Jim Markunas

Why Selling Records Is Like Picking Up Women, And How The Big 4 Failed

2009-08-08T00:36:00.000-07:00

Written By: Jim Markunas
Photo Credit: Brand X Pictures

Selling records, or any product for that matter, is a lot like picking up women. Women are smart. A lot smarter than us guys. They notice everything, and judge instantly based on how they're approached. Consumers are the same way, once you anger one of them, or one of their close friends, you've killed your chance of having any sort of relationship. Selling a lot of records is comparable to you and your cool friends hooking up with a lot of hot women on a consistent basis. You have something of value, therefore, that thing of value is in demand, and that demand leads to an increase in demand for not only your value, but the value of everything associated with you. The major labels used to be like that - men with high social value. They had a hot artist. That artist sold. The fact that their hot artist sold led to an increase in sales of all their other artists, and their friend's (i.e., other label's) artists. This phenomenon was extremely prevalent during the Hair Metal, Grunge, Rap, and Nu-Metal eras.

With that said, forcing a college student to pay hundreds of thousands of dollars for a commodity that's essentially been free since 2002 is inherently bad for business...

Try publicly embarrassing a hot woman in a crowded bar in front of all her friends, better yet, try telling her she's fat and ugly on national television. Not only will she A. not have sex with you, but B. all her friends and every woman in ear shot will not have sex with you for the mere fact that you've exposed your inherently low social value. This very public lawsuit between the RIAA and Joel Tenebaum is comparable to the previous scenario. The big 4, in a matter of 6 weeks, have completely destroyed the social value they spent 50 years building. They ruined a young kid's life for no apparent reason other than that they felt the insecure need to publicly flex their faux machismo. Just as putting up a bad front doesn't get one laid, it also fails to sell records. Would you get into bed with someone that sued you? How about someone that sued one of your friends? I didn't think so!

What we have is a PR nightmare for the music industry. A lot of music biz pundits have been saying the same thing I'm about to tell you here over and over since 2002, so... I'm going to kick the facts in a non-conventional way that we can all relate to: Whenever the word "women" is used, replace it with "consumers." Whenever the words "male" or "man" are used, replace it with the word "label." Lastly, whenever any word relating to intercourse is used, replace it with the phrase "selling records."

Women Hate Beta Males - Beta males are men who are not dominant, alpha, or leaders of men, but rather lower value males who go along with "group think." The RIAA and its affiliated labels have suddenly transformed from alpha males, with high social value, to lower-value beta males; metaphorically speaking. They've exposed their lower value by picking on someone powerless. Bullying is beta male behavior, and beta males rarely score with hot women, just like record labels rarely sell records (i.e., score) these days.

Women Hate Insecure Men - You've seen them... They drive Porsches and lead off every conversation with women with something along the lines of "Let me buy you a drink. I'm rich, you know? See that Porsche? It's mine... I'm also the vice president of a label, I hung out with Michael Jackson all the time in the 80s. I own WMG stock, but I sold it for a lot of money." Underneath all the hype, they're insecure and lack confidence. Men with high value never talk about how important they are in such a blatant manner, as this type of behavior exposes low social value. Men with high value let their confidence shine through silently. Back in the early 90s, Geffen didn't sue people for copying Nirvana tapes for their friends; they let their hot artist do their thing - Geffen and Nirvana had social value and acted accordingly. Therefore, they scored!

Women Hate Jealous Men - Jealous men will become irate when their actions don't lead to getting what they want. They'll pick fights, call incessantly, bully, and act petty when rejected by women. Jealous behavior stems from insecurity caused by past rejection and perceived future rejection. For example, a man meets a girl and they hit it off. After a few weeks, she becomes his girlfriend. One night, the man's girlfriend doesn't call. He sends her a nebulous text, "Hey," the text says, "What R U up to?" No response. The man, not liking to be ignored, sends another text 5 minutes later, "Are you busy?" Again, no response.

After stewing and worrying that his girlfriend is on a date with another man, the man sends yet another text, "Call me," it begins, "I really want to talk to you." Once again, the text is met with silence. The man is furious, his next text is something along the lines of "Why R U not texting me back? Are you mad?" Again, the text is ignored. The man flies into a rage. "How can she ignore me like this?" the man asks himself, "I'm a good boyfriend, why is she ignoring me?" In a rage, the man makes a critical error... He sends his girlfriend the 'ultimatum' text. "If you don't call me in 5 minutes, I'm breaking up with you!" Mellodramatic? Yes! Because the reason the girlfriend wasn't texting back because she had to work late and had innocently left her cell in her car after lunch.

The girlfriend, of course, is disturbed by the man's behavior. She finally calls, only to break up with him for acting crazy. The man becomes irate. He'll show her! He logs on Ping.fm (hopefully you read my last article), and proceeds to write a nasty blog about how mad he is at his "awful" ex-girlfriend. He then hits Twitter, sending a series of angry tweets, "My GF Sux," "She's a SLT," "F that stupid B." This behavior manages to further alienate his ex-girlfriend, eliminating his chance to hook back up with her. Suing your own customer is basically the same thing. Back in the early 90s, labels didn't publicly embarrass their consumers for not sucking up to them. In the pre-digital age, labels respected their own vibe. They had high social value, therefore they scored!

Women Hate Men That Don't Understand Women - A man's girlfriend says to him, "My birthday is this weekend, but you don't have to plan anything special." The man silently agrees, and fails to plan anything for his girlfriend's birthday. He doesn't even buy her a card or send her a "happy birthday" text. The girlfriend, realizing that her man didn't pick up on the fact that she did in fact want her birthday acknowledged, becomes irate (and rightly so!) She breaks up with the man the next day, leaving him in a stunned disbelief. The moral of the story is that one must understand one's consumer. Any market research expert will tell you, "Don't look at what your consumer says, look at what they do." Labels have failed to follow this advice for the last decade. Back in the pre-digital era, labels understood what their consumers wanted and gave it to them in many ways (no pun intended). Understanding their target gave them high social value, therefore they scored!

Labels, if you want to score (i.e., win back your social value), you have to start thinking about how to improve your value in the long term. Take a yoga class, come up with a new business model, eat healthier, and most of all, don't act like a jealous, overly-macho beta male in a public forum.

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Sam Sparro, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development. He's a free agent available for hire.

Find Jim Online: Twitter - Linkedin - Facebook - Website - E-mail Jim

Integration Is The Future Of The Music Business

2009-06-22T00:32:00.000-07:00

Written By: Jim Markunas

Why did our parents listen to radio? Back in the day when radio was worth a damn it offered portability, and more importantly, integration. When our parents (and also most label execs) were young, you only had records; big, hard, non-portable vinyl discs that required a giant machine called a "hi-fi." (See picture.) This of course begged the question, "How am I supposed to listen to my albums in my sweet '57 Chevy?"

Radio was the solution! Stations compiled best-of mixes of current music and offered portability that records couldn't offer. In the 50's and 60's, radio was the wave of the future. Nowadays, the need for integration is even more present, yet radio is not a necessity thanks to the internet. However, this article isn't about radio! I'd like to discus media that actually has a long term future.

In today's climate in which music has become a commodity, integration is king. Power and fame goes to the band or label who can effectively integrate their music across multiple platforms. In a niché sense, Disney is absolutely genius when it comes to this concept. If you look at Hannah Montana/Miley Cyrus, the first thing you'll notice is that she and her music are absolutely everywhere. Unfortunately, WDR's approach to marketing Hannah Montana really only works for the Children/Tween markets.

In order to break an adult band or artist in the present, said artist has to be everywhere, has to be there effectively, and most importantly, has to know how to monetize. Bands not only have to have a presence on iTunes, Myspace, Facebook, Twitter, iLike, etc., but they also have to integrate said presence effectively.

What's the point to having 3 million friends on Myspace if those friends don't translate into dollars or concert tickets? This is why integration is important.

Take my heroes, the Deftones. If you go to Deftones.com and look to the top left, you'll notice there's links to their Myspace, Facebook, iLike, Twitter, iTunes, and Youtube profiles. If you check out their Myspace profile, you'll notice that the Deftones have included their discography on the left and links to buy each release from iTunes and/or Best Buy. You'll also notice that if you click on the iTunes link, it pops right to the Deftones' iTunes store (ditto for Best Buy).

You'll also notice that all of their social media and sales profiles are integrated. The Deftones are everywhere they need to be, and they're where they need to be in an effective manner. Furthermore, they've integrated al their "Tweets" in the right column with concert dates and links to buy tickets via iLike. All they're missing is advertising!!

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Sam Sparro, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development. He's a free agent available for hire.

Find Jim Online: Twitter - Linkedin - Facebook - Website - E-mail Jim

5 Minute Social Media For Bands And Labels

2009-05-28T09:45:00.000-07:00

**Readers!!! Today's post is interactive. I'm going to teach you how to manage multiple social media profiles for labels and artists. Your mission, should you choose to accept it, is to follow my links and instructions.... I promise there's a pay-off!

I can tell you for a fact that one can and should effectively have and manage as many social media sites as possible. A lot of industry peeps and bands have complained that there's too many social media sites and not enough time to effectively manage them all.

A main staple of my New Media Plan is effectively managing social media in a span of 5 minutes. Yes... 5 minutes.

For this exercise, you'll need profiles on Ping.fm, Twitter, Myspace, and Facebook. Follow the links above if you aren't on the aforementioned sites.

First let's discuss Ping.fm. Ping is a brilliant and revolutionary site! Everyone in new media and otherwise should be a member. Ping.fm gives users the ability to manage 30 or so social media sites from one place (or in my case via text message). With the click of a button labels and artists can post news and links all across the internet.

Most importantly, one post can simultaneously update your website (provided you were smart enough to embed an RSS feed), your Myspace blog, Facebook status/news, and your Twitter updates.

Now that you've gotten all your profiles in order. Go to Ping.fm and log in.

You should find yourself in the "Dashboard section. Go to the middle of the page and click on "Add More Networks."

We'll start with Twitter. Find the Twitter icon, and click "Add Network."

You'll be prompted to enter your username and password from Twitter.

Enter the login information, and select the appropriate boxes under the "Use For" section on the right. (Check whichever box or boxes you feel are appropriate.)

Repeat the process for Myspace, Facebook, and any other sites you happen to have profiles on.)

Now... you have 3 different social media profiles set up on Ping.fm. Great! I'm going to explain how to make it all work.

Option 1 - Using the Ping.fm site to update your profiles.

Go back to your Dashboard. You'll notice a giant white box. Click the drop down menu and select "Status Updates." Type a short messge and a link to a website (preferrably yours if you're an artist).

Viola! You've just updated your status on Facebook, Myspace, and Twitter.

It's also possible to update your blog using the "Blogs" option, your Myspace blog using the "Micro-Blogging" option, etc. The sky is the limit. Just be sure not to use the same update for "Statuses" and "Micro-Blogging."

Option 2 - Updating via text message, e-mail, iPhone or Blackberry.

Updating by E-mail

Quite the useful function if you're a publicist with a Blackberry or iPhone. You can write a blog article in full HTML and update your sites by sending a simple e-mail.

Each Ping.fm user is assigned a unique e-mail address to send updates to. To find yours go to your Dashboard and click on the "E-mail" link just below where it says "Services/Tools."

Updating by Text Message

If you're a band on the go and you want to be able to update your sites without being tied to one of those pesky laptops, this option is for you.

Go to your Dashboard and look for the "SMS/Text Messaging" link under the "Services/Tools" section. You'll be asked to enter your mobile phone number. Once you've entered the number and established your phone, save Ping.fm's posting number into your phone.

When the urge strikes, text the number your news, and it will update all your statuses.

Updating Via iPhone or Blackberry

Use the internet as you would on your computer.

Or... Get one of the apps found here.

Congratulations, readers! Go out and "network."

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Truckee Brothers, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development. He's a free agent available for hire.

Find Jim Online: Twitter - Linkedin - Facebook - Website - E-mail Jim

Can Internet Radio Save the Music Biz - Before We Kill It?

2009-05-21T15:40:00.000-07:00

Written By: Jim Markunas
Photo Credit: Dave Bradley

Every once in a great while a being comes along with a revolutionary idea. The idea itself is ahead of its time, but still exceptionally valid. The messenger of this idea is usually persecuted; 2,000 years ago, it was Jesus, 50 Years ago, it was Martin Luther King, and today... it's internet radio.

Internet radio may hold the key the music industry is looking for. Here are a few reasons:

F*@% The FCC!!! - You can do, say or play whatever you want on internet radio. This instantaneously solves the problem of marketing bands that aren't "radio friendly."

In the olden days of the music industry, a band recorded an album under the supervision of a producer and a staff A&R guy. The album was plucked of 1-4 "commercial-sounding" songs. Said singles were played in order of appearance ad nausea on terrestrial radio stations throughout the world. This over-saturation caused consumers to run out to the local Best Buy or Tower Records to buy the album containing said single, or a 3-track disc of said single. Voila! Everyone from The Beatles to Korn sold records this way.

The great bands that didn't have "radio friendly" songs were shelved, haphazardly thrown on the market, or in RARE instances... carried on without help from radio.

Sometimes, albums that would have been a huge hit were thrown by the wayside because radio said "No!"

Example: Nada Surf's sophomore album (would have been HUGE!!!), 311's "Music," God Lives Underwater's "Up Off The Floor," and especially Jimmy Eat World's "Bleed American" album (Passed on by Capitol/EMI and eventually released under Dreamworks/SKG under a self-titled guise to a multi-platinum success.)

Internet radio solves this dilemma, and in addition offers unique promotional opportunities. San Diego-rockers, Truckee Brothers released an internet radio exclusive MP3 in spring of 2007 not only to help the cause to save internet radio, but also because the song's title, "Mayday," could not be said on terrestrial radio.

Portability and Flexibility - Yes... We all know I'm a fan of the iPhone... Along with the rest of the world. This device has made internet radio all the more beneficial in the days of Apps. With the internet, listeners of internet radio aren't limited by range. Los Angeles' main internet radio stations, Kill Radio and Little Radio boast a global audience of thousands.

Famous radio stations across the pond, Virgin Radio and Capital FM, not only broadcast online, but have their own nifty little iPhone app. Pandora also has an app. Why listen to KROQ in the car and be subjected to the same Silversun Pickups song over and over for years when one can listen to anything they want on Pandora (Provided their car is iPod or Bluetooth enabled)?

Most importantly, there's a station out there for everybody! Like death metal? There's a station for you. Blues? Shoe-Gazer? Bird Sounds? There's a station for you too!

Affiliate Ads - Labels can align with stations to drive profits. Some stations have "click to buy" links, and further ad-sharing deals could be worked out to a mutually beneficial end.

The Hullabaloo Over Songwriters - Songwriter are emotional... That's why they write great songs. Nowadays, they're emotional about the fact that the internet has put them out of a job (And rightly so!)

When internet radio kills terrestrial radio, and it just may, it has the potential to become very profitable. These profits could be made to trickle down to songwriters, artists, and labels alike.

The Main Reason Every Label and Person Should Have Their Own Station - I can't think of any reason why one wouldn't have their own internet radio station.

Labels! Imagine a streaming station with thousands of listeners. You own the station, it plays exclusively your artists, and you sell ads. Smells suspiciously like money, doesn't it?

People! Rise up against those "evil" labels and play indie artists. This way, the old balance is restored and everyone's happy : )

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Truckee Brothers, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development. He's a free agent available for hire.

Find Jim Online: Twitter - Linkedin - Facebook - Website - E-mail Jim

Record Industry Loses $13 Billion

2009-05-14T16:26:00.000-07:00

Written By: Jim Markunas
Photo Credit: James Worrell

Not To Beat A Dead Horse, But...

They did a scientific study, and it turns out that prosecuting illegal P2P file swappers is bad for the music business as a whole.

Check out the article.

To further buttress my point, let's do a rough crunch of the numbers:

The Cost of Litigating P2P

* Staff Attorneys (Studio/Label) - $100,000 - $150,000 annually X 6 staffers X 4 labels = $2.4 M - $3.6M

* Bad Debt (As Reported in A Corporate Financial Report) - $1M per lawsuit X 6 = $6M

* Lost Record Sales - 690,000 songs per day, 250M songs per week, and 13B songs per year are downloaded illegally. This is a yearly loss of $13B.

Debt that is won in court is more often than not, unpaid by litigants (on the defendant end). However, this "income" will show up on a company's financial report. But... If the debt goes unpaid, it shows up on the annual report as a loss.

Per year, labels are losing (this is just a rough estimation) $14B on P2P lawsuits and illegal filesharing.

That's quite a loss!

Here's what would happen if labels stopped litigating and instead negotiated with ISP's for a $1 per month music fee

If the 1.6 billion internet users world wide were charged an extra $1 per month for internet access in return for unlimited music files the music industry could stand to make $19 billion annually.

Enough said.

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Truckee Brothers, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development. He's a free agent available for hire.

Find Jim Online: Twitter - Linkedin - Facebook - Website - E-mail Jim

Musicians - Maximize Your Digital Touring Income

2009-05-06T14:29:00.000-07:00

Written By: Jim Markunas
Photo Credit: Thomas Northcut

The revolution has come and gone, now it's time to talk about money. In this multi-part series, I'll be focusing on positive solutions to the music industry dilemma. My first discussion is how to maximize DIGITAL touring income.

"What's digital touring income?" you ask. Good question!

We're all familiar with traditional touring income, yes? (Band goes on tour, sells tickets to fans; said fans purchase tickets, money trickles to band, promoter, venue, label (if applicable under 360 deal), etc. Maybe said band also secures some sponsorship dollars from Vans or Winterfresh gum as well - This is how it's been done since the beginning of time, and the model still holds up today.

I'd like to discuss how the digital sphere plays into touring income.

Traditional New Media - In the internet age, the press has moved from print to online. New Media departments, in addition to securing band and record release write-ups on blogs, zines and social networks, are now able to post tour dates in real time with links to buy tickets from Ticketmaster. This has been going on since the inception of the artist website and is nothing new. It's effective (more so than sending fans to the venue to buy tickets) and makes ticket purchase easier on concert-goers.

How we can add to this...

New Spheres of income - What if tour dates could be further leveraged to generate digital income?

Bible-belt band, Hinder, came up with a physical way to leverage tour income - They record their live set from the venue's sound board and offer a free burned CD of the live show with purchase of their $15.00 UMG release. Brilliant! It's a "free" (but not really) give away that stimulates sales.

However... physical records are pretty much dead. Therefore, bands should use this same concept in a digitally appropriate way. Let's say Papa Roach decides to do the same thing:

They record their live set via the venue's soundboard; they've also brought with them a few computers with iPod docking stations. The deal then changes to: Fans purchase a digital download of P Roach's live performance for $10.00. The performance is put onto the fans iPod right then and there along with a free copy of "Metamorphosis."

Global Broadcast - What if I live in Guam and I want to see Papa Roach perform in Los Angeles? Better yet! What if I'm in Chicago and I want to see Papa Roach perform in Los Angeles?

I'm basically screwed unless I wanted to pay for plane tickets to L.A., hotel, and car rental fees. Bummer, right?

Picture this...

Papa Roach goes on tour, as usual, but PRoach Riot members (members of Papa Roach's fan club) have the option of purchasing what's called a "digital season pass" that allows them to see every Papa Roach concert appearance via the internet in a live and/or "on-demand" fashion.

This would be uber-cool on many levels! Imagine never missing a single show from your favorite artist; you would be in heaven. This transforms a local concert in Los Angeles to a global concert across the world. As an added bonus, this solution will enable labels and artists to squeeze yet more money from sold out concert dates.

Yes, this solution can significantly increase your profits bands and labels. You're very welcome!

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Truckee Brothers, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development. He's a free agent available for hire.

Find Jim Online: Twitter - Linkedin - Facebook - Website - E-mail Jim

Is A&R Still Necessary In Today's Music Industry?

2009-04-29T00:01:00.000-07:00

Written By: Jim Markunas
Photo Credit: Ryan McVay

In the olden days, A&R was king in the music industry. Young, hip guys in street clothes found the latest "big thing" in music. The A&R rep romanced said band, persuaded them to sign an exclusive contract (which still exists today), hand-picked tracks for placement on albums released by said band, and more importantly selected which tracks from the album were to be the "singles."

Said band's "singles" went on to get major radio play, the radio play led to press coverage and both the press coverage and radio play led to said band's albums selling off the shelves. It was a GREAT thing to have competent A&R reps with a "good ear" back in the hay days of the music biz when music was an art form above all else.

Then... CD burners happened... Then... Napster happened... Then... CD Baby happened. Nowadays, any band in existence can get their own high-level distribution deal for a mere $30. That's right, for $30, any band with songs committed to record can have their tracks and albums available everywhere from iTunes to Wal-Mart.com. In addition, consumers can get any song in existence for free on the internet.

The above set of phenomenon has led to the over-saturation and overt over-commercialism of music. Music, although still an art form is now more than ever a commodity; much like burnable DVDs and tulips.

This begs the question, "Is A&R still necessary in today's music industry?"

Before answering this dire rhetorical question, take into account the following factors:

1. A&R used to be about finding a great artist and picking great singles to drive record sales. Nowadays, records don't sell; it's now possible to have a No. 1 radio hit and a corresponding LP that sells a mere 35,000 copies. (Somewhere around 500,000 units is usually the break-even point for most standard recording agreements.)

2. Quality of songs were king and were the driving force behind record sales. Today, quantity of songs are king in the minds of consumers.

3. There were no shortage of bands chomping at the bit to be signed to a major label to be used as necessary. Here and now, bands like Clap Your Hands Say Yeah and Arcade Fire can sell out arenas and pressings of albums without the help of a major label. There's a famous industry anecdote in which CYHSY had meetings with several major labels and flatly refused to sign their contracts as the band felt the majors couldn't do anything for them that they hadn't already done for themselves - Prior to 2004 this was unheard of!

4. A&R reps were gate-keepers and taste-makers who filtered out the crap. Nowadays, consumers perform that very function on their own via Pirate Bay, Limewire and Myspace.

5. Quality of indie bands have increased, and industry standard sound quality of recorded music has decreased. Back in the day, not many bands could afford to spend $1,000 an hour on studio time, and no one had even heard of the iPod. Today, bands can record their own songs on Pro-Tools in their basements, and the iTunes generation is used to poor sound quality. (The MP3 is not nearly as rich as CD audio or even Vinyl, but kids and adults alike LOVE their iPods that contain low-quality MP4 files from the iTunes store.)

In the future, will labels be as willing to pay high A&R and artist advances? I can't say for sure. But... I can say that marketing and new media will always be necessary. In the near future, A&R as a whole may take a back seat as "eye-balls" and volumes of demographic information become the new king of the music industry.

Jim Markunas is a music industry futurist and editor-in-chief of Chicks With Guns Magazine. Jim has a decade of new media and music industry experience, he's run highly successful new media campaigns and has worked with James Brown, Miles Davis, The Walt Disney Company, Truckee Brothers, Mick Fleetwood, and Minty Fresh Records. Currently Jim's focus is monetization strategies for record labels and digital business development.

Find Jim Online:
Twitter - Linkedin - Facebook - Website - E-mail Jim

3 Reasons Why The Pirate Bay Trial Was A Loss For The Music Industry

2009-04-21T14:17:00.000-07:00

"So let me get this straight. The Pirate Bay shuts down and suddenly all its users go legit, stop trading and start buying the wares of the entertainment companies." - Bob Lefsetz

The music industry is the only industry in the world that is willing to take civil and legal action against its own consumers. Think about that for a moment... When was the last time GM or Apple Computer put you in jail?

Although piracy is wrong on a lot of levels, it simply cannot be stopped in a cost effective and/or mutually beneficial manner.

Here's why the Pirate Bay prosecution was yet another colossal failure for the music industry even though its being touted as a "victory."

1. "You'll Never Get Her Back on the Farm Once She's Been to Gay Paree"

The cat's been out of the bag for a while... As a consumer, you simply don't have to pay for music. Every song ever released is available on the internet for free in MP3 form. As an industry, we must come to the horrible realization (and really realize it) that most people aren't willing to pay $18.99 for something that they can get for free.

The music industry will never be able to get consumers to pay for music now that it's been free for the last 9 years. Sure... some albums sell, but those days are numbered.

2. Alienating One's Target Market is the Surest Way NOT to Sell a Product or Idea

People view record labels and music industry professionals as greedy and dishonest. This is a fact. It's brought on partly because of the way we've done business in the last 70 years, but mostly because we've resorted to suing college students, jailing talented computer programmers, and strong-arming universities across the US.

As an industry, we suck! We'll have to learn to "un-suck" in order to get things moving again. If we can win back public trust, we can turn a profit once more.

3. Touting Pirate Bay as a "Victory" Buys Into The Outdated Business Model of "Selling Records"

Yes, music industry, it was great when we had a physical product and people paid us handsomely for it, but those days are going the way of the dinosaur - If we don't start to explore new income streams as an industry we're going to be extinct faster than the dodo.

Suing pirates in a "whack-a-mole" fashion not only costs labels millions of dollars in legal fees and damages the reputation of the music biz as a whole, but also points our Tyrannosaurus Rex-like, single-pointed focus in a direction that's failing - towards the old business model!

If the music business' old business model was working, we wouldn't have to sue pirates, because we'd be too rich to care.

I hereby proclaim the album dead! Now what??

OBLIGATORY PLUG: Let's become too rich to care! Let's make filesharing work for the business instead of against it. E-mail me for an interview, and we can discuss how to make the music business work without selling records.

Retailers Shun The Music Industry?

2009-04-16T17:19:00.000-07:00

Written By: Jim Markunas

Photo Credit: Stephen St. John

"February 20, 2010, is the day the CD dies."

That's what Tunecore president, Jeff Price was quoted as saying in an interview with the SF Examiner.

The quote goes on to say, "This is going to be the last year where there's any form of significant revenue generated from CD sales. The majors are going to be able to keep Walmart and Borders and Best Buy and Barnes & Noble into stocking inventory through this last Christmas season, but after that, the floor space is going to shrink significantly, and CDs are gonna go.'"

There you have it! There's speculation that after the 2009 Christmas season, retailers may drop physical music merchandise (i.e., CDs) completely.

What does that mean for us as an industry?

CDs will eventually go the way of vinyl. They'll be collector's items at indie stores around the world. However, there's two fundamental problems:

1. Vinyl sales alone can't finance a whole industry, and the same will soon be true regarding compact discs.

2. In the not-so-distant future, all music will be free. Yes... this means traditional music sales will generate little to no revenue.

Taking these two factors into consideration, it's important for the music industry to explore alternate sources of revenue. The internet is a vast space with limitless financial possibilities. There are literally millions of ways to generate revenue online, and there's no reason we can't start to use a few of these fresh new revenue streams as an industry.

Key point to remember: Everything can be monetized on the internet if digital space is leveraged efficiently.

OBLIGATORY PLUG: If you like my style, and think I can benefit your company shoot me an e-mail to set up an interview.

3 Reasons Why Analytics Are Important For The Music Biz

2009-04-13T16:15:00.000-07:00

Written By: Jim Markunas

I'm not a fan of Michael Jackson... for several reasons (sorry). However... I LOVE Mr. Jackson's sales record for "Thriller." This landmark release sold 40 million copies worldwide, and is hailed as the best-selling album of all time.

I assume the album after "Thriller" didn't do as well because I'm not sure what the follow-up album was called. In my humble opinion, this phenomenon highlights the importance of analytics and direct marketing. I say this because the decade surrounding "Thriller" was a hot time period for Michael Jackson musically. I'm pretty sure the follow-up album for "Thriller" was just as good musically as its predecessor.

Now... Imagine if we had had the internet back in those days. What if Sony had utilized a collected database of Michael Jackson's 40 million fans to promote the next record?

Labels have the tendency to over-emphasize mass marketing when direct marketing could be our ticket out of our industry-wide slump. I'll tell you why:

1. Highly-Targeted Demographic Information is Worth a lot of $$$!

There are firms out there that will pay top dollar for the right detailed demographic information everyone from Proctor & Gamble to Live Nation.

That's a bold new revenue stream right there.

2. Direct Marketing Puts Fish in Barrel For Us To Shoot.

Why isn't Live Nation hurting for cash in these tough economic times? They're not suffering because they pay close attention to their analytics and demographic information. They control the world's largest database of music fans and they know how to use it.

Live Nation can tell who should receive direct marketing based on demographic information, plus they can tell how receptive people are to their direct marketing efforts based on back-end analytics. We could all learn a thing or two from Live Nation in this regard.

3. Spend Less Money, Get More Results.

"Where's my budget?!?!?!" Good question! Budgets are shrinking nowadays, as we all know too well. That means that we no longer have the luxury of spending a million dollars on an ad campaign for an artist. That's perfectly fine with me, as mass marketing is not easy to measure.

I say this with 90% certainty, as my college text-book in Advertising 101, said "Market research on a mass level is ineffective, and the numbers shouldn't be relied upon as gospel. Market research on a mass level should only be conducted to help sway your clients to your advertising plan."

That's a bold statement for a text book!!!! Furthermore, it proves the importance of direct marketing, which can easily be measured, targeted and custom-tailored.

Think about it, direct marketing is approximately 1/8 the price of mass marketing, and yields measurable results, as it makes the consumer feel less anonymous in an ad-cluttered world.

As an industry, I highly recommend that we pay attention and show respect for our digital analytics and demographics.

OBLIGATORY PLUG: I talk about this extensively in my New Media plan. E-mail me to set up an interview.

4 Reasons Why YouTube Is Bad For The Music Biz

2009-04-09T14:24:00.000-07:00

Written By: Jim Markunas

Sure, I like to watch "Office Freakout" and other viral video classics, as a consumer of online media, but... were I a band or record label, I would shun YouTube just like the Warner Music Group did earlier last year.

YouTube has great viewership, and is as much of a household name as Google.

However, just because something is popular,

it doesn't mean that it's right... or that it's right for your brand or business.

I'm going to discuss the four biggest pitfalls of using YouTube to promote music videos and various other intellectual property.

1. No Ad Revenue!!!! -

I've been told by a few record execs that they've "worked out a 'deal' with YouTube," or are "in talks with YouTube to work out a 'deal.'" So what?

Just because YouTube has good intentions, doesn't mean that they're going to suddenly become an overnight source of income. Let me show you how money is lost by posting any intelelctual property on YouTube.

As you can see in my picture on the left, Hannah Montana's "7 Things" video, garnered over 65,000,000 views.

Although this is great publicity; publicity doesn't necessarily make money.

Had Hollywood Records decided to go with a video service willing to offer a $3 CPM for video viewership, they could have made bank on this video with a projected profit of $196,000.

Split between the label and the artist, as most contracts allow for, that would have been roughly $100,000 in revenue for the label (enough to recoup the video and then some) and $100,000 for the artist.

There are viral video sites out there that offer a paid model for music video views. Although some of these other sites don't quite have the viewership that YouTube has, I can only reiterate the #1 rule of financial accounting: "$1 today is better than $0 tomorrow."

2. No Sales Leverage -

You've seen them... pop-up affiliate ads that attempt to coax YouTube viewers into buying the MP3 version of the music video being streamed. This "last ditch" technique is both intrusive and ineffective, and will not:

A. Convince consumers to pay for music.

B. Correlate the relationship between YouTube views and record sales.

In addition, an artist can have 1,000,000 views on YouTube and not sell any albums or singles. This phenomenon happens not only because people aren't inclined to pay for something they can get for free, but also since YouTube is not seen as a viable retailer by consumers. What is the "carrot on the end of the stick" for consumers watching a free music video? There really isn't one if you think about it.

3. Pirated/Duplicate Content -

Ok readers, let's say you and I have a record label with 4 hot artists. For argument sake, let's say we have Madonna, The Red Hot Chili Peppers, U2, and the Foo Fighters. In an effort to get on the "publicity train" we post their current singles in video form on YouTube.

It seems that the day after we post our videos, YouTube users not affiliated with or employed by our label have posted the same music videos on their user accounts, thereby retarding our number of views.

I'll tell you why this is a problem... Not only is it a copyright infringement, but in turn, the duplicate/pirated content detracts from our label's number of views. Imagine that we do have a CPM/ad-share deal in place with YouTube.... We've essentially lost money to pirates (again).

YouTube doesn't have the same top-notch copyright standards that other viral video sites have.

4. They're Just Not Good Businessmen -

I can't in good conscience recommend a site that can't keep itself solvent. According to Google's annual report, YouTube is operating at at $470 million a year loss. Maybe we music biz folks like YouTube because YouTube's bad business sense makes us look like financial gurus. Yes??? Maybe?? (Crickets chirp as people give me dirty looks).

**Author's note: I apologize to my constituents for the harsh words.

I do believe we can work together to make music videos and other intellectual property profitable via the internet. I've covered this extensively in my New Media Plan. Before you watch the video, feel free to e-mail me for an interview. I promise I wont harm your office.

4 Reasons Giving Music Away For Free Can Significantly Increase Profits

2009-04-08T16:15:00.000-07:00

Written By: Jim Markunas

Once upon a time, in a faraway land, the music industry had a successful business model. A band would sign a contract with a major label, the label would press an album of songs; they controlled the distribution of said album - Consumers could only purchase the album in a store. The label also paid radio for airplay, thereby driving the only means of promotion (with the exception of print media). You had a single on the radio (anywhere from 1-4 per release depending on sales), and you had an album in stores. Viola! The labels drove record sales, large profits ensued, and everyone was happy (even most of the bands).

This aforementioned model was extremely lucrative and effective for decades until the introduction of the internet and Napster in the late 90s; then the rules changed. The unthinkable happened... labels no longer had a choke hold on distribution. Worse yet, people stopped listening to radio as the internet was much more satisfying. After all that... record sales tanked so badly, people were leaving their record label jobs to work at AIG.

As an industry, we can no longer depend on selling records as our main source of income in today's digital-driven market. The reason being, consumers have seen that we are powerless to make them pay for the old model. People that are in my age group (23-30) realize that stealing music is wrong, but do it anyway. That's bad enough, however... People in the 12-20 age range have no concept that music was ever sold as a product and have no qualms whatsoever about building vast music collections on Limewire.

With that said, I'd like to introduce a small tidbit of my new business model.

* Yes... It involves giving music away for free (author pauses for groans and screams of horror). But... I'm going to give you 4 reasons why giving music away for free will generate more revenue than selling it in stores.

Reason # 1 - New Age DRM - Forget about the totalitarian DRM of 2004 perpetrated by Sony/BMG and iTunes that enraged consumers. I'm talking about an idea that hasn't been invented yet. New Age DRM will revolutionize the way the music industry does business.

Imagine if you will, an MP3 on a website or P2P network. Embedded in that MP3 is an invisible demographic program that follows the file wherever it goes and collects user data without being detected by its user. The data-miner is able to show the copyright holder, i.e., the label distributing the free MP3 everything it wants to know about its consumer. If said consumer is playing said MP3 on his/her iTunes or iPhone while surfing the internet, the data-mining program will broadcast this demographic information to the label that owns the MP3.

This is quite powerful information for a company to have on a lot of levels. Imagine, if at the touch of a button, and in real-time, labels were able to discern their target market's favorite websites, buying habits, etc. That type of info is WILDLY invaluable, which leads me to point number 2...

Reason #2 - The Magic of Eyeballs A.K.A. Demographics - We can't control wallets and ears anymore as an industry, but we can control eyeballs; which are worth much more monetarily than $.69 from a sale off iTunes.

Imagine that we've given the new Lil' Wayne album away for free on the internet in return for demographic information (e-mail, address, 3 favorite websites, etc.). That essentially means, we not only control the demographic info for 5 million people worldwide, but we also in turn can control what they see.

Yes, they've gotten the Lil' Wayne album completely free via digital download, but in return they had to not only give us pertinent info about themselves, but we also coded each MP3 to play an ad.

Not only do we charge advertisers for our highly-targeted eyeballs, but we also control per-person demographic information that can be sold multiple times for $10 a head. Compare that to the pittance received from album sales nowadays.

Reason #3 - Passive Income - What's the difference between real estate, or property and "intellectual" estate, or property??? Ready?

Real estate owners are smart enough to earn substantial and ever-increasing amounts of revenue and asset allocation off of their properties without doing any back-breaking work (Better known as "passive income"). In the digital age, blogs and various other websites make most of their money from passive income.

What if music real estate (websites, blogs, Twitter pages, etc.) could generate passive income? Would we still need to sell records?

Reason #4 - Sponsorship, Cross-Promotion, and Advertising - You can't squeeze blood from a turnip (i.e., consumers), therefore, get money from people who have it, (i.e., advertisers and market researchers.)

Let me back-track a little. Suppose you're a college graduate and you're looking for a job. Let's also say that there are two companies that are interested in hiring you; Company A and Company B.

Company A wants you to clean toilets for $4.00 an hour 60 hours a week. Company B wants you to manage 10 toilet-scrubbers for $100.00 an hour. Which job do you, as the college grad choose?

Take a moment to think about your answer... Great!

Now... Realize that the college grad is the music industry, the average consumer is Company A, and other corporations with advertising/sponsorship budgets are Company B.

As an industry, we need to realize that getting consumers to fall in love with us again so that we can leverage their "eyeballs" in return for substantial revenue from advertisers and products will save the music biz.

If you'd like to discuss my New Media Plan in person, please feel free to shoot me an e-mail to set up an appointment.

3 Ghosts of Christmas Future For the Music Biz

2009-04-07T15:51:00.000-07:00

The browser may be the new iPod, but what's the new browser?

Ready???

It's simple. The mobile phone.

* Just as we had to bow and scrape for Microsoft in the mid-to-late 1990s, we must now take our hats off to Apple - The iPod revolutionized the way most music fans listen to their personal catalogs of sound, the iPod Touch drove the final coffin nail into the dated Palm Pilot, and the iPhone single-handedly changed the world.

A year-and-a-half ago, my friends at Disney (the only people making enough money to afford one at the time) had purchased iPhones. Within two weeks, their codependence with this "toy" rivaled that of Bobby and Whitney, and bordered on downright obsession. The death of conversation in place of incessant calendar/e-mail checking annoyed me to no end... until now.

Take a moment and ponder the sheer brilliance of the iPhone.... OK.... Let's move on.

The iPhone, much like the iPod, has most of the US market share in interactive cellular phones, rivaled by the Blackberry Curve (A.K.A. iPhone light) and the Samsung Sidekick (A.K.A. the new Motorola Razr).

* In the not-so-distant future, the iPhone will be replaced, or will replace itself - What will the new iPhone look like? Logically, mobile phone technology will have to integrate itself further into the everyday lives of consumers. Image if you will, one single device that has the ability to field phone calls, play MP3s, manage your e-mail accounts, etc. (This is the current iPhone). Now... Imagine if you will, a device that performs all of the aforementioned tasks, and in addition can perform the following:

1. This one device will be able to play through your car stereo via Bluetooth without having to take your ride to "get pimped."

2. This new device will act as your CPU in addition to your iPod, Outlook, and cellular phone. Picture seamlessly bringing your computer with you wherever you go; much like a laptop, but the size of an iPod, and having the ability to be "docked" to a monitor, keyboard and mouse via laser technology.

3. This device will replace TV, offering the same major and cable television networks that one would get at home. (Think Apple TV without all that "being too ahead of its time" problem.) Wouldn't it be cool to watch CNN on your phone as if you were sitting in your living room watching Time Warner Cable? Better yet!!! This device will play through your computer or Plasma TV via laster technology.

Moving on...

**Note** I've been pretty harsh on the record labels and music biz as a whole lately. I probably should apologize, and just may when one of you inevitably hires me : )

* Yes, Jim, the iPhone rocks, but what does that mean for the Music Industry? - Good question, music biz! The industry will eventually have to jump on this technological bandwagon in order to make money. I'm going to outline a few ideas covered in my New Media Plan. The following are dilemmas; my plan solves them.

1. The app - Disney has a Hannah Montana iPhone app that managed to entertain me for a few minutes. Kudos, guys!!! Lady Gaga (Geffen/Universal) has a similar app. Kudos, IGA!!! These apps, however probably cost the label in R&D costs and labor, and fail to monetize, thereby spending money to attempt to reignite the antiquated business model of "selling records."

2. Point and Laugh at Zune... then say you're sorry. - We've all seen Chicago MC, Common on the Zune commercials. In the blink of an eye, Zune has gone from being behind the times to being ahead of its time. Imagine that this new device we've been talking about has an opt-in subscription service in which consumers will be able to listen to any song they want at any time and however many times they want for a pittance of of $18.99 a month ($200.00 a year). This is the scary reality of the digital age. How can labels stay afloat on $200.00 a year?

3. Analytics - Labels and constituents... We all have a mailing list, how many of us have checked our analytics? Probably not a lot of us have looked into this on a higher level. This occurred to me a few years back when the honorable Ms. McCartney of iFanz.com turned me onto the concept of deeper-level web analytics as it pertains to nurturing an artist's fan base. Yes, Interscope, you send me a form letter whenever you release an album, but how can you tell if I opened your e-mail and read it? Better yet, how can you tell if I bought the advertised album and where I bought it from? In the age of cyberspace, content may be king, but analytics are the man behind the throne. Afterall, every Napoleon needs his Talleyrand.

Hey Labels! - I've explored and conquered these notions in my New Media Plan. Shoot me an e-mail to set up an interview.

New Media Plan - Part 2 "Why Sell Albums?"

2009-04-03T11:38:00.000-07:00

Physical is dead! Well... not completely, but think of physical sales as a 1962 Chevy Impala - A niche group of people still want to drive one, but most people would rather roll in a Hybrid.

This begs the question, "If artists and labels stop selling albums, where does the money come from?"

Great question! The internet has opened up a wealth of potential business models from affiliate-oriented programs to ad-supported streaming, just to name a few examples.

Instead of relying on the antiquated notion of selling a square object to consumers for $15.99 a pop, artists and labels should band together to think of new ways to bring in revenue; not just in the digital forum, but in all marketplaces.

A few key points to remember:

* There will be a jump in online sales in the immediate future - According to Amazon.com (world's largest online retailer) and Amway (a company of legal Ponzi schemers), within the next 10 years consumers will be buying 70% of their goods online. This will be an extremely large shift from 35% in 2008.

* This isn't just young consumers buying music and movies in the digital realm - Everything from cosmetics to food is currently purchased online by a wide range of consumers; even my old boss at Disney (an experienced corporate lawyer in his 50s) has admitted to buying his groceries via an "online delivery service."

* The browser is the new iPod - According to Rio Caraeff (EVP UMG eLabs), the album is an antiquated notion in the face of technology that favors portability and instant gratification.

Hey Labels! - I've explored and conquered this notion in my New Media Plan. Shoot me an e-mail to set up an interview.

The New Media Plan is Coming... Part 1 - Music Videos

2009-04-01T12:27:00.000-07:00

Putting bad economic times aside, the music biz as a whole is still frantically trying to figure out how to monetize; they're also scrambling to understand the constantly changing digital landscape. I've solved everyone's problems.

"Income in the New Media Age" - Part 1:

Monetizing digital music video views.

With the exception of UMG's tentative Hulu deal, how is the industry supposed to monetize digital streams of music videos? I have several answers to that in my New Media Plan.

My New Media Plan is catching momentum, as major labels still continue to debate how to monetize music video plays and how to effectively reel in ad revenue off of intellectual property. My plan garnered significant interest from Walt Disney Records, and has led to meetings and consulting offers from other companies as well.

**NOTE: If you're tired of not making money from YouTube views, you'll love my New Media Plan.

E-mail me to set up an appointment to discuss my New Media Plan

Jim Markunas Reaches 1,100 Followers on Twitter

2009-03-31T15:15:00.000-07:00

I have to confess... I'm in love with Twitter. What started off as a fringe social network site has blossomed into an all-out societal trend.

With the ease of sending "Tweets" or updates from your e-mail account, Twitter profile, or cell phone, it's impossible not to be networking all day every day.

My favorite thing about Twitter is that it's a great way to promote bands and artists.

Follow me on Twitter.

The Quest For Income In The New Media Age

2009-03-12T12:28:00.000-07:00

I sat down with the director of New Media at Walt Disney Records today to talk about my multi-pronged new media plan. My presentation was called "Income in the New Media Age," or simply, the "New Media Plan."

The New Media Plan lays out in detail how to monetize intellectual property (especially music videos) on an online forum in addition to other key online sales initiatives and ad-supported models that have the potential to significantly increase income for any record label or artist.

I'm in the process of setting up meetings with other labels and companies

to discuss my plan later this month.

Sites That Have Featured Me

2009-03-07T23:38:00.000-08:00

Music Think Tank

Is A&R Necessary in Today's Music Industry?

Music Dish Ezine

Author Page

Why Sell Albums?

3 Reasons Why The Pirate Bay Trial Was A Loss For The Music Industry