Milestone for BMI: More than $1Billion in Music Royalties

September 9, 2017

By BEN SISARIO NYTimes.com 9/7/17

In 2015, the music licensing agency BMI reached $1 billion in revenue for the first time, and Michael O’Neill, the company’s chief executive, predicted that it would take another three years before the agency could, after expenses, pay $1 billion in royalties to its songwriters and music publishers.
BMI reached its goal one year early.
The organization, whose hundreds of thousands of members include stars like Taylor Swift, Ed Sheeran and Sting, announced on Thursday that it had $1.13 billion in revenue and distributed $1.02 billion in royalties during its most recent fiscal year, which ended in June. BMI and other performing rights organizations, like its rival Ascap, collect money whenever songs are played on the radio, streamed online or piped into a restaurant.

“Revenue is a great number,” Mr. O’Neill said in an interview, “but distributions are actually what goes into a songwriter’s pocket.”

Returns at BMI and Ascap have been steadily rising over the last decade or so, as technology and patterns of music consumption have changed. (Ascap won bragging rights in 2015 by hitting $1 billion in revenue a few months before BMI did.)

As record sales have fallen, so have the “mechanical” royalties associated with that format. At the same time, the performing rights licensed by BMI, Ascap and a handful of others have grown, helped by the rise of music streaming services and by deals with new types of businesses like Netflix and Hulu.

Still, the value of the music publishing business, the side of the industry that deals with the copyrights for songwriting and composition, keeps rising. According to the National Music Publishers’ Association, the United States publishing business generated $2.65 billion last year.

BMI’s collections in its most recent fiscal year were up almost 7 percent from the year before, and its royalty distributions were up 10 percent. Its media licensing category, which includes radio, broadcast television and cable, generated $524 million in revenue, an annual gain of $32 million.

But those types of businesses now make up less of BMI’s overall pie than they used to. In 2010, for example, media licenses accounted for 82 percent of BMI’s domestic revenue, and are now 63 percent, according to BMI reports.

The biggest gains in recent years have come in so-called general licensing — which includes restaurants, retail stores and doctors’ offices — and, especially, from online services. In 2010, BMI collected $20 million from what it then called “new media,” accounting for just 3 percent of its domestic revenue. In its most recent year, that category, now called digital, took in $163 million, nearly 20 percent of the total.

Over the last year, BMI, whose full name is Broadcast Music Inc., processed nearly 1.4 trillion performances, up 40 percent from the year before, the organization said. Of that total, 1.35 trillion were digital.

For both BMI and Ascap, their recent gains have come under a cloud of uncertainty, as major publishers have threatened to withdraw their catalogs and the entire process of collective licensing has come under scrutiny by the federal government.

Both BMI and Ascap are governed by federal regulatory agreements that date to the 1940s, and last year, the Justice Department ordered the two groups to make changes to their licensing procedures. BMI challenged that interpretation in court and won, but the government appealed the case in May.

Mr. O’Neill said that no matter what the outcome of the appeal, BMI would continue to work to make money for its members.

“Our goal is to make sure that songwriting can continue as a profession,” he said, “and not simply a hobby.”YTimes.com 9/7/1

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How a rock band’s lawsuit could upend record deals everywhere

August 28, 2017

Eriq Gardner Hollywoodreporter.com 8/23/17

A coming trial between Avenged Sevenfold and Warner Bros. Records may dissuade or embolden hot artists looking to escape their contracts.

What’s a record label actually good for? That is a question implied in a lawsuit between Warner Bros. Records and Avenged Sevenfold, a heavy metal band from Huntington Beach, California, that is scheduled to go to trial this year and has the potential to upend the music industry.

The dispute dates back to 2015, when the act notified its label that it was terminating the contract it signed in 2004, citing the “seven-year rule,” which bars personal service contracts lasting longer than seven years. The law has its roots in a pro-labor statute put on the books after the Civil War to prevent long-term contracts from becoming the means for involuntary servitude. The modern version of the rule was famously tested in entertainment in 1944, when Olivia de Havilland used the law to break her contract with Warner Bros after the studio repeatedly suspended her for turning down roles. An appeals court decision helped bring an end to Hollywood’s old studio system.

But the seven-year rule has not decimated the record business because the major labels successfully lobbied in the 1980s for an important change after Olivia Newton-John won a “seven-year” battle with MCA Records. Music contracts are generally denominated in deliverables (in Avenged Sevenfold’s case, they agreed to record five albums and a couple of live ones for Warners), not length of term. The recording industry successfully convinced California lawmakers that labels invest so much up front in their artists, they should be able to recover the “lost profits” of uncompleted albums from acts who don’t fulfill their contractual commitments.

Although artists like Courtney Love and bands like Thirty Seconds to Mars have invoked the seven-year rule in disputes with their labels, those matters settled before they reached trial.

Avenged Sevenfold, which won best new artist at the MTV Music Awards in 2006 and has put out four well-received albums with Warners, could in December become the first musical act to test the law before a jury. The stakes are huge for both the band and the music industry: If it loses, Avenged Sevenfold could face a verdict between $5 million and $10 million. If it wins, the outcome could embolden other acts with contracts older than seven years — which on Warners’ roster includes major recording artists Red Hot Chili Peppers and Green Day ­­­— to exit their current deals.

“We’ve realized this battle is bigger than just us,” says Avenged Sevenfold singer Matt Sanders (known professionally as M. Shadow). “We’re fighting so that all musical artists have the same rights everyone else has. It’s not like we wanted to be here, but we are down for the fight.”

Avenged Sevenfold intends to steer the label’s drive for lost profits around by asking what a record label does for its artists in this day and age. “The trial will include a referendum on how ineffective WBR is in promoting rock records,” says the band’s attorney, Howard King.

In the old days, labels performed three critical tasks: The first was talent scouting and overseeing artistic development. Second was promotion. Third was distribution. Digital networks and streaming services such as Spotify and Apple Music have now democratized the emergence of new acts and enabled music to reach consumers without too much cost. Record labels have in some respect enjoyed the lesser expenses of this era and have also cut A&R staff.

Heavily reliant on pop stars and older legacy artists, labels are now largely about that second task of promotion. But some don’t believe labels are especially wonderful in that regard either.

Bob Lefsetz, a music industry analyst who will be testifying at trial as an expert on behalf of the band, says that some record labels still enjoy relationships that serve them well in the realms of pop and hip-hop. But Lefsetz adds, “If you are not in one of those two niches, does that behoove you to be with a label? You are giving up a big percentage of revenue and tying yourself. The only reason you’d do that is if they can promote you. And if you look at their relative reach, it’s de minimis.”

King is arguing that there would not have been much (if any) profit for Warners to lose on a fifth Avenged Sevenfold album. “We believe a jury will conclude they can’t prove any damages,” he says. He says the band’s most recent album, The Stage, which it put out in October 2016 under Warners’ rival Capitol, “has been a commercial disappointment. WBR would have lost money had that been delivered to them for marketing.”

According to several insiders in the Warner Bros. camp, none of whom wanted to comment publicly on a pending legal matter, the feeling is that the case wasn’t something the label could have avoided, and instead, provides an opportunity. They blanch at the notion that the lawsuit amounts a punitive act over a band whose very moniker evokes vengeance, but acknowledge it does provide an opportunity to dissuade any other acts from attempting to sit out the clock on their deals or use the seven-year rule as leverage for a renegotiation.

On Aug. 11, the judge allowed Warners to assert claims from its worldwide affiliates in a decision that could double or triple the potential liability that Avenged Sevenfold is facing. And the label is being allowed to seek its attorney fees — already amounting to more than $1.5 million in another sign of just how seriously the record label is treating this fight. At trial, expect a rare look at industry financials and testimony from key executives. The label will take the straightforward approach of using past commercial success to infer future profits. But when Sanders and other Avenged Sevenfold members appear before a jury to challenge their former label’s worthiness, an entire industry may regard its mortality. As Lefsetz notes, there’s significant precedent at stake: “A lot of this stuff has never been litigated.”

woodreporter.com 8/23/17

Lighting The Way: Red Light Management Coran Capshaw speaks

August 10, 2017

by Mark Sutherland Musicweek.com 8/8/17

Coran Capshaw is the founder of Red Light Management – and the manager of Dave Matthews Band, Lady Antebellum and Phish, who recently played a record-breaking 13-night residency at New York’s Madison Square Garden.

He also follows the likes of Sir Lucian Grainge and Irving Azoff in winning the 2017 City Of Hope Spirit Of Life Award. In an exclusive Q&A, he talks about the business’ biggest opportunities, most testing challenges – and the future of artist management…

How have you grown the UK business?

Well, one thing we do at Red Light – and it’s happening in the UK – is, we’re into developing talent. We’re putting resources against it, and we’re trying to grow artists.

When an established artist becomes available or is looking to make a change, obviously we’re interested in those opportunities, but we’re also interested – for the sake of our company – in developing talent, and that’s working well over there.

What plans do you have for the affiliated businesses in the UK?

We’re promoters over here [in the US] – we haven’t done any promoting over there. But here, we are in the festival business and we do some regional and at times national promoting.

One thing we would like to do is expand the ancillary business opportunities over there, so we are certainly looking at and open to doing more things.

Do those businesses increase the options you can offer to artists?

It goes back to that knowledge. We see a lot of different things and we see a lot of different perspectives. If we’re in business with a label, we want to be good partners to them because we appreciate what they’re doing and we put out records ourselves.

If we’re in a situation where, for whatever reason, we want to put out the record, we know how to do it. So there’s a lot of different perspectives here: Red Light was created with people coming out of the label world, the
promoter world, the sponsorship world, the touring world – all different aspects of the business comprised by the people who are working here. It’s all helpful and all serves a common purpose.

What’s the biggest change you’ve seen in the 25-odd years you’ve been a manager?

We’ve gone through the challenges [around] not selling bodies of work of 10–12 songs the way that we used to… That’s the bad news.

The good news is, the access to and interest in music is higher than in any of our lifetimes. As the tide starts to turn in the recorded music area, we’ve got healthy touring, we’re talking about the global business… This is an exciting time to be here.

And so I don’t really think much about the challenges, I think about the opportunities. That’s where our focus is.

The one thing that we’ve all got to figure out how to crack the code on, is that live music is probably the most inefficiently priced industry in the world.

We all set out with good intentions of being friendly and fair to our fans with pricing, but we’ve got third parties getting their hands on the tickets.

So I think it’s going to cause a shift in primary pricing. It is about creating programmes so we can start getting the artist and the fans more in that equation rather than the third parties.

That’s a challenge and an opportunity at the same time, when you look at the income and revenue that’s headed out the door in the wrong hands.

Where do you see the future of Red Light?

We’re on a very good path now to continue doing what we do. If we wind up in more ancillary businesses that are helpful to our acts, that would be a goal.

The manager and their teams are the most important part of the artist world and it’ll become more and more important in the future.

We have the primary role, we have great label partners, great touring partners, festivalpartners, brand partners but the manager is the hub of all that.

Our work is harder; we have to do more and more with the changes out there, but our role is going to grow and the company’s going to continue what it has been doing in a balanced way.

There’s going to be more and more creative ways of bringing attention to music and a career and that leads to a wide array of opportunity.

These are exciting times and we should all be grateful that we get to do what we do.

The Pioneers of Audio Engineering: Tom Dowd

July 28, 2017

DavidSilverstein Sonicscoop.com 7/27/17

If we had an audio Mt. Rushmore, these are the faces that would be on it. The first engineer in this series is Tom Dowd, the “Father of the Atlantic Sound.”

Who is Tom Dowd?

If you Google “incredibly interesting life”, you’ll see a picture of Tom Dowd.
Okay, maybe not. But you should.

Dowd performed nuclear research for the infamous Manhattan Project during World War II. He also created the first ever 8-channel console with sliding faders in order to record some of the biggest artist of all time: Ray Charles, Allman Brothers, Eric Clapton, Aretha Franklin, Otis Redding, John Coltrane, Dizzy Gillespie, Thelonius Monk, Cream, Rod Stewart, Lynyrd Skynyrd, the list goes on and on… and on… and… on.

As the main recording engineer for the legendary Atlantic Records for 25 years, his technical excellence and ability to think outside the box made him a true pioneer in the field.

He was an engineer during the golden years of music for several genres, working through multiple eras and recording all styles. Somehow, he was able to not only stay relevant through all of them, but remain in high demand at the top of the industry throughout.

To put the gravity of Dowd’s legacy in context, the first hit song he recorded was Eileen Barton’s, “If I Knew You Were Comin’ I’d’ve Baked a Cake”, released in 1950. One of the very last albums he worked on was Joe Bonamassa’s New Day Yesterday, released in 2000. That’s a full 50 years of recording and producing major releases.

Not only did he continue to record for over half a century, but he was at the forefront of the industry in adapting to changing technology. He was there for the change from hand-me-down radio gear and a mono disc cutter, to stereo recording systems, to 24 track tape machines, all the way to digital recording with practically unlimited tracks and digital effects.

Early Life

Thomas John Dowd was born in 1925 in New York City. His mother was a opera singer and his father a stage manager, in charge of theater productions. He played piano and violin from a young age and eventually learned tuba and string bass. Tom excelled at math and science and, after graduating from Stuyvesant High School in Manhattan at 16, got a job working at the Office of Scientific Research and Development at Columbia University.

When he turned 18, he was drafted into the military and sent off to basic training. After that training, he was immediately sent back to Columbia University. His orders read, “United States Army Corp of Engineers: Manhattan District,” which later became known as “the Manhattan Project”.

That’s right: The man responsible for recording “Layla”, “Respect” and “Stand by Me” also helped develop the atomic bomb. During his stint on the Manhattan Project, Dowd operated a “cyclotron” particle accelerator, performed density tests of various elements, and recorded statistics, as part of the “Neutron Beam Spectography” division. He didn’t find out until 1945 that his work during this time was used to develop the bomb that ultimately ended the second World War.

After the war, Dowd finished his service and wanted to complete his degree in nuclear physics at Columbia University, since he was only short a few credits. He asked the school if they would acknowledge his work during the war and give him the credits he needed to graduate. Unfortunately, because his work on the Manhattan Project was top secret, Columbia refused to honor any of it. Now, in order to graduate, Dowd would have to return to Columbia and learn the physics that predated what he used in his time in the military.

Unbeknownst to them, Columbia’s decision changed the course of recorded music forever. Dowd decided to forgo finishing school in favor of a summer job at a demo studio, owned by the Fisher publishing company.

The Atlantic Years

In the late 1940s, Ahmet Ertegun, the head and founder of Atlantic Records, was recording at Apex a recording studio in New York. He had requested to work with the best engineer at the time, who he was told was a “German Professor.”

According to Ertegun, this professor was very strict, and would not let the engineers turn up the bass or drums “too loud”. At the time, bass and drums weren’t often heard prominently on records. This was due in part to mic techniques, but also because of issues cutting bass directly to disc (the needle could physically skip if you recorded low end too hot).

The next time Ertegun showed up to record, the German professor was not available, so in walked a young Tommy Dowd who had been assigned to the session. At the time, Dowd was a young kid who raised a few skeptical eyebrows, but wasn’t afraid of breaking rules that his older, conventional contemporaries would never think of—like using multiple microphones on sources and tracking bass and drums so listeners were actually able to hear them. After that session, Ahmet Ertegun decided he loved Dowd so much that he made sure he recorded just about every Atlantic record.

Dowd was eventually put in charge of building the Atlantic Records studio, which was located on West 56th Street in Manhattan. In the beginning, the studio was an office space during the day and at night, the desks would be pushed against the walls and groups would gather around microphones in the inner office. The outer office would be used as the control room, where Tom would record with a small mixer and tape recorder. Even the stairwell would be utilized as a reverb chamber.

Tom was a big fan of Les Paul, and after listening to Les Paul’s records featuring 5 guitars and 3 vocal overdubs, he couldn’t figure out how Les was doing it. Eventually, Dowd learned the secret: Les had his own 8-track recorder. In 1958, Tom Dowd, convinced Jerry Wexler (a partner and producer at Atlantic) to purchase the second Ampex 8-track tape recorder ever manufactured. This put them technologically ahead of other studios for many years.

To truly understand just how far advanced this was, the Beatles at Abbey Road were still using pairs of 4 track machines nearly a decade later while recording Sgt. Peppers Lonely Hearts Club Band.

(There’s a fun reenactment in the 2004 movie, Ray, in which Dowd introduces Ray Charles to 8-track recording in the middle of a session, who then tells the backup singers to leave so he can record all their parts himself.)

Since Atlantic had a new 8-track machine, they also needed to build a console to accommodate these extra 4 tracks. Tom immediately went to work on a new console. He had a longstanding issue with the hand-me-down radio equipment they had been using, and their large rotary knobs. Being a piano player, he liked the idea of having control over multiple channels at once. He sourced some slide wires, and decided to use those instead. This was the first time sliding faders were ever used on a recording console.

Dowd recorded all styles and genres, ranging from artists on Atlantic’s jazz roster, like John Coltrane and Charles Mingus, to pop and rhythm & blues legends like Ray Charles and Dusty Springfield. He eventually went on to record rock bands like Cream, and is credited with shaping the sound of Southern rock, as longtime producer for the Allman Brothers Band and Lynyrd Skynyrd.

Later Life

In the late 1960s, Dowd left Atlantic Records to work as a freelance producer and, in 1967, moved to Miami where he worked primarily at Criteria Sound Studios. He made records right up until his death in 2002. Later on, he was posthumously inducted into the Rock and Roll Hall of Fame, where his daughter, Dana Dowd, accepted his award in his honor.

Tom Dowd was there when Ray Charles was recording “I’ve Got a Woman”, when Ben E. King recorded “Stand by Me,” and when Duane Allman played his famous slide solo at the end of Eric Clapton’s “Layla.”

Think about that for a moment: He was right there, in the studio, arranging microphones and hitting the record button, when all of these songs were put to tape. Dowd spent a life actively involved in creating songs that are completely embedded in the minds of countless millions, and that make up the very fabric of our collective culture and history. We hear these songs on the radio, in movies, on television shows. We sing these songs in the shower.

Tom Dowd was right there when each of these iconic performances took life, and played an active role in those productions turning out quite the way they did. It’s a legacy any of us could aspire to.

Maestros of the Concert Merchandise Movement

July 27, 2017

By VALERIYA SAFRONOVA NYTimes.com 7/25/17

Merchandise for the Weeknd is displayed in the showroom at the offices of Bravado, the division at Universal Music Group that works with entertainers to design, manufacture and distribute branded products.

One Friday morning in early May, eight high-end boutiques in the United States and Canada were flooded with desperate fans jostling to claim their piece of the Weeknd, snapping up bombers, hats, shirts and sweatpants celebrating his album “Starboy.” Two weeks later, at exactly 5 p.m., at more than 200 stores, Urban Outfitters released merchandise decorated with Lady Gaga’s face and the title of her album “Joanne” to barely controlled consumer delight.

Welcome to the world of elevated concert merch: special collections linked to specific cultural events, limited in availability, and one of the newest and fastest-growing subsectors in the fashion world. From the first half of 2014 to the first half of 2017, the amount of tour-related products sold online increased by 720 percent, according to Edited, a company that tracks analytics at more than 90,000 brands and retailers.

Driving the phenomenon is Bravado, the division at Universal Music Group that works with entertainers such as Justin Bieber, Desiigner, Selena Gomez, Lady Gaga and the Weeknd to design, manufacture and distribute branded products; it is led by Mat Vlasic, an energetic New Yorker (and Riverdale Country School alum) who favors a black-on-black uniform and meditation for handling stress.

Not far behind is the Thread Shop, Sony Music Entertainment’s merchandising arm, which collaborates with artists like Nas, Common, A Tribe Called Quest, ASAP Rocky, DJ Khaled and Fifth Harmony, and which is run by Frances Wong, also a New Yorker (but raised in New Jersey) who calls the Thread Shop’s savvy customers “kids” and worked for Rocawear, the clothing label started in 1999 by Jay-Z and Damon Dash.

In a twist of corporate musical chairs, Bravado’s Mr. Vlasic actually founded the Thread Shop during a 12-year stint at Sony, where he began in the finance department, while Ms. Wong worked at Bravado until 2015.

Now, the two are engaged in something of an arms race to own the increasingly lucrative cross-disciplinary fashion territory they have defined.

Founded in 1997 by Barry and Keith Drinkwater, and sold to Universal about a decade later, Bravado operates in 40 countries and works with retailers like Zara, H&M, Uniqlo, Selfridges and Barneys New York. Last year, the revenue for the merchandising arm of Universal, of which Bravado is a major part, was 313 million euros, or about $365 million, an increase of about 13 percent from the year before. Besides handling merchandising for dozens of living artists, Bravado also works with the estates of former powerhouses, including Prince, the Beatles and Tupac Shakur.

The Thread Shop is a much younger operation. It began in 2009 as a straightforward T-shirt business to support touring artists, and eventually grew to provide more exclusive, higher-priced pieces and capsule collections. The company now works with some of the same retailers as Bravado, including Urban Outfitters, Pacsun and Kohl’s, and, like Bravado, operates globally.

Sony would not provide revenue figures for the Thread Shop. But Richard Story, the president of Commercial Music Group, which handles licensing, estate management, television and film contracts and more for Sony, acknowledged that while currently a minor contributor to the parent company’s balance sheet: “There’s no question that when we’re in our strategic planning conversations, we look at these types of businesses and think, ‘Can they be very robust multimillion-dollar revenue operations?’ We firmly believe they can be.”

On a recent afternoon at Sony’s offices on Madison Square Park in Manhattan, Ms. Wong considered Bravado’s position in the field. “They are the leader of our arena,” Ms. Wong said. But, she added: “I start from a trend standpoint because I think that’s why people will come to us. How do you do a concert tee and take it to the next level? Do you crop it, do you cut it, do you put safety pins in it?” Ms. Wong, who previously worked at Bloomingdale’s, Calvin Klein and Benetton, was wearing an ASAP Ferg shirt that she had cut a V-shaped neckline into herself.

When first releasing an artist’s products, both Bravado and the Thread Shop will often do so through pop-up shops. “We’ll identify the ground zero retailers that create demand, create urgency,” said Frank Bartolotta, Bravado’s senior vice president for national sales. “That creates a crazy amount of energy. Because it’s like, ‘If I didn’t get it during that three-day cycle, I need to figure out when I’m going to get it.’ Then we go to a larger retail partner.”

Thus in early May, “Starboy” merchandise was sold for three days only at boutiques in eight cities across the United States, including Patron of the New in New York and FourTwoFour on Fairfax in Los Angeles, and also online for limited periods. After that, Bravado went to PacSun for a larger rollout. “If there’s not an experience tied into this, it becomes stale, it becomes mute,” Mr. Bartolotta said. “When we create these moments that live there for literally 72 hours, there’s an alertness, and that fan is rabid.”

The key is to ensure that pop-ups offer certain exclusive items. “The kid that goes to New York wants the New York piece,” Mr. Bartolotta said. “The kid who goes to L.A. wants the L.A. piece. And then there’s the main collection. So if you weren’t in L.A., you can then go, weeks later, to PacSun to get that extended collection.”

Ms. Wong takes it a step further and offers a different collection at each distribution point. “I don’t want fans to see the same thing over and over again,” she said. “If you’re a fan, you’re going to be shopping online; if we drop something at Urban Outfitters, you’ll go to Urban; and if you’re at the tour, you’ll buy a T-shirt, too.”

Or, if you know your way around the resale market, you might go to eBay, Grailed or similar online marketplaces for the items you missed. After all, not everyone lives in the city where a store pops up or a tour stops. “The reselling culture is now crossing over into the world of music and merchandise,” said Lawrence Schlossman, the brand director of Grailed. “With social media, when you see a line outside of a pop-up or you see people making money or getting a lot of likes and looking cool, that creates a hype cycle that feeds itself.”

Still, while the pop-up shops and exclusive items are a key for building attention, the moneymakers are the items that many consumers can afford and easily access. “You always need premium to sell the mass,” Ms. Wong said. “I can’t afford a Gucci bag at $5,000, but I’ll buy a wallet for $700 and still be part of that lifestyle.” And in fact, according to Edited, the artists who drive the most e-commerce traffic are Run-DMC, the Red Hot Chili Peppers and the Ramones (all Bravado clients). Not exactly of the moment.

“There’s a huge middle market in this trend,” said Katie Smith, senior analyst at Edited. “It’s not just buzzy, like, ‘Check out the latest Pablo tee.’” (Pablo being from Kanye West’s album “The Life of Pablo.”) “For retail, there’s still a big opportunity for the older, more known artists. That stuff doesn’t sell as fast, but it performs very well.”

Laird Adamson, the head of international at Bravado, said: “There’s an evergreen business that happens at Kohl’s that’s in constant replenishment. It’s the stuff that lives there all day long, drives volume for us, doesn’t make a lot of noise. And then there’s us identifying with key retailers where every other month there’s a different event happening. At Urban Outfitters, there’s a Gaga event for one month. Then there’s a Bieber event for two months and then that goes away.”

In reality, the products attached to one artist are not vastly different from those of any other: The design might vary — especially if you bring someone on board like Jerry Lorenzo, the designer of Fear of God, who collaborated with Justin Bieber, or Wes Lang, an artist who worked with Mr. West — but this is not high fashion, or even trickle-down runway style. The sense of diversification is manufactured by buzz built around the artist, and it is key to perpetuating consumers’ desire for the products.

“The challenge I have on a daily basis is, ‘How do we drive traffic to these stores?’” Mr. Bartolotta said. “You look at malls and you see traffic is down. We’re bringing an experience that’s being driven by the artists. When you do that, these retailers’ appetites are stimulated. If we don’t do this, we’ll die like a lot of malls are dying.”

Like all successful brand builders, Mr. Vlasic and Ms. Wong know their references.

Ms. Wong calls out “Armani and Valentino and Prada” because “you can look at it right away and know whose hand it is. And the same goes with artists. These kids are too smart. If it’s not authentic, they don’t want it.”

And for Mr. Vlasic, “Star Wars” and Disney provide inspiration.

“Do consumers tire of it?” he said. “Sure, but keep reinventing it, keep rethinking how to do it. ‘Star Wars’ products are everywhere. Your product can be in Target, in Coach, in Uniqlo. You just have to be smart about it

Why my guitar gently weeps The slow, secret death of the six-string electric. And why you should care.

June 27, 2017

By Geoff Edgers WashingtonPost.com 6/22/17

The convention couldn’t sound less rock-and-roll — the National Association of Music Merchants Show. But when the doors open at the Anaheim Convention Center, people stream in to scour rows of Fenders, Les Pauls and the oddball, custom-built creations such as the 5-foot-4-inch mermaid guitar crafted of 15 kinds of wood.

Standing in the center of the biggest, six-string candy store in the United States, you can almost believe all is well within the guitar world.

Except if, like George Gruhn, you know better. The 71-year-old Nashville dealer has sold guitars to Eric Clapton, Neil Young, Paul McCartney and Taylor Swift. Walking through NAMM with Gruhn is like shadowing Bill Belichick at the NFL Scouting Combine. There is great love for the product and great skepticism. What others might see as a boom — the seemingly endless line of manufacturers showcasing instruments — Gruhn sees as two trains on a collision course.

“There are more makers now than ever before in the history of the instrument, but the market is not growing,” Gruhn says in a voice that flutters between a groan and a grumble. “I’m not all doomsday, but this — this is not sustainable.
The numbers back him up. In the past decade, electric guitar sales have plummeted, from about 1.5 million sold annually to just over 1 million. The two biggest companies, Gibson and Fender, are in debt, and a third, PRS Guitars, had to cut staff and expand production of cheaper guitars. In April, Moody’s downgraded Guitar Center, the largest chain retailer, as it faces $1.6 billion in debt. And at Sweetwater.com, the online retailer, a brand-new, interest-free Fender can be had for as little as $8 a month.

What worries Gruhn is not simply that profits are down. That happens in business. He’s concerned by the “why” behind the sales decline. When he opened his store 46 years ago, everyone wanted to be a guitar god, inspired by the men who roamed the concert stage, including Clapton, Jeff Beck, Jimi Hendrix, Carlos Santana and Jimmy Page. Now those boomers are retiring, downsizing and adjusting to fixed incomes. They’re looking to shed, not add to, their collections, and the younger generation isn’t stepping in to replace them.

Gruhn knows why.

“What we need is guitar heroes,” he says.

He is asked about Clapton, who himself recently downsized his collection. Gruhn sold 29 of his guitars.

“Eric Clapton is my age,” he says.

How about Creed’s Mark Tremonti, Joe Bonamassa, John Mayer? He shakes his head.

“John Mayer?” he asks. “You don’t see a bunch of kids emulating John Mayer and listening to him and wanting to pick up a guitar because of him.”

Guitar heroes. They arrived with the first wave of rock-and-roll. Chuck Berry duckwalking across the big screen. Scotty Moore’s reverb-soaked Gibson on Elvis’s Sun records. Link Wray, with his biker cool, blasting through “Rumble” in 1958.
Living Colour’s Vernon Reid and The Post’s Geoff Edgers deconstruct some of rock’s most iconic guitar riffs, from “Cult of Personality” to “Back in Black.” (Erin Patrick O’Connor/The Washington Post)

That instrumental wasn’t a technical feat. It required just four chords. But four chords were enough for Jimmy Page.

“That was something that had so much profound attitude to it,” Page told Jack White and the Edge in the 2009 documentary “It Might Get Loud.”

The ’60s brought a wave of white blues — Clapton, Jeff Beck, Keith Richards — as well as the theatrics of the guitar-smashing Pete Townshend and the sonic revolutionary Hendrix.

McCartney saw Hendrix play at the Bag O’Nails club in London in 1967. He thinks back on those days fondly and, in his sets today, picks up a left-handed Les Paul to jam through Hendrix’s “Foxy Lady.”

“The electric guitar was new and fascinatingly exciting in a period before Jimi and immediately after,” the former Beatle says wistfully in a recent interview. “So you got loads of great players emulating guys like B.B. King and Buddy Guy, and you had a few generations there.”

He pauses.

“Now, it’s more electronic music and kids listen differently,” McCartney says. “They don’t have guitar heroes like you and I did.”

[Meet the critic who panned Sgt. Pepper]

Nirvana was huge when the Black Keys’ Dan Auerbach, 38, was growing up.

“And everybody wanted a guitar,” he says. “This is not surprising. It has to do with what’s in the Top 20.”

Living Colour’s Vernon Reid agrees but also speaks to a larger shift. He remembers being inspired when he heard Santana on the radio. “There was a culture of guitar playing, and music was central,” adds Reid, 58. “A record would come out and you would hear about that record, and you would make the journey. There was a certain investment in time and resourc

Lita Ford, also 58, remembers curling up on the couch one night in 1977 to watch Cheap Trick on “Don Kirshner’s Rock Concert.” She was 19 and her band, the Runaways, had played gigs with them.

“It was just a different world,” Ford says. “There was ‘Don Kirshner’s Rock Concert,’ Ed Sullivan, Dick Clark, and they would have one band on and you would wait all week to see who that band was going to be. And you could talk about it all week long with your friends — ‘Saturday night, Deep Purple’s going to be on, what are they going to play?’ — and then everybody’s around the TV like you’re watching a football game.”

By the ’80s, when Ford went solo and cracked the Top 40, she became one of the few female guitar heroes on a playlist packed with men, including Stevie Ray Vaughan, Joe Satriani and Eddie Van Halen.

Guitar culture was pervasive, whether in movie houses (“Karate Kid” Ralph Macchio outdueling Steve Vai in the 1986 movie “Crossroads”; Michael J. Fox playing a blistering solo in “Back to the Future” and co-starring with Joan Jett in 1987’s rock-band drama “Light of Day”) or on MTV and the older, concert films featuring the Who and Led Zeppelin on seemingly endless repeats.

But there were already hints of the change to come, of the evolutions in music technology that would eventually compete with the guitar. In 1979, Tascam’s Portastudio 144 arrived on the market, allowing anybody with a microphone and a patch cord to record with multiple tracks. (Bruce Springsteen used a Portastudio for 1982’s “Nebraska.”) In 1981, Oberheim introduced the DMX drum machine, revolutionizing hip-hop.

So instead of Hendrix or Santana, Linkin Park’s Brad Delson drew his inspiration from Run-DMC’s “Raising Hell,” the crossover smash released in 1986. Delson, whose band recently landed atop the charts with an album notably light on guitar, doesn’t look at the leap from ax men to DJs as a bad thing.

“Music is music,” he says. “These guys are all musical heroes, whatever cool instrument they play. And today, they’re gravitating toward programming beats on an Ableton. I don’t think that’s any less creative as playing bass. I’m open to the evolution as it unfolds. Musical genius is musical genius. It just takes different forms.”

An industry responds

Tell that to Guitar Center, now $1.6 billion in debt and so fearful of publicity that a spokeswoman would only make an executive available for an interview on one condition: “He cannot discuss financials or politics under any circumstances.” (No thanks.)

Richard Ash, the chief executive of Sam Ash, the largest chain of family-owned music stores in the country, isn’t afraid to state the obvious.

“Our customers are getting older, and they’re going to be gone soon,” he says.

Over the past three years, Gibson’s annual revenue has fallen from $2.1 billion to $1.7 billion, according to data gathered by Music Trades magazine. The company’s 2014 purchase of Philips’s audio division for $135 million led to debt — how much, the company won’t say — and a Moody’s downgrading last year. Fender, which had to abandon a public offering in 2012, has fallen from $675 million in revenue to $545 million. It has cut its debt in recent years, but it remains at $100 million.

[How much did this guitar story cost me? $2, 376.99.]

And starting in 2010, the industry witnessed a milestone that would have been unthinkable during the hair-metal era: Acoustic models began to outsell electric.

Still, the leaders of Gibson, Fender and PRS say they have not given up.

“The death of the guitar, to paraphrase Mark Twain, is greatly exaggerated,” says Fender’s chief executive, Andy Mooney.

He says that the company has a strategy designed to reach millennials. The key, Mooney says, is to get more beginners to stick with an instrument they often abandon within a year. To that end, in July the company will launch a subscription-based service it says will change the way new guitarists learn to play through a series of online tools.

Paul Reed Smith, the Maryland-based guitar designer, says the industry is just now recovering from the recession that struck in 2009. He points to PRS’s sustained revenue — the company says they’re between $42 million and $45 million a year — and an increased demand for guitars.

“This is a very complicated mix of economy versus market, demand versus what products are they putting out, versus are their products as good as they used to be, versus what’s going on with the Internet, versus how are the big-box stores dealing with what’s going on,” Smith says. “But I’ll tell you this: You put a magic guitar in a case and ship it to a dealer, it will sell.”

Then there’s Henry Juszkiewicz, the biggest and most controversial of the music instrument moguls. When he and a partner bought Gibson in 1986, for just $5 million, the onetime giant was dying.

[Behind the scenes: how we got paid to set a guitar on fire]

“It was a failed company that had an iconic name, but it really was on its last legs,” Ash says. “[Juszkiewicz] completely revived the Gibson line.”

Juszkiewicz, 64, is known for being temperamental, ultracompetitive and difficult to work for. A former Gibson staffer recalls a company retreat in Las Vegas punctuated by a trip to a shooting range, where executives shot up a Fender Stratocaster. In recent years, Juszkiewicz has made two major pushes, both seemingly aimed at expanding a company when a product itself — the guitar — has shown a limited ability to grow its market.

In 2014, he acquired Philips’s audio division to add headphones, speakers and digital recorders to Gibson’s brand. The idea, Juszkiewicz says, is to recast Gibson from a guitar company to a consumer electronics company.

There’s also the line of self-tuning “robot” guitars that Gibson spent more than a decade and millions of dollars developing. In 2015, Juszkiewicz made the feature standard on most new guitars. Sales dropped so dramatically, as players and collectors questioned the added cost and value, that Gibson told dealers to slash prices. The company then abandoned making self-tuners a standard feature. You can still buy them — they call them “G Force” — but they’re now simply an add-on option.

Journey’s Neal Schon says he battled with Juszkiewicz when he served as a consultant to Gibson.

“I was trying to help Henry and shoo him away from areas that he was spending a whole lot of money in,” Schon says. “All this electronical, robot crap. I told him, point blank, ‘What you’re doing, Roland and other companies are light-years in front of you, you’ve got this whole building you’ve designated to be working on this synth guitar. I’ve played it. And it just doesn’t work.’ And he refused to believe that.”

Juszkiewicz says that one day, the self-tuning guitars will be recognized as a great innovation, comparing them with the advent of the television remote control. He also believes in the Philips purchase. Eventually, he says, the acquisition will be recognized as the right decision.

“Everything we do is about music,” Juszkiewicz says. “It doesn’t matter whether it’s the making of music with instruments or the listening of music with a player. To me, we’re a music company. That’s what I want to be. And I want to be number one. And, you know, nobody else seems to be applying for the job right now.”

The search for inspiration

If there is a singular question in the guitar industry, it’s no different from what drives Apple. How do you get the product into a teenager’s hands? And once it’s there, how do you get them to fall in love with it?

Fender’s trying through lessons and a slew of online tools (Fender Tune, Fender Tone, Fender Riffstation). The Music Experience, a Florida-based company, has recruited PRS, Fender, Gibson and other companies to set up tents at festivals for people to try out guitars. There is also School of Rock, which has almost 200 branches across the country.

On a Friday night in Watertown, Mass., practice is just getting started.

Joe Pessia runs the board and coaches the band. He’s 47, a guitarist who once played in a band with Extreme’s Nuno Bettencourt and has worked at School of Rock since 2008.

Watching practice, it’s easy to understand why.

With Pessia presiding, the school’s showcase group blasts through three songs released decades before any of them were born.

The Cars’ “Bye Bye Love” blends quirky, new-wave keyboards and barre chords. Journey’s “Stone in Love” is classic ’80s arena rock punctuated by Schon’s melodic guitar line. Matt Martin, a 17-year-old guitarist wearing white sneakers, jeans and a House of Blues T-shirt, takes the lead on this.

The band’s other Stratocaster is played by Mena Lemos, a 15-year-old sophomore. She takes on Rush’s “The Spirit of Radio.”

As they play, the teenagers dance, laugh and work to get the songs right. Their parents are also happy. Arezou Lemos, Mena’s mother, sees a daughter who is confident and has two sets of friends — the kids at School of Rock and her peers at Newton South High School.

“There are a lot of not-easy times that they go through as teenagers,” she says, “and having music in her life, it’s been a savior.”

Julie Martin says her son Matt was a quiet boy who played in Little League but never connected with sports. She and her husband bought him his first guitar when he was 6.

“It was immediate,” she says. “He could play right away. It gave him confidence, in the immediate, and I think long term it helps him in every aspect of his life.”

She remembers her own childhood in working-class Boston.

“I know exactly what he could be out doing,” Martin says. “That enters my mind. We are so lucky to have found School of Rock. He’s there Thursday, Friday and Saturday every week, all year.”

Rush’s prog-metal is not for beginners, with its time shifts and reggae twist.

“They’ve never played this before,” Pessia says, turning to whisper in awe. “The first time.”

So who are these kids? The future? An aberration?

It’s hard to know. But Matt Martin didn’t need to think long about why he wanted to play a Strat as a kid.

“Eric Clapton,” he says. “He’s my number one.”

To Phillip McKnight, a 42-year-old guitarist and former music store owner in Arizona, the spread of School of Rock isn’t surprising.

He carved out space for guitar lessons shortly after opening his music store in a strip mall in 2005. The sideline began to grow, and eventually, he founded the McKnight Music Academy. As it grew, from two rooms to eight, from 25 students to 250, McKnight noticed a curious development.

Around 2012, the gender mix of his student base shifted dramatically. The eight to 12 girls taking lessons jumped to 27 to 59 to 119, eventually outnumbering the boys. Why? He asked them.

Taylor Swift.

Nobody would confuse the pop star’s chops with Bonnie Raitt’s. But she does play a guitar.

Andy Mooney, the Fender CEO, calls Swift “the most influential guitarist of recent years.”

“I don’t think that young girls looked at Taylor and said, ‘I’m really impressed by the way she plays G major arpeggios.’ ” Mooney says. “They liked how she looked, and they wanted to emulate her.”

When McKnight launched a video series on YouTube, he did an episode called “Is Taylor Swift the next Eddie Van Halen?” He wasn’t talking about technique. He was talking about inspiring younger players. The video series, in the end, grew faster than guitar sales or lessons. Earlier this year, McKnight shut down his store.

The videos? He’ll keep doing them. They’re making money.

.

How Countries Around the World Fund Music—and Why It Matters

June 27, 2017

by Marc Hogan Pitchfork.com 6/26/17

Courtney Barnett is a wise-cracking, guitar-mangling embodiment of what taxpayer support can do for a musician. In 2013, the Melbourne-based singer-songwriter was able to travel across the globe to play New York City for the first time thanks to support from the Australia Council for the Arts, a government agency. A year later, she was one of the first recipients of a new, state-sponsored grant that helped her record her debut album. When it came time to promote the results, 2015’s Sometimes I Sit and Think, and Sometimes I Just Sit, government money also went toward financing her South by Southwest showcase and a European tour. Along with gracing critics’ year-end lists and international charts, the record led to a Best New Artist nomination at the 2016 Grammy Awards.

Barnett counts herself lucky to have received these early fiscal shots in the arm. “Government grants gave me creative independence when I was starting out, because it meant I was worrying less about impressing for label and publishing advances, and I was less reliant on taking some big-company sponsorship to fund a tour,” she says. As well as nurturing Barnett’s artistic growth, the benefits were also deeply practical. Without government grants, she wouldn’t have been able to take advantage of offers to play Coachella and American late-night TV shows.

Barnett played SXSW 2015 under the banner of Sounds Australia, a nonprofit founded several years earlier to spread the word about music from Down Under. Sounds Australia has organized events with more than 500 Aussie acts, including Nick Murphy, Hiatus Kaiyote, and the Preatures. Its funding sources are a hodgepodge of public and private, federal and state. The goal isn’t charity: The Australian Trade Commission has a decades-long history of championing musical exports right alongside natural resources like coal or uranium, and researchers are currently investigating the value of the music Australia sends abroad.

Like Australia, many rich countries use public funds to nurture homegrown musical talent. The amounts are often paid out by federal arts councils that tend to prioritize traditional fine arts like painting and opera, while contemporary music frequently draws funds from public-private partnerships. Regional and municipal governments contribute, too. Though these webs of financial assistance for music can be complex, and unique from country to country, the overall impression is of a funding landscape increasingly driven by market forces as much as cultural ones. And the threat of an ax to these budgets is nearly always an election away.

Under President Trump, the relatively modest U.S. budget for arts spending—of the National Endowment for the Arts’ $148 million budget in 2016, only $8 million went to programs for music, including opera—is now on the chopping block. The downturn isn’t just happening in the States: More countries with generally higher levels of cultural spending seem to be acting more like America. It can seem more trivial than ever to worry about music spending when so many other issues are at stake. But in the countries with the strongest reputations for funding the arts, cultural expression, like other basic needs, is considered a universal right, not a privilege for the wealthy.

Sweden, which allocated nearly $220 million in funding to the arts last year—including at least $7.8 million for music—passed a law in 2009 that states: “Culture is to be a dynamic, challenging and independent force based on the freedom of expression. Everyone is to have the opportunity to participate in cultural life. Creativity, diversity and artistic quality are to be integral parts of society’s development.” The dozens of artists who received Swedish Arts Council funding for recordings the past few years include melancholic art-pop project El Perro Del Mar, cosmic groove explorer Atelje, and free jazz saxophonist Mats Gustafsson. And in Sweden, federal money accounts for only 45 percent of all public spending on culture; the rest comes from regional, local, and municipal governments. When they say everyone should be able to participate, they follow through with cash.

Scandinavia also shows that a rightward turn politically doesn’t have to lead to less arts funding. Norway, for instance, has been led the past four years by a center-right coalition government that includes, for the first time, a nationalist party of the type that has been on the rise in Europe lately. And yet Arts Council Norway’s funding for music has soared, from less than $19 million in 2011 to nearly $47 million in 2017, which is impressive for a country with only about 5 million people. Total government spending on music in Norway also grew, from $117 million to around $140 million.

“Whether we have a right or left government, there seems to be a consistency in the culture politics,” says space-disco luminary Hans-Peter Lindstrøm, who started receiving grants later in his career, once he had a team to help him apply for them. “Norway is one of the best countries in the world to live in, and the arts funding is an important part of the social democracy.” There’s no guarantee of funding from year to year, so Lindstrøm uses the money mainly to scale up a current project, whether by making a video, pressing more records, or doing better marketing. Other musicians receiving Arts Council Norway grants range from avant-garde experimentalist Jenny Hval to postmodern metal explorers Kvelertak.

Scratch the surface of these admirably lofty ideals, however, and economic interests aren’t far beneath. From ABBA to Max Martin, Sweden exports pop music like no other country, and its neighbors have surely taken notice. In Norway, there’s now more talk of supporting music as an industry according to Joakim Haugland, whose Smalltown Supertown label releases Lindstrøm’s records. Haugland welcomes more jobs being created in music and hopes the spending will also benefit more niche-oriented labels like his. Given Norway’s small population, Smalltown Supersound relies on exporting its music to bigger markets. “The funding that we have might look good for you guys,” Haugland says, referring to Americans. “But I would rather have the home market that you have instead of the funding.”

Some 1,000 miles to the west of Norway, Iceland is a curious case. With only about 330,000 people—roughly half the population of Vermont—the tiny island nation has long punched above its weight culturally, thanks to phenomena like Björk and Sigur Rós. And yet in 2014, Iceland’s parliament slashed its budget for the national body that funds art projects from $45 million to $25 million, spurring intense criticism from people across the creative spectrum. Still, total government spending on music in Iceland is around $9 million a year according to Sigtryggur Baldursson, a founding member of the Sugarcubes who now runs Iceland Music Export, a public-private partnership. Noting that newer Icelandic bands are more pop-oriented than its previous indie and experimental music staples, he says, “We’re trying to have music projects thought of more in the vein of startups.”

Surely the biggest of Iceland’s current batch of musical exports are pop-folk act Of Monsters and Men, whose 2011 album My Head Is Animal went platinum in America, among several other countries, and spawned the Top 20 hit “Little Talks.” The group never took grant money from the government, but to support its first North American tour, it did receive a financial boost of about $8,000 from the Kraumur Music Fund, which was underwritten by a private foundation and now exists as an annual prize for best album made in Iceland. “It wasn’t a ton of money when you’re talking about touring a foreign band in another country,” recalls Heather Kolker, Of Monsters and Men’s longtime manager, “but it helped.” Artists from Iceland, after all, can’t just hop in a van and hit the road. Kolker, who lived there for four years, says the country’s music really does play a part in boosting tourism. “The government should take it seriously.”

In North America, it’s hard to imagine a government-supported artist more prominent right now than Abel Tesfaye, the Canadian pop lothario best known as the Weeknd. Now a multiplatinum artist who has worked with everyone from Daft Punk to Kendrick Lamar, in August 2013 the Weeknd was already booked in overseas arenas ahead of his proper major-label debut album, Kiss Land. That’s when his management received almost $150,000 for marketing, promotion, and more. (Neither the Weeknd nor his management would comment for this story.)

The money came from FACTOR, a public-private partnership geared toward advancing the Canadian music industry. The Canada Council for the Arts, which funds classical music, awarded almost $21 million in music grants and prizes last year, as Prime Minister Justin Trudeau’s government sharply increased federal arts spending. FACTOR, with funds from the Department of Canadian Heritage and Canada’s private radio broadcasters, provided only about $11 million in funding, but that was mainly classified under folk, alternative, rock, and pop. A FACTOR grant financed the showcase gig that brought Majical Cloudz to the attention of Lorde, who later brought the Montreal duo on her North American tour. FACTOR also supported the making of Grimes’s Art Angels, as well as recent projects by Carly Rae Jepsen, White Lung, and U.S. Girls. In recent years, two of the larger Canadian provinces, Ontario and British Columbia, have also rolled out their own music funds.

If Scandinavian governments treat art as a right, Canadian officials seem to be buying into the idea that music creates economic value. “That’s been the big shift in thinking, from a cultural activity to an investment,” FACTOR president Duncan McKie explains. Likewise, and unlike the Canada Council, FACTOR is admittedly oriented toward commercial success. Where FACTOR is at least partly taxpayer funded, Canadian musicians have another, wholly private source of money available to them, too. Radio Starmaker, funded by the major commercial broadcasting companies, awarded about $6.6 million in grants last year, to Grimes, Majical Cloudz, Purity Ring, Fucked Up, and many other artists considered “rising stars.”

With so much funding available, and so much of an emphasis on sales potential, some grumbling about the Canadian process is inevitable. FACTOR alone has been criticized as insular and supportive of mediocrity, while Canada Council’s recent rollout of a new online grant platform was beset with glitches. But for many artists, even an imperfect system of funding would still be far better than no funding at all.

“If I didn’t get it I’d be making synth-pop,” jokes Owen Pallett, the violin-looping singer-songwriter, recurring Arcade Fire collaborator, and Oscar-nominated film composer. More seriously, Pallett contends that trickle-down economics, at least in artistic communities, actually works. Even when he has been playing to smaller crowds in out-of-the-way towns, he says, he has been able to pay his band what he considers a living wage: What they’d make if they were working in a bar at home. “Government funding for the arts is a mark of a successful civilization and should be maximized,” Pallett emphasizes. He’s less interested in nitpicking FACTOR’s funding choices than expanding them.

Grants can also keep artists afloat as they navigate the new economic realities of streaming. “Now the concept of putting even $10,000 into making a record is an expensive investment on something that probably isn’t going to return that much,” says Preoccupations guitarist and synth player Scott Munro, whose Calgary-based band has received FACTOR funding. “You’ll make money off radio play, but it’s definitely not like it was even 10 years ago. The granting system helps to ease that transition.” For a band on Preoccupations’ level—critically respected and able to play festivals worldwide, but not a presence on major charts—that money might mean being able to record in a better studio without going deep into debt or having to go back to holding down a regular job.

In country after country, government support for music, when not weathering cutbacks, seems to be growing more purely economically motivated. On the economic side is South Korea, which started a $1 billion investment fund for its pop industry in 2005. That led to the K-pop boom that reached cultural ubiquity with PSY’s “Gangnam Style.” Official documents show that the Ministry of Culture, Sports, and Tourism has allocated at least $6.7 million for music in 2017. However, the agency also found itself ensnared in the influence-peddling scandal that led to the impeachment of President Park Geun-hye; its CEO, Song Sung-gak, resigned last November amid embezzlement charges. And Chinese consumers have recently been boycotting Korean pop culture out of objection to a new missile-defense system.

Spain, on top of about $106 million in national funding for the music and dance industries, budgets about $5.5 million, at the national and regional level, for sending its music abroad. France, along with its $315 million in federal music funding, promotes acts like Christine and the Queens, Amadou & Mariam, Justice, Charlotte Gainsbourg, and more overseas (but not Daft Punk, who wanted to do things without state support). Portugal, a newcomer to music funding, recently set up the WHY Portugal export group as a public-private partnership.

As for cuts, Arts Council England had its overall budget slashed by 30 percent under austerity policies in 2010, though it has rebounded slightly since. That same year, the once-prolific Scottish Arts Council was replaced by Creative Scotland, an agency with a broader remit. But earlier this year, Creative Scotland’s current leadership warned of budget cuts.

America, in all this, is like an outlying planet with a powerful gravitational pull. Lacking grant funding, its music industry is inherently market-driven—and, despite the bottom falling out in the early 2000s thanks to digitization, hugely dominant: With $7.7 billion in U.S. sales last year, the domestic record business still accounts for almost half of the $15.7 billion global industry. Then there are the cuts: In March, as expected, Trump called for defunding the National Endowment for the Arts.

In response to the planned cutbacks, the artistic community has resorted to the cold logic of business. In an April essay called “What Good Are the Arts?,” David Byrne invoked the economic argument for arts funding: “Investment in the arts doesn’t cost us money—it makes us money!” Sure enough, New York City mayor Bill de Blasio’s office recently issued a report declaring that the city’s “music ecosystem” generated $21 billion in economic output in 2015. But an ecosystem can’t truly be measured in dollars; Byrne didn’t create the Talking Heads’ classic Remain in Light simply out of concern for Warner Bros. Records’ shareholder value.

When President John F. Kennedy championed public support for the arts, in a 1962 Look magazine article, he wrote that “the life of the arts, far from being an interruption, a distraction, in the life of a nation, is very close to the center of a nation’s purpose—and is a test of the quality of a nation’s civilization.” And when a song rewires how we see the world, makes us cry or helps us fall in love, music lovers don’t usually wonder if they should have put their time and money toward a well-diversified portfolio instead.

Funding the arts makes more sense if supporters acknowledge what it’s really about—being the type of country where basic rights, including free creative expression, are assured—rather than couching it in economic language that may only bore its intended target while alienating the cause’s natural backers. Advocacy for the arts could at least be artful.

“Even if cultural industries did not generate significant economic benefits—and they do—we would still argue the state should be funding art and culture,” says Don Wilkie, co-founder of Montreal’s venerable Constellation Records label. “In the western world at least, vast sums are continuously reallocated by the state in the service of corporate shareholders, but the culture industries arguably serve far greater numbers of citizens and surely are as worthy?”

All told, American musicians have advantages that artists in other countries don’t. And there are certain benefits human beings everywhere should enjoy. Music is one. The profit motive has of course resulted in plenty of profoundly great music, as fans of the Beatles and the Rolling Stones, Michael Jackson and Madonna, Rihanna and Kanye West—or, truth be told, most of today’s grant-funded musical exports—can attest. But public spending on art, for art’s sake? It’s still a test of the quality of a nation’s so-called civilization. As Courtney Barnett says: “Whoever pays the piper calls the tune, you know?”

Spotify Is Growing, but So Are Its Losses

June 17, 2017

By BEN SISARIO 6/16/17 NYTimes.com

Is streaming music a good business?

Streaming has taken over as the dominant music format and is attributed with revitalizing the moribund business of record labels big and small. But for streaming companies, the answer is not as clear-cut.

Last week, Pandora, which has been bleeding money as it tries to adapt its business model to compete with Spotify and Apple Music, accepted a $480 million investment from SiriusXM, giving up 19 percent of its ownership and three board seats.

And on Thursday, Spotify released its annual report, which may be the last piece of financial data available to investors before the company formally moves to go public, expected this year or next.

On the surface, its results are impressive. Spotify, which is based in Sweden, had 2.9 billion euros (about $3.3 billion) in revenue in 2016, up 52 percent from the year before. On Thursday, Spotify also announced that it has 140 million regular users around the world, 50 million of whom pay for monthly subscription plans.

But its revenue growth has slowed — last year, revenue increased 78 percent from the year before — and its losses are mounting. In 2016, Spotify’s net loss totaled about $600 million, up from about $257 million the year before. The company attributed this increase to the costs of servicing its debt — it raised $1 billion last year in convertible debt — and to the effects of foreign exchange rates.

Since the company began, the costs of paying record labels and others for licensing rights has been by far its biggest expense, and the more its users click, the more Spotify must pay. According to a company statement, royalty and distribution costs equaled nearly 85 percent of its revenue. Add in nearly $900 million in salaries, marketing, product development and other costs, and, once again, expenses far exceeded revenues.

When will it be profitable? In its report, filed with European regulators, Spotify repeated a statement it has made numerous times over the years: “We believe our model supports profitability at scale.”

But it has never been clear what scale means. Since it began its service in 2008, and arrived in the United States in 2011, Spotify has grown extremely fast, becoming a household name among young people. It has even brought a once-reluctant Apple into the business of selling music subscriptions — Apple Music, introduced just two years ago, has become Spotify’s biggest competitor, with 27 million subscribers.

As recently as four years ago, Spotify was using 40 million paying users as a threshold number to demonstrate how much money it could contribute to the music economy once its business reached a certain size.

Now, with the company looking to go public, investors will be considering how that expanding girth can benefit Spotify itself.

As Spotify grows, economies of scale will help in areas like product development, said Mark Mulligan, a digital media analyst with Midia Research, and with more financial clout, particularly after going public, it could pursue more disruptive goals like signing artists directly. It is also pushing to improve margins, by renegotiating licensing deals with record labels.

Still, he added, streaming itself has not proved profitable for Spotify or any other service like it.

“Streaming is the content industry’s response to Napster,” Mr. Mulligan said. “We have not got highly viable user propositions, but have yet to develop commercial models.”

Spotify declined to comment on what “scale” means — the number of users, subscribers or revenues at which its losses will tip to profits. In its report, the company indicated that the most important kind of scale it is currently pursuing is signing up more users. It is now available in 60 territories around the world, including Japan, the world’s second-largest music market, which for years had remained stubbornly resistant to streaming.

“We believe we will generate substantial revenues as our reach expands and that, at scale, our margins will improve,” the company said. “We will therefore continue to invest relentlessly in our product and marketing initiatives to accelerate reach.”

Norton Records, Still Rocking……

May 11, 2017

BEN SISARIO 5/09/17 NYTimes.com

Six months after the death of Billy Miller, his wife, Miriam Linna, still keeps his ashes in their only appropriate place: next to the couple’s gigantic collection of 45 r.p.m. records.

For nearly 40 years, Mr. Miller and Ms. Linna reigned as the king and queen of New York record collectors. They hunted for rare rockabilly singles, chronicled lost scenes in their magazine Kicks, and founded Norton Records to reissue some of their greatest and most bizarre finds, with liner notes that had scholarly depth but also showed the excitement of true fans.

When Mr. Miller died in November, at 62, of complications of multiple myeloma, kidney failure and diabetes, Ms. Linna was left to ponder her life alone as well as the future of their sprawling business, which includes not only the label but a book publishing imprint and the tiny Norton Record Shop in Prospect Heights, Brooklyn.

“People say, ‘You’re independent, you can do this on your own,’ but that independence thing was two people,” Ms. Linna, 61, said in a recent interview at her Brooklyn loft. With jukeboxes, pulp paperbacks, records and B-movie posters everywhere, the apartment doubles as a virtual museum of rock ’n’ roll ephemera.

“Working as a fan, as a label owner, magazine publisher, whatever — it’s always been side by side, and having a blast with it,” she added, holding back tears. “It’s a little harder having a blast by yourself.”

This week, Ms. Linna is pressing on with perhaps Norton’s highest-profile release: Dion’s “Kickin’ Child: The Lost Album 1965,” a collection of folk-rock songs that represented a maturing phase for the singer of “Runaround Sue,” but were mostly rejected by his label at the time, Columbia Records.

“Kickin’ Child” was the last album that Mr. Miller worked on, and it will be Norton’s first release since his death. The label worked closely with Sony Music, which owns Columbia, to prepare and manufacture the album, but by Dion’s choice it is coming out on Norton.

“Passion’s worth more than money in the music game, and I know they have passion,” Dion said of Norton and the couple behind it.

If record collectors have storybook romances, Ms. Linna and Mr. Miller lived it. They met at a record fair in 1977 and soon began publishing Kicks, following a path laid by earlier fanzines like Bomp! in digging excitedly into the little-known corners of rock history.

By 1986, when Ms. Linna and Mr. Miller started Norton — named after Jackie Gleason’s neighbor on “The Honeymooners” — they had already started to dig much deeper than most, and the Norton catalog swelled with unusual artifacts like reissues of the wild one-man band Hasil Adkins and exhaustively researched studies of regional garage-rock scenes.

“I think of them like archaeologists, going through the layers of this music to find its root source,” said Lenny Kaye, the guitarist, rock historian and compiler of the 1972 album “Nuggets,” another precursor to the Norton method. “They have found just beautiful, beautiful people whose purity of expression is why we listen in the first place.”

Norton’s taste has attracted superstar fans like Elton John and Robert Plant, who was named the label’s customer of the year in 2006. Norton also became a precursor to what is now a broad field of young labels, like Light in the Attic and the Numero Group, that specialize in tasteful, “curated” reissues of obscure recordings.

But Ms. Linna, whose blond bangs hang just above her eyes, loathes the highfalutin word “curator,” and she isn’t wild about “collector” either. Waving at the wall of records she accumulated with Mr. Miller, she alternately calls it junk, stuff and “crapola,” which she means lovingly.

“I can guarantee you,” she said proudly, “that every record in there is good.”

As an example, she pulled out a Velvet Underground disc that she believes may be the only one of its kind: An acetate record containing the song “Heroin” that she said Mr. Miller found while poking through a box of doo-wop records. When talking about their work together, Ms. Linna sometimes catches herself still referring to her husband in the present tense.

Mr. Miller’s death is not Norton’s first setback. In 2012, its warehouse in Red Hook, Brooklyn, was flooded by Hurricane Sandy, destroying most of the label’s 250,000 records, along with paperwork, master tapes and much of the stock of their book imprint, Kicks Books.

“It took a lot of gusto out of the game to see stuff floating around there,” Ms. Linna recalled. Drawing on decades of good will in the business, they got much of the label’s catalog back into print, and Norton now sells discount “Sandys” records — jacket gone, vinyl fine — in bins outside the shop.

Last year, they heard some of the tracks that Dion recorded in 1965 with Tom Wilson, Bob Dylan’s producer, and were stunned. Songs like “Now” had keening harmonies and a crisp sound that only die-hard fans knew about. Through a mutual friend, Scott Kempner of the band the Dictators, they got in touch with Dion, who told them that he had planned an entire album.

“Columbia said, ‘What are you doing?’” Dion recalled. “And I said, ‘I’m making music that cannot be denied.’ And they said, ‘These aren’t hit records,’ and they just tossed it aside.”

Norton worked with Dion and Sony to assemble the album, using original mixes that in some cases have never been released.

 

When Mr. Miller died, the Dion project was in midstream, and Ms. Linna said she was considering whether to close the shop. Then the vultures started swarming, asking if she wanted to sell the label. Even now she sounds surprised at how defiantly she responded.

“I got a little bit ragged but righteous with them,” Ms. Linna said. “I did tell them, in no uncertain terms, that we were going to be a label” — her voice rose to a yell — “long after they were going to be food for the cockroaches and dinosaurs! I don’t even know what that means, but it was like, good-bye!”

The store remains open, and Norton is going full steam. The next project is to produce expanded reissues of some of the label’s landmark albums, like Mr. Adkins’s “Out to Hunch,” Norton’s first album. Next year, Ms. Linna plans to release a book on the Detroit label Fortune Records that Mr. Miller spent seven years researching, with the musician and writer Michael Hurtt.

“I know without a doubt in my mind that if it was me not Billy, Billy would not let go of the dream,” Ms. Linna said. “And the dream is not like something far off in the future. This is the dream. We’re living it.”

Hey Hey, My My: Aging Rock Fans Still Hold Their Lighters High

April 9, 2017

By TAMMY La GORCE NYTimes.com 4/07/17

Pete Townshend of the Who struck a nerve with rock ’n’ roll rebels in 1965 with the line “I hope I die before I get old.”

But something has happened in the five decades since he wrote “My Generation”: The boomer generation got older, yet continued to love rock ’n’ roll. Now, as many of those early fans enter retirement, they are still boarding buses and trudging through muddy fields to see their favorite bands.

“It used to be that when you retired, you went to Leisure World or the old retirement complex,” said Mark Hover, a 65-year-old who lives in Moreno Valley, Calif., and retired in 2004 after 30 years working for the United Parcel Service. Now, he said, other options are more appealing to him.

“What you’re supposed to do in your golden years is more of what you love,” he said. “What I’ve loved all my life is going to see live music.” He attends more than 100 shows a year, spending thousands of dollars traveling to concerts and multiday rock festivals like Bonnaroo, in Manchester, Tenn., which he plans to attend in June. He finds that he is far from the only “old guy” — his term — rocking out.

Concerts aimed at old guys are big business. According to the music industry tracking firm Pollstar, the six-day music extravaganza Desert Trip, featuring the Who and fellow rock veterans like the Rolling Stones, Bob Dylan, Paul McCartney and Neil Young, took in $160 million last year. Held in Indio, Calif., the festival catered to “an older, more affluent crowd,” Pollstar said. Mr. Hover was there, and paid $399 for his ticket.

Tickets to other concerts and festivals likely to draw audiences old enough to remember Woodstock — among them the just-announced Classic East and Classic West, with the headliners Fleetwood Mac and the Eagles, scheduled for New York and Los Angeles this summer — are also selling robustly.
Photo
Yonder Mountain String Band. Credit Carlos Gonzalez for The New York Times

Mr. Hover said he likes younger acts, such as the Raveonettes, too. The online ticketing service Eventbrite found in a 2015 study conducted by the Harris Poll that 44 percent of those ages 51 to 70 are attending more live shows now than they did in 2005. Of those concertgoers, 40 percent say they want to stay abreast of current tastes.

“My generation had this thing about, don’t trust anyone over 30,” said Sheldon Donig, 70, a retired developer from San Anselmo, Calif. “But age doesn’t seem to be an issue at the festivals I go to. Younger people don’t seem to be ageist.” He said he plans to take his R.V. in June to the Kate Wolf Music Festival in Laytonville, Calif., and in August to the Oregon Eclipse in Crook County, Ore.

For many retirees, concertgoing is a lifestyle, and not a new one. “It’s not like we were playing golf and all of a sudden quit and started seeing shows,” Mr. Donig said. “We’ve been doing this since we were in our 20s.” The difference now, he said, is that they can do more of it.

Bob McAdam, 74, a retired CVS pharmacist from Bourne, Mass., also dived deep into live music after retiring in 2014. He says he attends roughly 150 concerts or festivals a year, twice as many as when he was working. “I don’t drink, I don’t smoke, I don’t play golf, and I don’t have a second home in Florida,” he said. “Music is my only hobby.”

Mr. McAdam has built a social network through his showgoing. “You get to know people, and you keep in touch with some of them,” he said. He has little time for peers of his who have given up on contemporary music.

“A lot of people not even my age, but a lot younger, have this idea that Led Zeppelin was the best thing you could listen to, and that there’s nothing worth listening to anymore,” Mr. McAdam said. “That’s just wrong. Also, hearing new music keeps you current.”

Occasionally, it can exhaust you. “Festivals are thought of as a younger person’s game because it can be challenging to be out in the summer sun from morning till dusk two or three days in a row,” said Jeffrey Schneider, 54, a lawyer from Dix Hills, N.Y., who plans to retire in the next year or two to focus on concertgoing. “You need stamina. But as Warren Zevon said, ‘I’ll sleep when I’m dead.’”

Festival logistics can be especially hard on retirees with health issues, like Timothy Sanford-Wachtel, 68, a presiding Workers’ Compensation judge in Riverside, Calif., who has survived cancer. Mr. Sanford-Wachtel is planning his impending retirement around concerts and festivals. “Sometimes it’s tough to navigate my walker around 100,000 people,” he said. “But I always tell people I’m not going to quit until the Rolling Stones do.”

Dan Berkowitz, chief executive of CID Entertainment, a Philadelphia company that offers concert travel packages, said retirees tend to expect a smooth operation. “People who are a bit older have the reputation of being demanding,” he said, because they know they should not have to wait in line 45 minutes to get past security, and should not be stuck behind a billboard so they can’t see the stage. Because of retirees’ influence, he said, festival organizers, especially at shows like Desert Trip, which he described as “generally luxurious, as far as festivals go,” operate more carefully.

While clients in their 50s and older represent about 15 percent of his business, they account for about half the attendance at shows that cater to them, like Desert Trip and Fare Thee Well, a 2015 series of concerts by the surviving members of the Grateful Dead. One client in this age group, who has been going to Bonnaroo for eight years, regularly arranges for five or six buses to travel to the festival through CID. “He’s done well for himself, and when it comes time for him to have a bit of fun, he likes to bring his family and friends along,” Mr. Berkowitz said.

Millennials are often said to value experience over material things, but Mr. Berkowitz says he associates that sensibility with his most senior clients. “They know they’re not going to remember that one year they bought a new TV, or got a car with an upgraded moon roof,” he said. “They’re going to remember seeing their favorite artists with family or friends.”

Jill Seagraves, 61, of Upper Montclair, N.J., couldn’t agree more. “My parents used to like to watch golf on TV with drinks on a Sunday afternoon,” she said. “That’s nothing that ever interested me.” Instead, traveling to see festivals like Desert Trip has kept her occupied, and happy, since her children left home; she is a retired homemaker.

“There’s going to be a day where people like Neil Young don’t play anymore, and I want to be at their last tour,” she said. “I want to die with a wristband around my wrist.”