Saturday, November 21, 2009

Going Local

This is the time of year where we expect to see an increase in our local music offerings at The Cedar. From about mid-November through mid-February the mix of local artists, which generally runs at about 30% of our overall programming mix, tends to spike a bit. It's not just because national and international touring artists wisely stay away from Minnesota weather at this time of year... it's also because winter touring in the U.S. in general is fraught with weather risk, so our best local talent also tends to stick around.

It was a happy coincidence, then, when I was asked to appear on The Current's Local Show by host David Campbell for last weekend's edition. I got to play a wide sample of local music tidbits, and talk up some upcoming shows. For those who missed it, here's a stream of it:

Next weekend also tends to be a big one for people going out... after Thanksgiving there's a need to get out of the house (maybe to escape the extended family staying there?), and socialize with friends around for the holiday. So we've arranged to have two of our most popular and talented (and our personal favorite) local acts double-bill Friday and Saturday night. They will take turns headlining each night, and each have picked different special guests to open as well. So, the two shows will be different enough that you may actually want to consider both, but the advice would be to at least make sure you don't miss one or the other:

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I will now attempt to move my iTunes/Steve Jobs debate with Veronica Fever towards a conclusion, but she may have actually immortalized the new handle Fevers by replicating the exact symptoms of an annoying virus that keeps re-appearing...

There's simply too much to rebut in her last post, and I suspect folks are getting more tired of the debate than even I am... but I do need to correct one of her misrepresentations: I am, in fact, not a content-owner. Almost everything I continue to represent on my two record labels, ESD and NorthSide, are licensed from other content owners. And in the handful of recordings in which I actually do have some ownership, in no case am I the majority equity holder, it always being shared with the artist themselves.

I say this because "content owner" has become code for greedy corporate interests, thanks to the major record labels, which have only promoted this image by predictably acting like greedy corporate interests since the invention of the record industry. But this makes "content owner" an easy target, which can then be substituted in these discussions for consideration of any actual value placed on the content itself.

For example, the logic used to be that CD prices were too high, because after all, everyone knew that the cost of the materials for the disc, artwork and jewel box were well under $2... so a $15 retail price, the argument went, was nothing short of outrageous. The easy extension of this thinking to a music download is that $10 for an album of 10-15 files is even more outrageous, since you've now eliminated even the $2 materials cost, to say nothing of shelving, inventory management, warehousing, middlemen and shrinkage.

What is conveniently lost here is the content itself... both the cost of making it, and what its actual value is for someone buying it. The cost of making it has its own problems in any discussion like this. Since technology has made the minimum cost of producing a decent recording within the reach of virtually all musicians, there's an assumption that the cost of producing music content now should then be fairly minimal. And it can be, if an artist makes the kind of music that will sound good enough when recorded at home, produced, mixed and mastered by themselves using basic equipment and software. But usually, if you want a great sounding record, you have to spend money on at least a couple of those items, and then it's easy to start spending money fast. In today's world, it's still not at all unreasonable to expect to need to spend, at the minimum, $5,000-$10,000 for a very good ensemble recording.

So I think it's relevant, whether I'm a content-owner or not, to weigh-in to this discussion the context of the real math involved. iTunes will pay the content provider 70 cents of each 99 per track that they sell. Emusic uses pro-rating, and when I talked to them a few years back it averaged close to 25 cents to the content provider. About 9 cents of that (either income model) goes to the songwriter(s). The rest is what goes to the content provider... which may be a licensor, or the actual content owner. Under a best case scenario (content provider is an artist who is both the owner of the master and the songwriting copyrights), the Emusic model brings in a total of $2.50 to $3.00 total per album download (as opposed to $7 from iTunes). If you had spent any money making that record, unfortunately the odds are stacked heavily against selling enough at those prices to recoup your costs. Spending more money on marketing only makes the odds longer.

But really, here's the bottom line of this debate: what is it worth to the consumer? At the end of the day, wearing my hat as a heavy music consumer, I'm pretty happy with the 99 cents per track / $9.99 per album price model for a good quality, non-DRM download. Fevers apparently is not. Ultimately, the market will likely decide. The jury is still out, as while the iTunes story is one of great success for the parent company Apple, it certainly has not yet provided enough of a turning point for the record industry, and conservative estimates are that five times more music is still downloaded for free (illegally) than is sold through music download stores. Would anyone else out there like to weigh in on this?

Next time: many experts seem to agree with Fevers that a subscription-based model is the future of music retail. But I see many problems with that model, probably too many to make it work as the dominant structure...

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