This week In the Hot Seat with Larry LeBlanc: Jeff Price, founder and CEO, TuneCore.
Over the past decade, a mountain of tools and services has re-shaped the music business.
As music fans now discover and experience music in many different ways, the traditional gatekeepers have been largely swept away; and the DIY ability to reach out directly to consumers has become a pivotal part of the music industry food chain.
With its more than 500,000 unsigned independent clients, TuneCore in Brooklyn, New York distributes to iTunes, Amazon and others. If anyone can sell through TuneCore, then iTunes and the others are open to just about any musician.
As a result, for the first time in recorded music history, artists can directly reach mass retail without a label.
“There are more artists making money now than in any point in the history of the music industry,” declares Jeff Price, the combative founder and CEO, of TuneCore. “And there are more artists being bought, heard, streamed, listened to, and shared than any point in the history of this industry.”
With TuneCore, any artist, for a minimal maintenance fee, has access to the channels of music distribution while they are able to maintain control of all of their master and publishing rights. They also receive all of the revenue from the sale of their music.
In 2006, Price and his partners launched TuneCore. Within 24 months, TuneCore had amassed over 65,000 customer accounts; had delivered over 500,000 songs; and generated over $5.5 million in music sales.
Price had previously been GM / president of New York-based spinART records for 17 years—the first record label anywhere to offer its catalog of releases via paid download as MP3s.
Before it folded, spinART had distributed over 200 releases, including those by such acts as: Ron Sexsmith, the Dears, the Pixies, Frank Black, Nellie McKay, John Doe, Apples In Stereo, Vic Chesnutt, Richard Thompson, Echo & the Bunnymen, Paul Kelly, the Fastbacks, the Church, Lilys, the Eels, Clem Snide, Michael Penn and others.
Meanwhile, from 1997 to 2001, Price worked with eMusic, which launched the first online digital music store in 1998. Price served first as a consultant; next as interim VP of content acquisition; and finally as the senior dir. of music/business development. He is credited with creating and implementing the first subscription-based music sales and distribution structure.
According to TuneCore, its artists—which have included such known names as Drake, Nine Inch Nails, Aretha Franklin, Medic Droid, MGMT, Tapes 'n Tapes, the Zac Brown Band, Kelly, Ricky Skaggs, Ziggy Marley, and Izzy Stradlin—have sold over 300 million streams and downloads, generating over $130 million dollars in gross music sales.
Meanwhile, as acts like Boyce Avenue, Secondhand Serenade, Blood on the Dance Floor, Colt Ford, and Brantley Gilbert fly below the radar of the music industry and the mainstream media, they are racking up some eye-popping sales figures.
Do you like the term “indie artist?”
I like the term “indie artist” as long as it is taken the right way. Arcade Fire, as you are aware, won the Grammy for Best Album (for "The Suburbs”), and the media’s reaction was disgusting. “A shocker.” What is so shocking about Arcade Fire winning a Grammy because they are an indie artist? So they are second-class artists?
I think the response was really about the Grammy’s traditional conservatism as indicated by Lady Antebellum winning 5 Grammys this year.
I didn’t read that (the Grammys) were conservative. That’s not the angle of the Huffington Post article or CNN or the local TV news media that I saw reporting on it. They weren’t talking about the conservatism of the Academy, and how unusual it is for them to broaden. They were discussing how an indie band, this second-class citizen band, could be awarded such as prestigious award. I saw the word “indie artist.” The Huffington Post put on its own page “Shocker: Indie band wins best album.”
Indie artists are treated like second-class citizens, and it’s a badge of honor for many artists. An artist now is an artist whether they are signed to a major record label or signed to an independent record label or are themselves independent.
[The Huffington Post news story was quickly re-headlined to, “An indie rock band has won the biggest prize in mainstream music.” The article went on to say, “The Arcade Fire, whose third album, "The Suburbs," set the summer ablaze for young fans around the world, completely shocked the Grammy Awards on Sunday, taking home the award for Album of The Year. They beat out Eminem and Lady Antebellum, both of whom had taken awards home earlier in the night.”
In follow-up Grammy stories in The Huffington Post, Austin-based writer Phil West wrote a wry appreciation of the Canadian band, and its indie roots under the headline, “Why America Hates Arcade Fire, And Why That’s Sort of Hilarious.” Another Huffington Post story with the headline, “Who Is Arcade Fire?” poked fun at those “out of touch” people who didn’t know the band.]
You have people like Tommy Silverman (chairman and CEO of Tommy Boy Records) making public statements that 80% of the music being released by artists on TuneCore is crap, and is cluttering the market space. Indie artists are treated as second-class citizens by some of this industry and that pisses me off. It pisses me off, because it denies them opportunities that they should be getting. If you have people that work with Pepsi or Coke or brands or radio stations hearing over and over, “look at the little indie club,” then (these industry people) are communicating something.
[In a July, 2010 Wired magazine feature, titled “What's Wrong With The Music Biz,” Tommy Silverman charged TuneCore with helping to clutter the music environment.
In the interview Silverman said, “In 2008 there were 17,000 releases that sold one copy. Last year (2009), there were 18,000, and something like 79,000 releases that sold under 100 copies. Under 100 copies is not a real release — it’s noise, an aberration. In any kind of scientific study, it would be filtered out. It’s like a rounding error. That 79,000 number represents almost 80 percent of all the records released that year.
“80 percent of all records released are just noise — hobbyists. Some companies like TuneCore are betting on the long tail because they get the same $10 whether you sell one copy or 10,000. Who uses Photobucket and Flickr? Not professional photographers — those are hobbyists, and those are the people who are using TuneCore and iTunes to clutter the music environment with crap, so that the artists who really are pretty good have more trouble breaking through than they ever did before.”]
You have a staff of 32 people.
Sometimes, I turn around, and I think, “Oh my gawd, when did this happen?” There are four people in finance; a chief marketing officer with two people under her; a chief operations officer; and then there’s the artist support staff. There’s a sub-division of the artist support staff which deals with copyright infringement and fraud. I can’t tell you the things that have popped up, and I’ve thought, “You have to be kidding me. I have to deal with this sort of stuff?”
Are you libel for copyright infringement?
We warrant and represent to the digital stores that the content is cleared to use. Fortunately, there are safe harbor laws in the U.S. (a provision of a statute or a regulation that reduces or eliminates a party's liability under the law), and we don’t make any money when the music sells. But that does not mean that we believe that there should be copyright infringement. So we invested our own time and money to put a team together. We review every release that moves through the system to make sure that it’s not an infringement.
How can you insure that?
When our customers use TuneCore, they have to warrant and declare that they control the rights of the master recording, and that they are going to pay the people that they are supposed to pay. We put up a lot of (copyright) information on our site. Sometimes, it’s nobody’s fault, but people aren’t always educated on what copyright is about. They don’t understand that they just can’t cover a Michael Jackson song without compensating the songwriter through a mechanical royalty reproduction. So, there’s some unintentional infringement that happens. We do workshops, we put out booklets, and we put up information on our site (about copyright and other issues). I want everybody to make the money that they are supposed to make.
Within 24 months of launching TuneCore in 2006, you had 65,000 customers. How many customer accounts do you now have?
You feel that anybody should be able to make music, and put it up for sale. No barriers to get into the music industry?
No barriers. Just like there shouldn’t be any barrier to someone taking a music class, hiring a music teacher, or buying a guitar.
Many people feel there’s too much product, and too many artists today. That it’s hard to distinguish between artists. No longer are there gatekeepers. A musician can record in a home studio without any career guidance. And, that’s what the recording industry once did.
I couldn’t disagree with you more. Some 98% of what the major record companies released failed. So much for the gatekeepers. They had a 2% hit radio, and a 98% failure ratio. Okay, let’s go to the guy that creates shitty music, and it’s sitting on a computer hard drive. Well, the music still exists; it’s sitting on their hard drive. Let’s have that music sit on Apple’s hard drive. What’s the difference? How did the marketplace just get cluttered?
When you go to iTunes, the only way that you can find music is by clicking on something, or typing in a band name or the name of a song. Nobody puts a gun to your head, and makes you go and listen to what might be considered bad music. Nobody makes you go to somebody’s MySpace. What’s the difference if the music sits on their hard drive, or sits on Apple’s hard drive?
It still takes a major label to develop a major act today, certainly internationally. It just isn’t good enough to put music up online, you have to do some marketing behind a release.
It makes perfect sense what you are saying; I just don’t agree with it. The reason that I don’t agree is because of the 98% failure ratio at the major labels. They spent billions of dollars pushing out bands you’ve never heard of. So marketing something doesn’t make something a success. I know that’s not what you are saying, but I’m trying to make a point.
The second part of this is that art causes a reaction. If “Smell Like Teen Spirit” (by Nirvana) was a crappy song, it doesn’t matter how many times you saw the video or heard it, art has to cause a reaction.
I will state this, I am uniquely qualified to make some of these statements, not because I have a big ego, but because I have access to data that nobody in the planet has. TuneCore artists have sold 300 million units in the past 2 1/2 years, generating over $130 million in music sales. These are bands that apparently you have never heard of. How did they do that?
What was the gross sales figure for TuneCore artists in 2010?
2010, If I recall correctly, is somewhere in the neighborhood of $90 million if you take into account all of the income streams generated off of the sale of a song.
[According to Price, the 2010 tally came from adding together revenue from varied sources, including: music sales (downloads); music streams free (ad supported like Spotify); music streams paid (like Mog, Rdio, Napster, and Rhapsody); ad supported video streams on sites like YouTube; mechanical reproduction royalties for downloads; interactive stream mechanical royalties; public performance royalties; income derived from digital transmissions; and from TV and film synch licensing, etc.]
What income came from streaming and downloads?
I won’t answer that question because I don’t think that’s a proper way to discuss it. The revenue generation is no longer predicated on music sales.
You have public performance income that has gone up 75% in the past 6 years; from $1 billion to over $3 billion dollars collected by ASCAP, BMI and SESAC from public performances. Guess who is getting that money for the first time? These “unsigned” artists. It is not just coming from AM and FM radio airplay. It is coming from YouTube and MySpace streams; and public performances from services like Pandora, Last.fm, Slacker, Spinner or AOL.
You have digital transmission revenue coming in from things like Slacker, Pandora and LastFm that went from $15 million in 2004 in revenue generated, to $200 million in 2009 generated, according to Sound Exchange.
You’ve got digital income. You’ve got merchandise sales. You’ve got work-for-hire. So I’m going to state it emphatically and empirically, the revenue generation for artists is up. It’s not down, and it’s up significantly. There are more artists making money now than in any point in the history of the music industry. And there are more artists being bought, heard, streamed, listened to, and shared than at any point in the history of this industry.
There are certainly more sources of music-related income today.
The real value of music is copyright. The amount of money generated off the sale of music is going to continue to decrease. The sale of music is going to get cheaper and cheaper. The one thing that is going to go up and up, as far as the volume of revenue, is the publishing side. It’s derivative; it’s the public display; it’s mechanical reproduction. What gets left out of the conversations of revenue generation is this other side of the coin. Why doesn’t that get talked about?
I hear people say there’s a decrease in revenue off of music sales. Bullshit! Actually, the number of songs being sold, and the number of artists selling them and the number of units being sold is up and not down. It’s way up. It was only up 1% this year, jeez, I’m sorry it only went up to 1.7 billion units sold as compared to 10 years ago when it was below 600 million.
The amount of revenue being generated is sky-rocketing for the artist. It is decreasing significantly for a record label, but for an artist that goes (sells) direct, it has gone the way up. It is fascinating because the cost of buying a song is going down. The cost of buying music is down because there’s no middleman getting a piece of the revenue coming in for the sale of the music.
With TuneCore, the net income goes directly into the pockets of artists?
Let me give you an example. Sell one album of 10 songs or more on iTunes and an artist makes $7.00. If they sell one album through a major record label, they make $1.40. They sell two songs—just two songs on iTunes in the U.S., and they will make $1.40. So, the amount of revenue going to an artist’s pocket is up.
Still, I would doubt if the median income for musicians has risen.
With so many musicians out there today, it’s harder to make money as an independent.
That’s absolutely false. I can show you artists that are now making (significant) incomes that five or 10 years ago, without TuneCore’s existence, were making zero. I can list probably 10 artists that have made $1 million through TuneCore. Boyce Avenue sold two million songs in the past 24 months. Ever heard of them? Secondhand Serenade used TuneCore before they decided to go over Warners (on Daniel Glass’ Glassnote Records) and sold 1/4 million songs in 45 days. Kelly (Liam Kyle Sullivan) uploaded the “Shoes” video to YouTube (with over 40 million views) and has sold 2.8 million songs in the past 24 months.
Blood on the Dance Floor wrote some songs about sexting and sold upwards of 750,000 songs in the past three months. Lecrae, a Christian hip hop artist, 1.8 million songs sold. Country artist Colt Ford has sold over a million units, and Brantley Gilbert has sold 750,000 songs. Drake used TuneCore before he was signed to a record label and sold 800,000 songs. I could go on and on.
How can the media or the general population say that artists aren’t making money, and that the music space is cluttered? Sales are up, not down. More artists are making money then any point in history. I am not saying every artist. That’s ridiculous. Nor am I suggesting that they ever would. I am saying that there are more artists making more money.
Just in the last month (reported at TuneCore), Lecrae sold 5,000 albums and 33,000 singles. Boyce Avenue did 42,436 songs and 2,500 albums. Charlie McDonnell—7,683 songs, and 3,300 albums. Colt Ford—30,000 songs, 1,400 albums. This is real money.
Today is like the ‘60s again, when there were garage bands everywhere.
How is it different from the way it was? All that has happened is that the music that has been recorded is sitting on iTunes’ hard drive. What has changed? When I was running spinArt, do you know how many demos we got?
Everybody thinks they deserve to be a star today.
That is a direct impact of technology, where everybody is getting their 15 minutes of fame. You can put yourself onto a MySpace page and, all of a sudden, you are famous. Fame is getting shorter. It is getting harder to have legacy type fame.
People watch “American Idol” and figure they can be stars too.
I agree with you that everybody thinks they can do it, but I would also suggest that be it the ‘60s, ‘70s, ‘80s or whatever, there were always people that wanted to pursue the dream. How is performing on “American Idol” or having access to a (home) studio causing clutter? If the art doesn’t cause a reaction, it bombs. What got cluttered?
Technology has provided an access to the entertainment business that wasn’t there previously.
That’s absolutely right. Technology has made it a hell of a lot easier. The distribution component was the most important component of what the major labels were. If you had enough money, you could market and promote (music) on your own. But, even with money, you couldn’t do the distribution.
I think you would be thrilled with the fact that technology has changed everything, because there are so many artists now being given opportunities to have access without having to write that stupid, vapid pop Twinkie single. Ultimately, what I think will come out of this is artist development again.
Nevertheless, it is a challenging marketplace, and many artists have unrealistic expectations.
Nobody creates music and says, “This sucks and nobody is going to buy it.” When they make their art, everybody thinks it’s the best thing in the world, and they believe in it. Sometimes it is, and sometimes it still is, but people don’t buy it.
What hasn’t developed in recent years is the art of songwriting.
That, I agree with. With the consolidation of the media into multinational conglomerates, they don‘t have patience with artist development anymore and they want to get an ROI (return on investment) in three months. So it's all about one-hit Twinkie pop singles.
If TuneCore is so successful for artists, why have many artists moved onto a major label? Like Drake, MGMT, or Zac Brown Band?
You are going to have to ask them, but I can provide you with a list with artists that haven’t. I’m not a record label killer. I think that there’s value. You cannot be Lady Gaga without a major record label. Period. End of story. You cannot get commercial radio play without a major record label in the United States.
Why did you do a deal with Universal Music in 2009?
The reason I did the deal was that I felt that it was my responsibility to provide artists with opportunity and information (about a major label). Then, it would be up to them as to what they wanted to do. There are artists that would like to be signed by record labels. It’s not my place to tell them that they shouldn’t be. I believe that it is my job to provide them with access to (information) to pursue their dreams and goals.
What did you learn from running spinART records that you brought to TuneCore?
I had 17 years of running my own label with my high school friend and partner. I started spinArt records with my friend Joel Morowitz out of college in 1991. Then 17 years later, the label shut down.
Somewhere along the way in 1996 or ’97, I bumped paths with the guys that founded eMusic, the first online digital music store. I worked with them doing content licensing. I’d call other record labels and negotiate with them to get the rights to sell their music online for pay downloads, MP3s for 99 cents. This was in ’96 and ’97 which predated Napster and iTunes.
MP3 music downloads weren’t readily available then.
It was being done by a very elite, techno crowd at the time, People didn’t really know what MP3s were.
eMusic launched as the music industry’s first online digital music store in 1998, and sold music from independent labels.
I was involved in launching that, and contributed to the original business plan. I licensed content and did the business development with them. I moved out west and worked with them for a year in San Francisco while continuing to co-run my label with Joel.
In 2000, I moved back to New York, and built up the label. In 2005, it was kind of going down. That really got me thinking of how I could stay involved in the music industry. Over the past 17 years, I had the fortune to release acts like, the Pixies, Frank Black, Echo and the Bunnymen, the Church, Apples In Stereo, Clem Snide, the Boo Radleys, Ron Sexsmith, and By Divine Right. We had over 200 releases.
Why did spinArt fold?
We weren’t making enough money. People weren’t buying the music that we were releasing. It’s that simple. We just never had a hit. It was a great label. I loved every record we put out. But unfortunately, we never had an artist that sold a lot of music.
spinArt operated very much as a grassroots, independent label. You didn’t have exclusive deals with artists. They could leave at any point.
Well, they could. There weren’t multiple options usually for futures (rights). We did 50/50 net profit split deals. We didn’t control the masters and the artists always made more money than we did.
How did you finance the launch of TuneCore?
I had been in such significant debt with the demise of spinArt. Credit cards and all. God, that sucked. It sucked hard. But myself, and my friends Gary Burke (Chief Technology Officer) and Peter Wells (SVP Operations, Customer Advocate) worked together at eMusic and we pooled our money, asked friends and relatives, and launched TuneCore off of that.
Musical instrument retailer Guitar Centre is also an investor in TuneCore.
Once we launched, I cold-called Guitar Centre and, by pure luck, I talked with its CEO Marty Albertson. I met up with Marty at the West 14th Street Guitar Centre Store in New York. Ultimately, that ended with Guitar Centre investing and helping to grow TuneCore. I had figured that they had (access to) lots of musicians that would be interested in what we were doing, and the timing was right. They are a fantastic partner.
Here you are in debt, and needing a job; why start TuneCore after spinArt?
What happened is that before spinArt went down, I got approached by these new music distribution companies, which were just like the old (distributors). They said, “We’re going to distribute your music into the retail stores, and every time it sells we are going to take a percentage of the money.” The difference was that the retail stores were iTunes, and not Tower Records.
The era of Tower Records and music retail in the U.S. was coming to a close.
Yeah, it was. The internet grew as broadband grew and as hardware devices like the iPod came into the market and so forth. Ultimately, the (music) industry imploded on itself. Here I was in 2005, and the label was going out of business and I was trying to think how I could still have a career in the music business and what could I do?
Let me guess, the new music distribution companies wanted 15% to 30% of the gross sale?
That’s right. My response to them was, “Wait a second, you are not a physical distributor.” In the old days the physical distributor, in my opinion, earned their percentage of the sale because they did something. They fronted money, they worked for it blah, blah, blah. But in the digital world? “C’mon dude, you are moving a file from point A to point B. You are telling me that I am supposed to give you this amount of the revenue for the sale of the music? For doing what? You put a file onto Apple’s hard drive.”
You have been a vocal critic of the traditional digital distributor/aggregator model.
That’s why I started TuneCore. The label was going down, but (my decision) really was moral indignation with the (new distribution) model. It was morally wrong. I was like, “You are screwing people. I don’t think an artist should sign away to five year exclusivity to you, and give up 30% of the revenue of their music, simply because you are the guy with the golden ticket contract to Apple because Apple won’t do deals directly with artists. So you have the artists over a barrel, and you are going to screw them.”
I remember being on a panel with some guys from these new digital distributors before this went down, and I had this heated argument with them. I asked, “How do you justify the fact that I, as spinArt records, put out significant monies for the Dears to go on tour—fronted over $100,000 in co-op advertising, and begged, borrowed, pleaded and banged my head against the wall? We’re doing everything we can to break this band, to make them become more popular. Meanwhile, the Dears are sleeping on floors. And you tell me that you are going to take 30% of the revenue every time their music sells, because you have it on Apple’s hard drive?”
Is that why you developed the flat rate model for TuneCore?
Absolutely. I think it’s a valuable service. I think that you should pay for (distribution), but it should be equitable. It shouldn’t be, “I’m going to put you in iTunes; give me your rights; give me money every time your music sells; you have to let me be the person who collects it; and I am only going to pay you every 90 days, although I get paid every 30 days; and I’m only going to pay you if you have reached a minimum.” In all due respect, “Go fuck yourself.”
How does the flat rate service work?
Anyone who makes music or spoken word can go to TuneCore, and get access to distribution to iTunes and more. They upload the song, they upload the art, they pick the stores that they want (the music) to go into, and they pay a flat rate. It’s $9.99 (annually) for a single; and $49.99 (annually) for an album. That’s it. They get 100% of the revenue. (The agreement) is non-exclusive. They can cancel whenever they want. That’s the annual charge. There are other whistles and bells that come with it, but that’s the general thing.
With spinArt, you were selling physical product at a time when physical distribution was under enormous stress.
It was predominantly physical, until near the end. spinArt was the first label to put its catalog up online, and make it available for pay-downloaded MP3s.
Traditionally, if an artist wanted to have a career in the music industry, they had to get signed by a record label.
The reason for that was because the record label had a deal with a distributor. In the United States, you had three million square miles, and 10,000 plus physical music stores. You needed to have someone to pick up the phone and call these 10,000 retail stores, and then pick, pack and send out orders to the stores. You also needed people running around to those stores to convince the people that owned them to put your CD on the shelf.
If you were going to sell 100,000 copies of something (then), you had to manufacture at least 180,000 copies of it, and hope the hell it sold through because if it didn’t, you had to eat the costs of the manufacturing.
As an artist, if you wanted to have a career, you had to get signed to the label, and the label had distribution. As an artist, you just could not do distribution on your own. You didn’t have the infrastructure. Remember that anything shipped out could be returned at any point for a refund. So you needed a finance department to deal with credit terms, and everything that was returned either needed to be refurbished or destroyed. Then you have to buy your way into the shelf space at the store through advertising programs and so on.
If you really wanted a career, if you wanted the ability to be an Alanis Morissette, you had to be signed to a label, because you needed the distribution arm to get the product on the shelve, deal with all nuances of it, but you also needed the company to front the cost of manufacturing.
Labels also provided marketing sizzle for the music and the artist.
Sure, but that’s nothing to do with what the major labels were. The major labels were distributors. That’s what they were, and that’s what empowered them. Absolutely. The control of a major record company was about the distribution arm. That’s what market share is.
You have to concede they brought sizzle to the table.
Oh, absolutely. They provided marketing and helped to make the product. Columbia Records, in some ways, was a research and development arm of Sony Distribution. Columbia Records would identify, and create a new lemon-flavored Pepsi in the form of Mariah Carey. Then they would take Mariah Carey and they would help shape, develop and manufacture the product and give it to the distributor who would shove it out to the stores. Then Columbia’s marketing arm would attempt to get people to hear Mariah Carey’s music and hope that it caused a reaction. Yes, the major labels had access to the media outlets but, first and foremost, they were and are distributors. The music industry, however you want to frame it, was (then) about (physical) distribution. That’s what they had the stranglehold over.
Any indie label or artist had to have a catalog. If the distributor or store didn’t need your next record, they wouldn’t always pay you.
That’s absolutely true. When I first started spinArt I remember chasing up a number of these smaller distributors. The indies were always about borrowing from Peter to pay Paul. Unless you had a hit, a massive hit, it was always borrowing here to pay there. You released the next (recording), and you took the money from that to pay off the older stuff. Fortunately, we got big enough with spinArt that we got into a deal with a reputable distribution arm. We worked with Caroline (Distribution), ultimately. Through the years we were with Caroline and then moved into ADA, and then over to Ryko Distribution.
What ended up happening is that the (multinationals) began to go after the independent market share, and they created their own independent distributors like ADA Distribution or Wasabi Group and so forth. Those entities were very reliable in paying, whereas the true independents like Dutch East India Distribution, I remember taking them to small claims court to get payment for the vinyl that they wouldn’t pay me on.
Couldn’t artists do distribution on a regional basis?
Doing it regionally was very limited, and very time-consuming. It wouldn’t have allowed you to have a career. The idea of being an active touring band while simultaneously calling a couple hundred stores regionally while picking and packing orders with invoices and then calling stores up to get paid wasn’t possible. Try to get paid by the distributor? Try to get paid by the retail store.
Many distributors didn’t work with small indie stores that were so important. Often, an indie label or indie band had to use several regional distributors.
Oh yeah, and there were one-stops (distributors), and they would mark up even more. Basically, you went through a middleman to a middleman to the store and the second middleman would jack up the price.
Under the traditional physical “pick, pack and ship” model, an artist needed a physical distributor which would then take a percentage of the money from the sales of the CDs.
If the album sold at Tower Records for $10, (the distributor) would take 25% of it and pocket $2.50 and give the remaining $7.50 to the label, and the label would kick back $1.40 to $1.70 to the artist. That was the economic food chain of the traditional music industry, more or less.
Digital distribution screwed all that up.
It did. The first major change was that you had unlimited shelf space where everything could be in stock with no detriment to anything else. In the old world, only so many records could fit on the shelves. If something was on the shelf, something was not. In the new world, everything could be on the shelf because it’s simply a hard drive. If you run out of room, you pop in another hard drive. So, you no longer have to fight for shelf space. It can just be available.
And the second major change that occurred was that you had unlimited inventory that would replicate on demand as a perfect digital copy. It would never run out and there were no upfront costs for it. So, if you have unlimited shelf space where everything can be in stock and have unlimited inventory that never runs out and no upfront costs, you just circumvented the traditional music industry. The traditional music industry is based on physical distribution. You no longer needed a pick, pack and ship warehouse.
What advice can you offer an artist considering putting their music with TuneCore?
We have a blog, blog.tunecore.com, with tons of information. We have a lot of PDF booklets that artists can download-—tips on putting their music online. We do market and promote but, honestly, their art has to cause a reaction.
Artist now have direct access to the media outlets. So number one, they should make a YouTube video. Even if it’s off of a cell phone or a camera or a Mac. Create a video, and upload it to YouTube. Video can be a very efficient way to drive notoriety and fame.
Number two, what is it that they want, and what are their goals? That’s really important. Once they determine what they want, they have to figure out the path of how to get there. Their path could be that they want to be Justin Bieber, and they can follow the Justin Bieber model. They can upload videos of themselves to YouTube and they can distribute a single or some songs into iTunes, and they can try to get on the eyes and radar of large media companies, like Disney or Universal, that are trying to find talent.
Liam Kyle Sullivan uploaded his video “Shoes” to YouTube and created this character, Kelly. He does quite well for himself off of that. He turned down many major label deals. He now tours nationally with sold out gigs, and he has created his own line of clothing
Boyce Avenue has created sizable interest through their postings on YouTube as well.
The brothers (Alejandro, Daniel and Fabian Manzano) began recording acoustic cover versions in their own way. They uploaded these videos to YouTube, and they began to get followers from that. Then they started doing their own original music, and have sold over a million songs. Universal Republic signed them (last year), but they were recently dropped, and they came back to TuneCore and now have their best selling album of all time. We’re talking hundreds of thousands of units in the past 30 to 45 days.
[Boyce Avenue is, in fact, an internet sensation. The Puerto Rican-American acoustic rock band was formed in 2004 by brothers Alejandro, Daniel and Fabian Manzano in Sarasota, Florida. In 2007, Boyce Avenue began posting videos on YouTube which now have reached a combined total of over 250 million views.
“Our second video was a Rihanna ‘Umbrella’ cover, and somehow that just took off for us,” recently explained Daniel Manzano. “But the biggest eye-opener for us was when we went to play four shows in the Philippines. We knew there was something there because we were getting a lot of comments in Tagalog on our videos, but we didn't know the scope of it. It was just insanity. That was the moment we realized it had gone international.”]
You are the guy who passed on signing both the Shins, and Spoon in the ‘90s.
What did that teach me? What I do know is what that taught me. People passed on signing the Beatles. What is good is subjectivity. (With TuneCore), I decided that I wanted to do one thing, and do it really well. That’s what we focus on. We do (distribution) better than anybody in the world, and I’m so proud of that.
The things that I say aren’t being said because I’m trying to drum up business for my company. It pisses me off when people think that. I passionately believe in what I’m saying—not that it makes me a buck. Technology has created a way for things to be available if people want to buy them. So, make them available. If you are a kid in the bedroom, and you write a song and you record it, why not put it on a hard drive somewhere? If someone is searching for it, they can find it. What’s the harm?
I will fight tooth-and-nail with anybody that states that there’s too much music in the marketplace, that artists aren’t selling, and that sales are down. That’s just wrong.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is co-author of the book “Music From Far And Wide: Celebrating 40 Years Of The Juno Awards.”
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