NAMM 2013 Bonus Interview – Michael Fitzpatrick of Fitz and The Tantrums
February 2013
Growth In Digital Sales Helps Music Business Post First Revenue Rise In 12 Years
Great news for the music business, as sales broke a 12-year losing streak in 2012, posting a 0.3 percent rise in revenues to $16.5 billion, reports REUTERS, based on figures from the INTERNATIONAL FEDERATION OF THE PHONOGRAPHIC INDUSTRY. It was digital sales that showed the most growth, and compensated for losses in physical revenues for the first time.
“At the beginning of the digital revolution it was a common theme to say digital is killing music,” said SONY MUSIC ENTERTAINMENT Pres./International EDGAR BERGER to REUTERS. “Well the reality is, digital is saving music. I absolutely believe that this marks the start of a global growth story. The industry has every reason to be optimistic about its future.”
The IFPI figures showed digital sales were up 9% from 2011 to $5.6 billion. Those sales accounted for 34% of overall income for the music business. Download sales were up 12% percent to 4.3 billion units and digital album sales rose 17% to 207 million.
REUTERS noted, “subscription services such as SPOTIFY and DEEZER ‘came of age’ last year, according to the IFPI, and are expected to cross the 10% mark as a share of total digital music revenues for the first time. SPOTIFY has more than five million paying subscribers compared with three million at the end of 2011, and is the second largest source of digital music revenue in EUROPE. DEEZER has also expanded rapidly, reaching three million paying subscribers worldwide.”
WMG Head of Global Marketing STU BERGEN said, “Until recently, the vast majority of our revenues came from a handful of countries. Today, digital channels mean we can monetize markets worldwide much more effectively.”
“In great news for the music industry, the IFPI has announced that global music revenues increased in 2012 for the first time since 1999 NARM Pres.Jim Donio said in a statement. “While the overall 0.3% rise was modest, it was fueled in part by a 9% jump on the digital side, an exciting development that bodes well for the future. The year also saw a significant expansion of subscription and streaming models, with a 40% rise in the number of fee-paying customers. We have now had a full year to measure the impact of these services such as SPOTIFY, RDIO, and more in the U.S., and they are expected to account for more than 10% of total digital revenues worldwide for the first time. We have now recorded a year of sales growth in 2011 and a year of revenue growth in 2012, and with Nielsen predicting that sales will remain more or less stable over the coming years, this is a good indicator of the industry’s global health.” [AllAccess]
Music Video Strategies For Promotion And Monetization
Caroline Bottomley from Radar Music Videos recently chaired a panel at the legendary music industry conference Midem. Top industry professionals discussed strategies for promoting and making money from your videos and here are some of the top tips they shared.
The importance of YouTube
Having your video on YouTube is essential for musicians:
availability (YouTube is the primary search tool for music). shareability (it’s easy to share and embed from YouTube). monetisable streams (YouTube LOVE music videos and encourage partnerships with labels and artists). statistics (radio decisions re playlisting are commonly based on YouTube stats).How to become a YouTube partner
YouTube are making it increasingly easy to become a partner, which means you can earn money from your video views. (YouTube Partners)
Partnership also improves search rankings for videos in your channel.
There’s a myth you need to have over 100,000 views to become eligible – not true.
YouTube want more quality music content in the partnership scheme, so get registered.
A YouTube Don’t
Don’t split views. Upload the video to the artist channel and favourite in the label channel. Favouriting means the video will show up on the label channel, but the views all aggregate on the artist’ copy.
Pros and Cons of Monetised Ads
You earn money, versus monetised videos can be less viral – artists and sometimes fans hate ads. Sharing is often the most important metric for a video, above and beyond monetisation.
Two kinds of ad: 30 sec pre-roll, very intrusive but high earning and 5 sec skippable banners.
Infectious Music don’t run ads for the first two weeks of a new artist’s campaign – they consider ads can be THAT off-putting to fans of new acts.
Monetised videos become unavailable to German and Chinese fans, due to lack of licensing agreements in those territories.
The Pros of VEVO
The biggest global network dedicated to music visuals.
Improved recommendation to viewers – who stay longer and watch more.
Higher earnings for partners.
They will do special promotion projects with the right partners.
They like independent artists, there are many ways for independent artists to get onto VEVO, eg via The Orchard.
The Cons of VEVO
You have to upload a new master file, so you’re splitting views across YouTube and VEVO.
The ads are the more intrusive type ads.
You can’t opt out of ad type, eg you can’t opt out of alcohol ads.
VEVO works better for some kinds of artists than others.
Packshot and Lyric Videos
It’s useful to have all your tracks on YouTube – if you don’t then someone else will.
Packshot videos are quickest and cheapest way to do this. If quality content is important, lyric videos are a good solution.
Always service a video when you’re going to radio.
UGC User Generated Content
Various responses exist for YouTube partners; Don’t allow, which serves up a stern looking message. Allow but monetise, which takes away some creative control.
Video for Promotion and Discovery
Channels such as Balcony TV can deliver an audience, but don’t yet deliver monetisation. Very useful for new artists, where growing a fan base is more relevant than monetising views.
Buying Ads for Promotion and Discovery
Link your Google adwords account to your YouTube channel and buy retargeting ads. This allows you to serve relevant ads to people who have already visited your channel. It can be a highly effective way to build views and channel subscribers.
Subscribers are extremely valuable – every time you serve a new video you can send a bespoke message to subscribers’ inboxes.
The Top Industry Professionals on the panel are:
Eric McKay, Business Development VEVO
Connie Meade, Label Manager, Infectious Music
Stephen O’Regan, Founder, Balcony TV
Patrick Ross, Label Services, Kobalt
Caroline Bottomley is Managing Director of the Radar Music Videos network.
Rodney Jerkins in BMI’s Behind the Song
From BMI’s Behind the Song This series offers advice, insight and knowledge of challenges and successes from top songwriters and producers. These creators discuss how they see themselves as a songwriter and/or producer; their distinct approaches to songwriting and producing; and advice on getting into the music industry.
In the episode: Rodney Jerkins. A wildly successful producer/songwriter/musician, Rodney Jerkins is admired both for his star-making vision and impressive career longevity. Jerkins’ discography is a who’s who of musical royalty: Mary J. Blige, Beyoncé, Madonna, Brandy, Jennifer Lopez, Michael Jackson, Whitney Houston, Britney Spears, Cher, Janet Jackson, Gwen Stefani, Jamie Foxx, Black Eyed Peas and countless others. His production contributions have garnered over 160 million in record sales worldwide.