SanFranMusicTech/Timberlake’s Matt Morris…

18May09

650 attendees, the vibe of a rock concert, and lots of lox.  How cool is that. Eventhough dozens of digital media events have played out in the past week, SanFranMusicTech wins hands down for best time had by all.  Emotionally intense, Ted Cohen and Rob Pegoraro had the audience bellylaughing with hilarious riffs, while there was table pounding and a near brawl at the EFF UMG panel.  Justin Timberlake’s label TennmanRecords was on hand promoting Matt Morris, who tweeted and videod the audience during his 30 minute set, and enjoyed himself so much that he stayed on for the afternoon.  Truly a love fest.  Great job by producers, Brian & Shoshana Zisk.  Here’s a video snapshot from NBC reporter Laurence Scott at NBCBayArea.com and the interesting things said:

Music Business
– Bands + Brands = $
– Make money with sponsorships, concerts, merchandise, ads, subscription, upsell
– As cost of production and distribution approaches zero, there is an expectation that the cost will go to free.  Why is $15 a gouge for a CD, when a $5 cup of coffee at Starbucks isn’t, does cost a $1 to make the CD or millions
– The longtail is aspirational, the artistic middle class DIY ethos, publish your own songs, book your own gigs, lift off selling your own CDs, don’t quit your day job, most fail because they don’t put in Gladwell’s 10,000 hours, release tees between albums as content to keep the conversation going, dont let them run out of stock, the more you have the more you can sell, www.zazzle.com
– OK to give the music away but retain control over the list, fans downloading the ColdPlay live album are asked to opt-in for email
– Radiohead gave album away for weeks, then sold $80 box sets
– Giving away can mean streaming, free download for a limited time or free single, the freemium model
– Major label/major artist $5mm advance on record, need to make the tradeoff on recouping the advance vs catalyzing casual buying from giveaway
– Fans are going to listen to what they want when they want, follow fan conversation, shift releases to meet demand, swim with the audience
– Lots of talk about Matt Nathanson 

Breaking a Band
– Expectation that it takes 3-6 months to break a band is unreasonable,took MySpace 3yrs and Facebook 18 months, need to treat bands as Silicon Valley  start ups and culitvate their fan base.
– Can’t leverage Band A to break Band B, fans are not for sale, but you can slipstream in playlist and have little band open for big band.
– Ted Cohen’s client Sara Haze went from 100 streams a day to 2000/day after music featured on The Hills. Fans tweets can lift band out of obscurity.
– TuneCore distributes music globally including iTunes, SonicBids gets you gigs, CDBaby, ReverbNation, Spotify.. 
– iLike, Lala, imeem, Last.fm, Stereogum for for social music discovery
– The browser is the iPod, content finds you in the cloud
– iLike (45mm) helping bands create a single page for iPhone, MySpace, Facebook, Twitter, YouTube, and integration with Ticketmaster  
– depending on the demo hi5, Bebo, Orkut; you could make a big splash on a little site like buzznet, vampirefreaks which have niche audiences 3-4mm

Fan Marketing
– One band member needs to be the social media maven who not only pushes what goes out but watches what comes back, and responds
– Domain name needs to point to MySpace or FB page, even better make homepage a hub, see FallOutBoy, this protects from FB, MySpace fickleness
– Three parts to managing the artist:  list aggregation for permission-based direct marketing, ecommerce merchandising, community-calls to action
– Its best to have all the rights, recording and merchandising, for consistent messaging, quarterbacking the fans and avoiding redundant/missed communication, hard to connect with artist if all over the place
– Store is usually the most frequented section of the site, arty tees are a great way to for fans to finance and promote the band, microbrowsers on merchandise
– Remarketing is expensive, need to get a word of mouth marketing machine moving through the tastemakers, friend feeds, tweetdeck
– Widgets don’t work unless they live where the fans live in the apps world (still waiting for the app that turn bad music into good music) 
– FB v. MySpace, FB are the people you know and trust for recommendations, MySpace are the people you don’t know but help you with discovery

Messaging Each Fan
– Email blasts don’t work, there is a messaging threshold, 16+ emails/year is overkill, under 16 emails/year – double the fans at less effort
– when a fan comes to your site you have one chance to make a big impression, reaching the individual pays off big time, 121 engagement
– WBR artist promo about romancing the fan, making personal connections
– Ashley Tisdale comments on fan videos on YouTube launched her solo
– Not just pushing the same info out of FB, Twitter, MySpace, email, mobile 
– Twitter hashtag allows bands to connect with fans after tour
– Richer two way conversation allows for ongoing relationship with fans 
– LBJ said one handshake is worth 200 votes
– Be open, transparent, ubiquitous and authentic, consistent with who the artist is, lead with your passion, if all you can do is speak to them through your music that’s more honest than hiring a PR person to pretend you’re something you’re not, artist ego needs to be considered, need a thick skin to deal with Twitter hecklers

Giving Superfans More 
– Fan classes – most want free, 5% Superfans happy to pay $200 premium for access so keep special sauce for the Superfan,
– 5% audiophiles care about the audio quality, can’t upsell bad quality
– Todd Rundgren talked about subscribing to an artist 15 years ago, $30 fan clubs, Zannel.com Dane Cook backstage pass $2.99 iPhone app
– $150 for a limited edition Neil Young box set
– It costs 10x less to sell to fan who has bought before, give discounts and promos to Superfans to sell out show early, Superfans like knowing that the band knows them and that they know how to contact the band 
– If you’re touring 40 dates, sell a $500 pass for fans to meet you at each stop

 Apps
– Ocarina, 900,000 downloads at $.99, decided to sell at lowest possible, believe its better to be known to raise prices (sense of uby now before prices go up) vs lower prices and incur the wrath of those who paid too much in the comments, drive traffic to app store via YouTube teaser videos
– LyricFind launched 4/23, 3.5 weeks ago, 1.1mm tracks, 2000 publishers, licenses out to everyone including Rhapsody, Slacker, will soon have a version that allows for scrolling singalongs, #1 app in Canada, #7 in US, hundreds of thousands of free version, respectable amount of paid at $3.99 (100,000 downloads gets you to #8).  Price elasticity from $.99 to $3.99 so decided to sell for highest possible
– Tapulous, 1 year after launch largest audience in the app store, 10mm free, 250,000 paid, able to get Tap Tap Coldplay $4.99 app 10 songs because of scale that freemium built, 40,000 daily, Th-Su demo shifts to iPod Touch disproportionately engaged, staying in the top 50 gives you organic buzz, structure app descriptions, ad spends, exclamation points, not clear if Apple’s ranking is based on units or dollars, iPhone 3.0 with commerce make money skinning the app, selling virtual goods, balls, themes, elements, avatars, ingame enhancements, music.  Apple not allowing commerce on free apps so expect all apps to fall to $.99.  Apple also not allowing virtual currency.  Fart app with a half-life of weeks pays for college not investors. Tapulous sees gaming as a service, and a way for players to discover and become emotionally engrossed with music featured.
– Apple’s approval process is like root canal with too many gatekeepers but its better than dealing with Sprint’s 30-40 low end java devices.  With 1B downloads, iPhone has device, ecosystem and critical mass – a device that delights, an ecosystem that makes development, distribution, monetization easy/fast, can rise to top if resourceful, and an engaged passionate installed base, and a bonafide gaming platform, experience is rich with high-end performance graphics, powerful CPU
– MobiTV old skool carrier apps for java, brew, windows os, palm, monetized by subscription, carriers have to overcome that 5gb monthly cap not on iPhone in US.  Sprint Boost Unlimited.  Palm Pre has a chance.  Android little clunky.  BB expensive – a work in process.  Wild cards are Ovi, Windows.  iPhone only a tiny fraction of phones out there.  MobiTV on 30% Verizon 90mm subscribers, ATT 84mm subscribers
– FloTV excellent but limited, MobiTV everywhere
– Pandora, sells $1 million in music a month, iPhone accelerating music purchases, TSL time spent listening, 3 hours on the web, 1 hour 40 min on the iPhone, $20mm rev, 2008, now at scale advertisers seek for creative digital ad buys, 500,000 listeners/day, audio commercials no more than 15s
– www.quimondo.com for apps analysis 
 
Royalties
– SoundExchange v. NetRadio nearing a reasonable resolution, was expecting Mike Huppe of SoundExchange to show up in a dark cloak and bwahaha laugh, he doesn’t look like Darth Vader at all, there was even a point made that he’s off the most evil list, why he fights big radio to get starving artists their due, writes 70,000 checks a week, a real superhero, investment needs to be made in better systems to get the money flowing to the artists, majority of royalty payments made to SoundExchange is from Satellite, now going after broadcasters to pay what the rest of the world/online does for performance rights, www.musicfirstcoalition.org
– We are now upon the 4th golden age of radio – 1st being the radio shows, 2nd being Top 40, 3rd FM music, AM talk, 4th net radio with 42mm listeners a week, personal, visual, and Goomradio says scrolling lyrics are on the way
– People leaving terrestrial because programming is all dreck, now that there is choice, cater to taste and do it on demand, www.radioparadise.com, concert promoters need spin count metrics from net radio 

EFF
– for radio, there are three royalties:
– mechanical – reproduction rights -musical composition (Harry Fox Agency)
– performance rights -musical composition (ASCAP, BMI, SESAC pay songwriters and music publishers, only RIAA/SoundExchange distributes statutory royalties directly to the artists). If you hear Madonna singing Justify My Love which was written by Lenny Kravitz, on net radio, Madonna is paid by SoundExchange for performing the song, and Lenny Kravitz is paid by BMI for writing it.
– master use license – sound recording rights paid to label
– all fans who love music are legitimate, people are not generally thieves- RIAA (made up of the 4 major labels +) gave up suing fans one at a time, sued 35,000, P2P is the digital marketplace only 10% is sold via iTunes, Rhapsody
– 10 years after Napster, blanket licensing best solution, Napster failed because it didn’t work on the iPod, noone is going to pay $30,000 for the music on his/her iPod
– when sports lost seats in stadium they took it to cable, Chorrus want network node license, ISPs to charge for music, experimenting on campus to see how many opt-in and at what price per month, $5?  $8? pennies? and is it enough for the rightsholders

Mixing in the Crowd
Jeremy Welt, WB Records rep Eric Clapton, Metallica, Ashley Tisdale..
– TopSpin, Ian Rogers/James Lamberti 
rep Eminem, Brian Eno, David Byrne 
– Braxton Woodhan & Adam Zbar, Zannel.com rep Dane Cook..
– Ken Komisar & Navin Watumull, Tennman Records rep Matt Morris..
– Terry McBride, Nettwerk rep Avril Lavigne…, YYoga social third spaces
– Ted Cohen, TAG Strategic, rep Sara Haze
– Matt Burrows, iTunes Senior Counsel, Apple 
– Zahavah Levine, Chief Counsel, YouTube
– Bob Kohn, who wrote the book on music licensing
– Dave Allen, Bassist, Gang of Four
Chuck Fishman, Cisco CMSG, fONKSQUISh
Mistah F.A.B.
The Sippy Cups

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One Response to “SanFranMusicTech/Timberlake’s Matt Morris…”


  1. 1 DigMediaRev

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