Act 2 Records Blog

The Value Of Music Part II

2008-07-21T15:27:00.005-04:00

After a brief 5 1/2 month hiatus I'm back with my blog. My apologies.

I've really been busy working on some neat stuff. So unfortunately this blog is short and contains shameless promotion, but hey that's my job.

At any rate, here's some links to our Press Release entitled: "New Web Site Shakes Up Music Industry"

PRWeb Site

I think it's pretty interesting, but of course I'm biased.

Please let me know if you have any suggestions or comments.

RAH

The Value of Music (Part I)

2008-02-05T10:32:00.001-05:00

This is the big question these days. Clearly music has value, but how do we evaluate this?

In a traditional sense, one could measure value by its’ price elasticity. Essentially, what one is willing to pay for a song or group of songs.

In the old days (the 1970’s), I could buy a single (a 45 record) for a little over $1. If adjusted for inflation, that would mean today a single would cost around $6, (assuming constant demand and costs.) Well, I would make the argument that clearly there have been cost reductions in the past 30 years that would justify a lower cost product. Obviously the trend from vinyl to cd benefited both the consumer and manufacturer by providing a purer sounding product and reduced manufacturing costs to Labels (once economies of scale were achieved). And for awhile both benefited as margins remained fairly constant during the first 10 years or so of the cds’ existence.

However, thereafter major economies of scale were achieved by the Labels with great cost reductions just about across the board, yet there were no savings passed on to the consumer. During this period (approximately 1990-2000) both the major labels and major independent labels were making significant profits on successful projects. But keep in mind, that only one in ten projects are successful. The real cash cow for the majors were their distribution companies. They would charge approximately 20% for their services, and that of course would be added onto the price. Other things, like retailers charging for listening stations and shelf space would also add costs to the product without adding any additional value. So this is how we got to the $16.95 priced CD.

I think consumers were okay with this for awhile, (assuming the CD contained let’s say 3 hit songs out of the 14 or so). Yet as CD storage and transfer came available to everyone, people realized that blank CD’s don’t cost that much and people started to wonder why music cd’s were so much higher. Further, less quality projects would often be promoted to the consumer where there was only one really good song on the project. All these things combined to lead to what I like to call a consumer backlash. People felt like they were being ripped off (whether it’s true or not), it’s their perception.

So with the technology of the Internet this lead to file sharing and peer to peer networks. Even though I believe most people realized what they were doing was wrong (if not illegal), through perceived anonymity, people felt it was okay to download music in this manner since they were overpaying for so long. And who’s it going to hurt, just the big fat record labels.

Well, right idea, wrong reason. Getting back to the value concept. Clearly $16.95 for a CD with one good song on it, is too much. Even if there’s 20 songs on the CD, if the consumer only likes one, they feel like they’re paying $16.95 for one song.

So are .99 cent downloads the answer? Does that reflect the true value of music? Again, I would argue no, but for different reasons to be discussed in Part II next week.

As always, if you found this Blog helpful, informative or entertaining, help support Independent music and visit our websites: Act 2 Records and Mp3 Music Store

All the best,

RAH

Stuff On My Mind

2008-01-28T22:30:00.000-05:00

I was going to talk about the value of music. But as I started to write, it got way too cerebral and I even bored myself.

So I decided to just write about some stuff on my mind. So here’s some stuff I’m not too crazy about.

1. Priority Mail

Clearly Priority Mail is NOT the post office’s priority. For some reason, it is far less reliable than regular first class mail, and it costs a lot more. I’ve even asked the Post Office about it, and they just kinda shrug their shoulders and reluctantly agree. And don’t bother with delivery confirmation, because the only thing it confirms is they don’t know where your package is.

As long as I’m talking about the post office. Has anything good ever arrived via certified mail? If you send us a demo cd this way, chances are, it’ll get special treatment, but not the type you were hoping for.

2. Myspace

I would compare myspace to an out of control kindergarten run by a spastic Big Brother. Dysfunction seems to thrive here. In the early stages, myspace was a terrific marketing tool. You could put together a simple web site at no charge and market yourself to others. A good concept, run amuck. As people started to use this tool, two things happened. One, myspace restricted people’s marketing efforts to the point where almost everyone is considered a spammer. And two, people who don’t know any programming have over utilized “pimpmysite” tools to create the largest collection of disorganized crap the world has ever seen! Myspace does have some value as a web host and marketing tool, but frankly, I’d rather stand in the airport security line than surf myspace.

3. Large Unsolicited e-mail files

You’d think this is obvious. But I’m always amazed at how inconsiderate people are. Because we’re listed in Billboard and a lot of other music directories we get a lot of unsolicited submissions. I’m actually glad about this, and hope people feel comfortable submitting their music to us. However, please be professional enough to send an e-mail with a link to your music. Most people abide by these basic internet etiquette guidelines. However, about once a month, I get sent a 5-10 mb file from someone I don’t know. Now if it was just one file, I could live with it. But without question, it always ends up that I get sent that same file at least 10-12 times. And of course, it’s always at the time that I’m awaiting an important e-mail from someone I actually know.

If you enjoy hate mail, this could be the marketing technique for you.

4. The Amtrak Acela

For those of you on the U.S. east coast, you probably are familiar with the Acela train. In theory, this is a faster train that will get you to your destination quicker. And in reality, this is true, but it’s for the wrong reasons. A few years ago, some genius at Amtrak convinced people to make what’s got to be 100’s of millions if not billions of $’s investment in these new fast trains called Acela. Now my understanding is these trains can go like 130 mph when the current train goes like 70-75 mph. The only problem is, you need what’s known as a seamless track for the train to achieve those speeds. Otherwise they go the same speed as regular trains. And guess what, in the US we don’t have seamless tracks, so these new trains go the same speed as the old ones! I sure hope someone lost their job.

So how is it that these trains get to their destination quicker. Well here, I have to give it up to Amtrak. Their marketing people figured out that for the business traveler going from DC to New York, every minute is valuable, and they would be willing to pay a premium to save those precious minutes. So they created a premium service utilizing these Acela trains to go from DC to NYC and back, and in order to maximize the time savings they just eliminated several stops on this service that would be normally included in the regular service.

So walah, problem solved sort-of. But for the money, if I've got some extra time, I'd rather take the slower train. They're actually more comfortable.

As always, if you found this Blog helpful, informative or entertaining, help support Independent music and visit our websites: Act 2 Records and Mp3 Music Store

All the best,

RAH

So You want to get a Record Deal?

2008-01-15T12:14:00.000-05:00

There’s no rulebook on how to get a record deal. However there are some things that Artists can do to help increase the likelihood of such a goal.

If you’re a new artist or more established artist, the name of the game is the same.

Promotion, Promotion, Promotion.

Yes, quality music counts. But when you get into the professional realm, just about everyone has quality music. And frankly, you can have the best music, production… in the world, but if no one knows about it, it’s unlikely you’re going to get signed.

So with that being said, the question remains, how do I promote myself? Well there are a few things that one can do to achieve some positive results.

Get a MySpace site (this is a start, I’d grade it overall about a C- as far as promotion goes – see Blog form 1/8/08).

However, the nice thing is, it gives you a free website and a spot to point people to, to hear your music.

Perform live as often as possible.

If you have to for free and it’s not going to cost you $’s out of pocket, then do it. Make sure you have pluggers, pamphlets…circulated so that people know where they can find your music. Also make sure to announce to people where they can find your music. This is a simple thing, but I’ve found so many artists forget this because of the high from the performance.

Get a Fan Club

Make sure you have some way of tracking people who are supporters of your music.

Create a Blog outside of Myspace.

Blog’s are wonderful tools to keep your current fan base informed and to obtain new fans. It’s important to create it outside of MySpace because it will increase your presence on Google and Yahoo. Again, you can reach a lot more people through the major search engines than just relying on MySpace’s internal marketing mechanisms.

Reach out to Record Labels.

Yes, you have to take the initiative. Often times a friendly e-mail requesting advice can pay dividends. If you’re sincere in looking for advice or information, often times small to mid sized labels like ourselves will look upon yourselves favorably and be more accessible. DO NOT SEND UNSOLICITED MP3’s as an attachment! In today’s environment, we have to assume it’s a virus and treat it as such. So, if you want to send your music, please send it as a link to your myspace site or other site. It’s also more professional and courteous.

Put your music out on as many free download site’s as possible.

This is a change for me. However, the name of the game is promotion. The more people who hear your music, the better off you will be. For example, on our download site Mp3 Music Store, some of our Artists get over 10,000 downloads a week. They’re being exposed to new people who have never heard their music before, and frankly that’s a good thing.

There’s a lot more, but I’ll save it for another Blog. And I know, there's nothing really new here.

But here’s the bottom line. If someone is actively promoting themselves and reaching an audience (via blogs, performances...) then it reduces the risk to the label, and makes the prospect more attractive!

And once you achieve that audience, you have to shout it out to the labels, and make sure they know about the buzz.

As always, if you found this Blog helpful, informative or entertaining, help support Independent music and visit our websites: Act 2 Records and Mp3 Music Store

All the best,

RAH

MySpace is My Headache

2008-01-08T15:53:00.001-05:00

This blog pretty much wrote itself.

Okay, so what’s wrong with MySpace?

Well, initially it was a great site to help promote your music and/or product/service. However with increasing popularity it has become too restrictive to use as a promotional tool. And let’s face it, that’s what most people were utilizing it for. I mean c’mon, who needs 10,000 “friends”?

But for a moment, let’s take away the promotion side, and evaluate MySpace as a conduit for New Artists. As a Record Executive, I feel I’m in a pretty strong position to comment on this.

First off, MysSpace takes forever to surf and it’s waaaay too slow. Further, it’s poorly organized for basic searches. For example, if I wanted to do a search for “dance music”, I can do it, but it will only display people with “dance” in their screen name. And frankly, who has the foresight to include “dance” in their title name when signing up. Further, if you’re known by your artist name, like our artist “Ohsha Kai” you’re going to use that for your title name, and unfortunately no one’s going to find you in a search unless they know you already.

Another problem is that people have too much stuff on their site. If it takes more than 10 seconds to load, chances are I’m moving on. And please get rid of all the “pimpmyspace” stuff. It’s all distracting, annoying and slow. The more stuff there is, the less likely I’m going to see anything that really matters, which is your music. It’s the old KISS rule (keep it simple stupid).

Now let’s talk about sending a message. If you don’t know the person, it’s almost impossible to send a message without it being flagged as SPAM. And furthermore, receiving messages on myspace is a major pain in the butt. You get a notice that there’s mail in your e-mail software (Outlook, Entourage…), and you have to stop whatever you’re doing to retrieve the message on this slow server.

Regarding MySpace for promotion, like I said, it did have it’s time. But now you can’t do anything without being considered a spammer. I feel like I’m in Kindergarten again! You can’t do this, you can’t do that…

I certainly have no agenda here, and don’t by default recommend other social networks (I’m sure they’re a pain in the butt too). I just thought it worth pointing out that ironically MySpace is NOT a good place to PROMOTE yourself. It is good as a free website. However, I would utilize other promotional tools (such as creating your own Blog outside the myspace network) and point it to your myspace site. Bottom line, you can reach a lot more people thru Yahoo, Google and MSN than thru myspace, and they’ll be a lot less frustrated when they actually do find you.

Hope you found this informative. If you did, please help support Independent Music at our Label’s website, Act2records.com. And check out our Mp3 Music Store. There’s a lot of great music and free downloads too!

All the best,

RAH

ps if you want to receive notices of our new Blogs, just click on the Subscribe to: Posts (Atom) link below. I don't know why it says Posts (Atom), but it let's you subscribe to our blog. Or you can just click on one of the Bookmark Buttons to add to your social bookmarks.

The Economics of The Music Business

2008-01-01T08:47:00.001-05:00

This is a tuff one! The industry’s based on an Economic Model from about 40 years ago, and it’s kinda broken.

New technology (ie digital downloads, I-pod, cell phones…) has made it easier for people to listen to music, and subsequently they have changed their buying and listening habits. People are not going to pay $16 for a CD when they can access the exact music they want, in the format they want , immediately, for .99 cents. And obviously this makes it tuff for any Industry when their per unit revenue goes from $10 to $.70.

There are opportunities for us in this new world order, but I thought it would be worthwhile to discuss a little about how the existing business model works.

I tried to search the Internet for a good article describing this, however unfortunately I couldn’t find one (probably because no one understands the current system).

Basically there’s 6 parties: The Record Label, The Distributor (digital & physical), The Artist/Group, The Writer/s, The Producer, and the publisher. But for today, we’ll keep it simple and just concentrate on The Artist and The Label.

Here’s how things work. Basically the Label engages The Artist to produce recorded music for them. For this, the Artist generally receives an advance and a royalty on future sales. The advance is non-refundable but recoupable. What this means is, that if the project tanks, the artist doesn’t have to give the money back. However, the recoupable part means that the Label has to “recoup” its’ investment before royalties will be paid.

Now when The Artist finishes the project they give it to The Label. The Label in turn is responsible for the manufacturing and the promotion of the project. The manufacturing these days is not a big expense (with downloads being so prevalent and the relative low cost of cd’s). However, the promotion is everything! Typically, promotion is going to be the costs associated with “promoting” the project. Sounds simple, but really it’s not.

Much of our Label’s promotion expense comes from paying Independent Promoters. These are people hired to get your music on the charts and on the radio. Typically, for a mid-sized Label like Act 2, we engage 3 different promoters to work a new song. We have a Billboard promoter, a radio promoter, and a mix show promoter. With out going into too much detail, this is a very costly process, and there’s no guarantee that your investment will achieve the desired result.

Other promotion expenses may include, but are not limited to:

Remix Expenses (see previous Blog)
Advertising Expenses (TV, radio, print, internet…)
Tour Supprt (for a new group or artist)
PR
Entertainment Expenses (no comment)

Record Labels make these investments in an environment where 90% of the projects lose money, and they’re absorbing 100% of the financial risk.

An analogy might be to ask. Would you go to a Casino and gamble if you only had a 10% chance of winning? I think the answer’s pretty obvious.

So us Record Executives, are not the brightest, (cuz we answered yes to the above question). But you have to give us a little credit for trying to create quality music in a very difficult business environment.

Hope you found this informative. If you did, please help support Independent Music at our Label’s website, Act2records.com. And check out our Mp3 Music Store. There’s a lot of great music and free downloads too!

All the best,

RAH

Remix Madness

2007-12-18T01:51:00.000-05:00

(This is a new Pop Production (Not a remix) of the Journey classic - release date 1/1/08 - Click the Play Button to hear a 30 second clip)

Okay. This is Blog #2, which is about music remixes. For those of you who aren't familiar with what a remix is, here's the quick 411. Essentially, a remix is a different version of the same song. What we do is use the same vocals from the original song and put another beat underneath it. Here's a couple of examples, I'll be using Rachel Panay's new single "Got To Be Love" for the comparison: Here's the original version.

It sounds a little like "Tequila", reminds me of the Pee Wee Herman song, (not exactly the sound we were going for.) So we hire a producer and/or DJ/remixer to do a remix of the song. This first version is Producer Lenny B's remix and is tailored towards radio (ie a more commercial sound), Remix #1. I hope you hear the difference, the song flows much better, and personally I like this version a lot. The next version is called a Tribal remix, and it's designed to be played in large dance clubs, Remix #2. This is generally an extended version (ie longer version like 6:00-8:00 minutes). Not my favorite (meaning the style-because the quality is high), but it definitely serves a market and a purpose. Think big speakers, big bass, sweating bodies and you get the picture.

Now it's time for my main point. I can understand doing maybe 2-3 remixes for a particular song. However, the current trend is to do anywhere from 12-20 remixes of one song. Why?!!! I guess the logic is the more types of mixes, the more people it will appeal to. That's crazy, because they only play one version on the radio. If you really need 12 remixes of a song, I truly believe you need a new song.

A lot of these remixes are done to gain favor with certain DJ's, (ie if the DJ does a remix he's more likely to support the project - to Billboard...) Don't forget, these guys get paid for doing remixes. And almost all of these remixes are only for promotional purposes, not commercial release. What's that tell you.

So what have we learned. I'm not sure. I think I confused myself. But I do know that I'm no longer producing one song with 12 remixes. It's just not practical and you can't please everyone. So from now on, it's one song and 3-4 remixes and that's it. My Billboard promoter just keeled over, but I guess he's just going to have to work a little harder.

By the way, you can listen to our releases at: Mp3 Music Store.

That's all for now.

I hope everyone has a Happy Holiday Season!

RAH

Ps, If you like this Blog or my previous one please feel free to forward to a friend, acquaintance, lover, gay lover, person you hate who keeps spamming you, the poor russian woman who needs money, and anyone else you can think of.

I don't know

2007-12-11T05:39:00.000-05:00

What's a blog? I was just trying to figure out how to put ads on my website and I got here. Oh well, might as well have fun with it.

Let's see. I own an independent record label, called Act 2 Records. We're really a great label, with great music. Unfortunately, it's not the best time to be in the Music Business. When your product that you slaved over, is priced less than a can of soda, you know you got problems. I know, it wasn't fair to pay $16 for an album that only had one good song on it. I get it, unfortunately I wasn't a part of the greed from the Major Labels and Distributors.

But, I'm still proud of the music we've produced, and hope people can enjoy it from our new music store, located at: Act 2 Records Online
Just a little shameless promotion here. I'm hoping to make most of the music available for free. Right now singles are priced at .85 cents and albums at $5.95. Obviously we don't make any money on the singles, (believe it or not the breakeven price in the industry is around $1.40 when you include promotion (which is everything)). Not sure about the punctution there. At any rate, if you download an album with 16 songs it's only .37 cents a song. But I'm not counting on that. Like I said, I'm trying to get to the point where I can provide most of our music at not charge.

Currently there's about 10-12 free downloads available. Totally legal, no mp3 protection encoding, and no membership required. The only thing I would ask, is if you're satisfied, to click on one of the ad sponsors, that should buy me a cup of coffee, and would be much appreciated.

I hope I didn't bore you too much.

In the future, I think I'll post some dirty little secrets about the music business (if you can call it that)

In the meantime, I hope everyone's having a great holiday season, and if you get a chance, download some of our freebies.

All the best,

RAH (those are my initials)

ps I can't believe I had to edit this in html so it would read cleanly. (I'm a big believer in spacing paragraphs out so they are easier to read).