Hearing your music on the radio

It is something that we have been aware of for years but it is nice to hear someone else come out and say it. It takes money to get on the radio regardless of your sound. Now granite there are the 0.5% out there that are truly discovered but we are talking about the 99.5 percenters. In a December article on www.musicindustrynewswire.com, Scott G published an article titles "Hearing your music on the Radio". The below paragraphs are directly from his article.

"Unless you and your band are part of a well-funded promotional campaign, radio airplay is ofter out of your reach no matter how lovely your song and how well-produced your track. A lot of things have to occur before traditional radio will broadcast your song. There are "Gatekeepers" who zealously guard access... The main requirement for getting your music disseminated, however is MONEY. For example, if you want to make it to "the Charts," it takes lots of cash. As recently as 2006, Mike McVay, programming consultant to about 400 radio stations owned by media giant Clear Channel, was asked about the cost of getting a record on the charts. Depending on your genre, he said the amount is a hundred thousand dollars up to a quarter of a million."

The day and age of payola is supposed to be gone but still exists today with a new set of techniques using promotional considerations and middle men to handle the transfer of funds.

The Voices of Glory Perform at Madison Square Garden

This past week TMG recording artist The Voices of Glory performed in New York at Madison Square Garden during a New York Knicks game. The performance was also a tribute to Dr. Martin Luther King Jr.

The Director of Entertainment Marketing for the Knicks, Michelle Harris had this to say, "The Voices of Glory are an excellent group of young talent. With their beautiful harmonization, they were one of our top anthem performers this season. They are young professionals with strong work ethic and family values, and they were just lovely to work with. The Voices of Glory were the perfect act to help us celebrate the legacy of Dr. Martin Luther King Jr.".

Balance Between Physical and Digital Distribution

I was reading an interesting article ("The Paradox of the CD", by Glenn Peoples) on Billboard this morning regarding the decline in physical distribution opportunities because of the decline in sales over the last few years. It is interesting because one of the biggest misconceptions is that if we as a label can "just put the CD out there for sale it will sell a million copies". That simply is not the truth. I believed I wrote a previous blog about supply doesn't create demand in the music business and now I have some numbers to back it up.

CD sales have dropped 17.9% from 2008. Which I guess was predictable considering the previous two years of double digit losses.

Retail chains are scaling back or closing like gangbusters. For instance Virgin Mega stores closed its last six locations, Trans World closed shop on many stores, Circuit City is out of business, Independents have closed, National chains have closed locations or scaled back on space for CD sales and Starbucks has pulled back from the space just to name a few.

It is still important to have physical product, all I'm saying is that there is less and less spaces available for distribution. The declining numbers alone are case and point to the fact that supply doesn't create demand. Peoples goes on to state that Labels will best serve their clients by a balance between physical and digital worlds. He goes on to state that labels should embrace digital opportunities.

Tate Music Group fully understands the importance of physical product but more importantly the availability of digital distribution. TMG presents titles each quarter to our music buyers who have proved themselves in a digital sales environment. Our relationships allow our artists the best of both worlds. Again supply doesn't create demand and for a retail location with limited space, we really have to provide sales numbers before we can expect them to take a CD off of the shelf and replace it with another!

What's better a 9% or 50% Royalty Rate?

I was on Billboard.biz this morning and I noticed an article about royalty rates.

OK, I know it is Australia but still relevant to royalties on digital downloads.

The Country's Copyright Tribunal has increased the royalty rate to 9% which is paid by digital distributors to collection societies such as APRA and AMCOS.

That's correct 9% payoff to composers, music publishers and artists for digital download sales, on THIER music.

Its sure nice to own the rights to your music, so an artist who signs with Tate Music Group can receive our normal 50% royalty on digital sales like iTunes. Especially when digital sales are becoming the norm and physical distribution is going by the waste side. How many stores did Borders shut down last quarter? How many Sam Goodies or Music Traders are still around? Digital, Digital Digital!

Digital Distribution Allows Artists to Compete with the Majors

We all know physical distribution doesn't equate to sales for about 99.9% of the artists out there. Just because a CD is on the shelf somewhere doesn't mean someone will automatically buy it. Too many artists are consumed with physical distribution. Supply doesn't create demand in the music business, demand creates supply.

With more and more digital outlets becoming available for artists to solicit and sell their music through, the opportunity is there for anyone to succeed.

"Independents command a larger share of sales in the digital market than in the physical market with its limited shelf space, throwing into sharp relief the fact that when given the opportunity, independent repertoire successfully competes..." Charles Caldas, CEO MERLIN.

Artist signed to Tate Music Group are always given the opportunity for physical distribution. We have to test sales numbers in a digital atmosphere first. Every Quarter we approach our music buyers with titles that have created enough demand for physical distribution. Honestly if an artist does not have strong digital sales (album or downloads), they shouldn't be concerned with physical distribution. It is going to cost them way more than it is worth.

With the digital atmosphere the way it is today and growing stronger everyday, an artist is able to gain exposure and make a lot of money through digital distribution.

Successful Business Model

CNBC runs a show called Biography, which highlights business geniuses such as Bill Gates, McDonald's, Marriott... On my way home for the holidays I was searching the TV late at night trying to find something on and I came across Biography when it was featuring Richard Branson.

Branson created Virgin Records among many other businesses. He has a great inspirational story about overcoming naysayers and at the end of the day "just making it happen".

If you didn't know the full story on Branson I do suggest looking him up. He started out without so much as a high school education and built Virgin Group into one of the biggest and most successful business ventures in Britain.

Virgin was built as a discount store and label like many of the Virgin group brands. Branson said that they look at a business and determine ways to do it better and offer more.

I immediately thought of Tate Music Group during this story. TMG is not the norm but unlike the norm at this time we are profitable. TMG can offer our artists benefits that they can't likely find anywhere else. We strive in offering our artist top of the line options which we are growing every day. Just last week we rolled out the ability to participate in Nationwide TV commercials. 30 second spots for our artist, highlighting the album and their single.

When you look at TMG and compare us to other labels you can see that we've taken the most successful bits and pieces from other companies and instilled it into our business model. In doing so we have completely thrown away the practices that don't make money.

Bransons story is inspirational and I always like to hear success stories from the underdog. His story, much like anyone else's that has risen to the occasion highlights a never say die attitude.

We all could use a little bit more of that in our lives.

Competition Commission Clears the Proposed Merger of Ticketmaster and Live Nation in the UK

The Competition Commission has decided to clear the proposed merger of Ticketmaster and Live Nation in the U.K. The Commission decided that the merger of these two companies will not result in a "substantial" lessening of competition in the market.

A statement from both Ticketmaster and Live Nation indicated that they were optimistic there will be a successful outcome in the US.

The goal of this merger is to create a new kind of live entertainment business for the entire sector.

The push back from other ticket brokers and event promoters is that the merger will give Ticketmaster and Live Nation the power to increase ticket prices, or harm its competitors in different parts of the supply chain. The Commission disagrees and states that they would suffer significant short term losses in pursuit of very uncertain long term gains.

We will have to wait and see how this turns out.