii and Wii Fit Plus can pull Nintendo and others out of the slump.

The problem with illegal downloading is that there are too many young adults who want to use it as a surrogate parent to get what they want without paying for it. Yes, I’m on my soapbox again. I am an advocate of every indie artist out there trying to grow their musical passion into a legitimate business for which they are entitled to get paid and they’re getting ripped off by the very peers who claim to love their music but who are enjoying it without paying for it. When I hear about a Boston attorney defending a grad student’s Kazaa file-sharing on the basis that he was “a kid who did what kids do” (Investor’s Business Daily, 7/29/’09), I say ‘bullshit.’ Like the young ‘adult’ I encountered who ripped off U2 music with the lame excuse that U2 has enough money, Joel Tenebaum ripped off Green Day and Aerosmith with the same flippant Internet shoplifting attitude. And, when you steal from indie artists who don’t have near the money of their major counterparts and are trying to make back and possibly even profit from their music I am lit with the arrogance of not just the people doing the ripping off but of Harvard Law School Professor Charles Nesson for condoning it. So that the subset of self-designated “entitleds”  get it, let’s pool their  paychecks into a fund for songwriters, performers, backup singers, sound engineers, producers and others involved in the creation of music and see how ‘cool’ the reverse experience feels. Start paying for the music that artists are busting their asses and their wallets to create. And, please, leave your arrogance about everything you know about music at home. I don’t respect your boasting about an artist’s music when you’re picking their pockets at the same time to get it.

I was talking with an indie film producer who spoke to me about the number of illegally-downloaded versions of his latest production that had occurred and how he could no longer fund his own films if people kept stealing his royalties. I was reminded of a guy who paid $250 for his iTV and then bragged about not having paid for the films he had stored on it. You get the point, pathetic as it is.

In an article in WSJ (7/29/’09) by Sarah McBride (“Studios Sue to Stop Pirate Bay”), the major Hollywood studios are  requesting that a Swedish civil court impose an injunction against the operators of Pirate Bay (in the process of being sold to Global Gaming Factory X AB as of August 27th) to stop both its operators and its ISP “from making copyrighted movies and TV shows easily available on the Internet” together with an undisclosed fine. The studios hope to build on their success earlier this year in criminal court against Pirate Bay’s aiding copyright infringement.

I’m holding my breath with a sarcastic “yeah, I’ll believe it when I see it” at Global Gaming’s Hans Pandeya telling the major records labels and studios that he wants to transform Pirate Bay into a legal site paying copyright owners for user-shared media. Until proven otherwise, on the tails of a Swedish court sentencing the Pirate Bay crooks to prison time and three million dollars, Pandeya brings back memories of the professional wrestler offering an apologetic handshake at center ring with a blunt object hidden behind his back. Come on, Pandeya, are you telling me you bought Pirate Bay with an altrusitic business model in mind? Where did Global Gaming’s Wayne Rosso’s confidence go about the plans to bring Pirate Bay to fruition that led him to walk?

MTV has given artists a new first step toward having their music reach gamers by launching Rock Band Network. Any artist, signed or unsigned, can submit songs for consideration in the Xbox 360 version of the game (Sony Playstation 3 and Wii to follow). As long as your tunes are of playable quality with lyrics that don’t offend anybody and your copyrights are clean, you’ll be able to submit your music through Harmonix game developers who will make the call and decide if your tracks will be available for Rock Band gamers in a store separate from the existing one. You can even set your own price from $.50 up to $3.00.

For indie and unsigned artists, Rock Band Network is a new portal opportunity through which to use the video game to market and sell your music. Considering that the 700 songs already available have spawned a whopping 50 million downloads, Rock Band Network presents artists with an opportunity to leash the MTV behemoth as a new channel for sales and exposure. And because MTV is leveraging Rock Band Network as a music distribution vehicle, interactivity can take a higher position in an artist’s marketing matrix.

As I always caution, look at both sides of every opportunity. MTV will be challenged to manage a predictable tsunami of submissions and will need to maintain standards so that Rock Band Network doesn’t become the dollar bin step sister to the existing store. That said, if MTV does everything right, the new store will open up terrific new opportunities for artists to push their music business further than before.

Check out the article “Musician, Market Yourself” in the New York Times by Brad Stone:

http://www.nytimes.com/2009/07/22/technology/internet/22music.html?_r=1&scp=6&sq=%20brad%20stone&st=cse

For those indie artists committed to bypassing a major label deal and doing their recording and marketing, Polyphonic is worth looking into. Formed by  music industry trio Adam Driscoll (Mama Group co-CEO), Terry McBride (Nettwerk CEO) and Brian Message (ATC & Courtyard), City Fund is the $20 million angel behind Polyphonic to help artists fund and further their careers.

The cool thing is, for a 50%-50% share in the profits (none have been consummated yet), indie artists can retain ownership of their master recording copyrights while Polyphonic gets the right to revenues from use of those copyrights during the contract term plus 10-years as well as a percentage of merch, touring rev, licensing and branding sponsorships. Polyphonic’s venture capital formula enables them to cover the bigger costs of recording and marketing an album with the currently favorable revenue stream from “live” sales channels. The ownership trio is leaning towards artists who have gone down the major label route, decided to go indie and have the potential to produce an ROI.

For me, the trend away from the major music labels (Sony Music, Warner Music, EMI, Universal Music) to indie-pendent music entrepreneurship is part of the growing recognition of SMB’s (small-to-medium-size businesses of all types) ability not only to restore confidence in an ethical capitalist model but to rejuvenate an economy from the grass roots up. As indie artists become more and more recognized as investment-worthy business enterprises, we’ll see more venture capitalists emerge like Marc Geiger’s not-yet-formally-announced Self Serve. On another level, the majors are bending their backs to attract indie artists by replacing  their “360 (we get a piece of everything) deals” with compromises around things like control and ownership of the masters in exchange for artists assuming more of the risk. The least common denominator is that indie artists are calling more and more of their own shots as businesspersons and being respected for it…and I’m digging it.

The BBC announced nominees for the ‘09 Barclaycard Mercury Prize which goes to the best British or Irish album over the past 12-months. Usually a mix of mainstream and unknown artists, Brit rockers Kasabian (nominated for its 3rd album, “West Ryder Pauper Lunatic Asylum”) and singer-songwriter Bat for Lashes (nominated for her 2nd album, “Two Suns”) highlighted the ‘09 lineup competing for the $32,800 top drawer prize. The nominees include: Friendly Fires, the Horrors, Led Bib, LaRoux, Glasvegas, Sweet Billy Pilgrim, Lisa Hannigan, Florence, Speech Debelle and Florence and the Machine.

The intro production to this Toto “Africa” remake wails! Talk about using yourself as an instrument and an effect. Kudos to Perpetuum Jazzile, an a cappella jazz choir from Slovenia. Awesome vocals and originality. Thanks, Betty-Lynn, for sending me this.

http://videos.komando.com/2009/06/18/african-thunderstorm/

I’ve got to credit Gloria K. Fiero in her book, The Humanistic Tradition for this indie gem: “Tempermental and defiant, (Beethoven) scorned the patronage system that had weighed heavily upon both Mozart and Haydn, and sold his compositions as an independent artist.”

The backs of business models supporting online music sites like Pandora and AccuRadio were able to straighten up as royalty payments to SoundExchange were agreed upon by artists and labels after 2-years of dark cloud debate. There’s still the 30-day period during which webcasters can opt-to-adopt the new deal or either resort to the Copyright Royalty Board rates or go through further elongated negotiations with each artist and label. Given the labor and lack of appeal of the latter and the death blow regard for the former, the collective sigh of relief on the part of the webcasters is good indication that the month-long moratorium is merely a formality.

If you’re an active “free” listener on Pandora be prepared to be hit with a $.99 fee to go beyond 40-hours which will give you access through the remainder of the month.

Here’s a simplified look at how the per song/listener rates shake out:

Proposed CRB per song/listener rate: $0.19 by 2010

Under new deal:

Large webcasters ($1.25 M/year):  $0.14  by 2015

Subscriber services: capped at $0.25 by 2015

If you’re used to listening to music online, it’s safe to say your service will be there for you for a while. Maybe this period of relief will enable Pandora to focus on alternatives to its required Amazon Advantage Program fee to artists for getting their music heard.