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VOL. 125 | NO. 76 | Tuesday, April 20, 2010

Getting Creative

Event nudges musicians to think in biz terms

JOE BOONE | Special to The Daily News

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Mark Montgomery urged musicians to cultivate their capitalist sides at the recent “Memphis GRAMMY GPS: A Roadmap For Today’s Music Biz.”

The event is one of the educational programs hosted by the Recording Academy Memphis Chapter. It was held Friday at the new Playhouse on the Square.

“You are in the business of exploiting a product,” said Montgomery, the entrepreneur in residence at Claritas Capital, a venture capital firm.

“I encourage you to detach from the art and to think about the art of the business.”

An important caveat: “You can’t suck. And you better bring it live.”

Montgomery’s keynote address outlined a new way of thinking for musicians who face an economic sector in turmoil.

The traditional music industry’s financial and distribution systems have collapsed.

Artists are saddled not only with the costs of production and promotion, but go without the expertise that labels once contributed. People who dedicate themselves to a craft are often left tragically ignorant of basic business fundamentals.

Musicians and producers spent Friday afternoon hearing advice from industry experts.

“The days of creating something and handing it over to someone else to exploit are over,” Montgomery said.

Montgomery outlined a strategy in which a musician is not only leveraging social media, but reacting to response. It is not enough to have a Web presence. Artists need a managed relationship with their audience.

Montgomery urged performers to get e-mail with ZIP codes and to use Facebook for location targeting. If the audience is growing, he said, then the artist has leverage in seeking partnerships with labels and distributors.

“You want to be in a position of strength,” said Montgomery. “You need to be able to say, ‘I figured out how this works. Do you want to partner with me?’”

Other panels included business topics such as licensing and distribution.

As CD sales decline and pricing vexes download sales, licensing music for film and television has become a more important source of revenue.

Without label support, artists seeking licensing deals find themselves in a confusing morass of copyright law and Byzantine payment structures.

Academy president Scott Bomar presided over the panel titled “What’s Your Music Worth To You? Music Licensing For A New Era” presented by the Memphis Music Foundation.

“It’s always changing,” said David Preston, vice president of writer relations for BMI.

BMI is a performance rights organization, which collects royalties for copyright holders.

Tonya Butler, an entertainment attorney at Wyatt, Tarrant & Combs LLP and assistant professor of music business at the University of Memphis, drove home an important point that there are two parts of a song: the composition and the recording.

Butler exhorted musicians to own both respective sync and master licenses, as this facilitates the process for producers.

“Stay independent as long as you can. We are in the middle of what will be the next Renaissance.”

– Mark Montgomery, Claritas Capital entrepreneur in residence

“We have to license our music very quickly,” said Randy Wachtler, president of 615 Music, a music production company that has more than 30,000 tracks. “We don’t see it slowing down any time soon.”

Another panel, “Supply And Demand: The Basics Of Distribution,” focused on getting recordings sold in this chaotic environment.

While artists can establish a digital presence, it is another matter to turn that into sales. Various companies offer services that get music placed on iTunes, Amazon and Rhapsody.

Zac Ives of local independent store and label Goner Records outlined his company’s experience with digital distribution.

“We started out with CD Baby,” he said. “We had no idea what it would bring in. There was a $35 registration cost, but no monthly fee. But as we got bigger, we had more leverage.”

As artists develop quantifiable audiences and online sales, they can partner with firms designed to manage that digital experience. This is what Montgomery’s firm Echomusic did for major artists.

The centrally managed digital service is called a platform. When an artist hits scale, controlling his or her own platform is a new source of leverage that did not exist a decade ago.

“Stay independent as long as you can,” said an optimistic Montgomery.

“We are in the middle of what will be the next Renaissance. There is no brighter time for music.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 69 357 17,741
MORTGAGES 66 403 20,438
FORECLOSURE NOTICES 18 44 2,689
BUILDING PERMITS 208 696 36,641
BANKRUPTCIES 52 210 11,374
BUSINESS LICENSES 22 115 5,824
UTILITY CONNECTIONS 25 90 6,804
MARRIAGE LICENSES 21 107 4,023