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Dubcnn Blogs: Dollars and Sense - Second Edition - June 13, 2008 By : Rud

Eric Engelwood continues his bi-monthly blog "Dollars and Sense" which kicked off last month with an open discussion about the challenges and opportunities marketing your music over the internet.

Today Eric is back and this time asks: People like free, but will it translate into sales? In this blog he aims to get artists to think more about the material they release and the opportunities that can surround them as they leak music to the public.

Dubcnn Presents: Dollars And Sense (A Blog by Eric Engelwood)

Stay tuned for the next entry from Eric two weeks today right here on Dubcnn and ensure you leave your thoughts for him over at the Dubcc Forums.

« Last Edit: June 13, 2008, 11:46:23 AM by Rud »

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Chad Vader

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Damn this is a interesting issue,but hardly no one replies  :-\
So I bump it again;  ;)

Dollars and Sense: Second Edition (Friday June 13th, 2008)

People like free, but will it translate into sales?
By Eric Engelwood

So I had my iTunes on shuffle trying to come up with something to write about when it dawned on me:
The West Coast is at the forefront of marketing in the music industry. iTunes played me Crooked I’s Hip-hop Weekly #19.
That track was followed up by Bishop Lamont’s City Lights, which was followed up by Problem’s I’m toe up remix.
The West Coast is putting out quality music for free, so how will artists make money?
Will this tactic of "free music" pan out or will we see another generation of angry West Coast rappers shunned by the industry?

Think about it for a second: Crooked I put out 52 weeks of free music. That’s nearly four albums worth of free music.
Bishop Lamont has put out three album quality mixtapes in a little over a year.
Artists regularly put fully mixed and mastered tracks on Dubcnn, and countless other media outlets for free.
This is a brand new way of marketing and it’s time for artists to take advantage of this new model. Welcome to music 2.0.

Artists are building grassroots fanbases , but are they utilizing them accordingly?
In order to succeed, touring, direct to fan sales, and other revenue streams should be examined.
For every artist that puts out a track for free, there should a plan to make money behind it.
Will that track get that gets the club jumping translate into touring money?
Can you license that song about your favorite booze to the booze company for a commercial?

For the New West artists reading this -
Imagine for a second that you NEVER made a cent from selling a physical CD or a track online.
How would you make money from your music?
If you can list three things off the top of your head then you’re in good shape.
If not, get brainstorming. Like I said in my last blog post: Throw some sh*t at a wall and see what sticks.
Think about different ways of monetizing your music in other ways than just selling tracks or CD’s.

The music industry is going through a sea change, but with the right angle the West Coast can come out ahead.
The sooner artists realize the way of making money in the music industry has changed,
the sooner they can come up with new ways to get their paper.

Well,the move Prince did was pretty genius;
n June 28, 2007, the UK national newspaper The Mail on Sunday
revealed that it had made a deal to give Prince's new album, Planet Earth,
away for free with an "imminent" edition of the paper, making it the first place in the world to get the album.
The date chosen was July 15, 2007.
This move has sparked controversy among music distributors and has also led the UK arm of Prince's distributor, Sony BMG, to withdraw from distributing the album in UK stores.[31]
The UK's largest high street music retailer, HMV decided to stock the paper on release day due to the giveaway.

How about XXL and/or The Source do the same?
And let advertisers pay the bills. I'm sure advertisers would pay up.
The albums would get world wide distribution in news stands all over the world.

This could also be a option;
In Rapper’s Deal, a New Model for Music Business
By JEFF LEEDS Published: April 3, 2008

LOS ANGELES — In a move that reflects the anarchy sweeping the music business, the superstar rapper Jay-Z, who released his latest album to lukewarm sales five months ago, is on the verge of closing a deal with a concert promoter that rivals the biggest music contracts ever awarded.

Jay-Z plans to depart his longtime record label, Def Jam, for a roughly $150 million package with the concert giant Live Nation that includes financing for his own entertainment venture, in addition to recordings and tours for the next decade. The pact, expected to be finalized this week, is the most expansive deal yet from Live Nation, which has angled to compete directly with the industry’s established music labels in a scrum over the rights to distribute recordings, sell concert tickets, market merchandise and control other aspects of artists’ careers.

As CD sales plunge, an array of players — including record labels, promoters and advertisers — are racing to secure deals that cut them in on a larger share of an artist’s overall revenue. Live Nation has already struck less comprehensive pacts with Madonna and U2.

In Jay-Z, Live Nation has lined up with a longtime star who, after toiling as a self-described hustler on the streets of Brooklyn, earned acclaim as a rapper and cachet as a mogul.

Live Nation’s core business has revolved around major rock and country tours, and with Jay-Z it is making an unexpected foray into hip-hop. The company is also placing an enormous wager on a performer who, like many others, has experienced declining record sales. (Last year’s “American Gangster” sold one million copies in the United States; “The Black Album,” from 2003, sold well over three million.)

But the arrangement would also position Live Nation to participate in a range of new deals with Jay-Z, one of music’s most entrepreneurial stars, whose past ventures have included the Rocawear clothing line, which he sold last year for $204 million, and the chain of 40/40 nightclubs.

Jay-Z, 38, whose real name is Shawn Carter, owes one more studio album to Def Jam, where he was president for three years before stepping down in December after he and the label’s corporate parent, Universal Music Group, could not agree on a more lucrative contract.

His first undertaking with Live Nation is his current 28-date tour with Mary J. Blige, his biggest live outing in more than three years. After that, Live Nation envisions integrating the marketing of all Jay-Z’s entertainment endeavors, including recordings, tours and endorsements.

“I’ve turned into the Rolling Stones of hip-hop,” Jay-Z said in a recent telephone interview.

The deal answers a question that had been circling through the rap world for months: Where would Jay-Z take his next corporate role? As part of the arrangement, Live Nation would finance the start-up of a venture that would be an umbrella for his outside projects, which are expected to include his own label, music publishing, and talent consulting and managing. Live Nation is expected to contribute $5 million a year in overhead for five years, with another $25 million available to finance Jay-Z’s acquisitions or investments, according to people in the music industry briefed on the agreement. The venture, to be called Roc Nation, will split profits with Live Nation.

The overall package for Jay-Z also includes an upfront payment of $25 million, a general advance of $25 million that includes fees for his current tour, and advance payment of $10 million an album for a minimum of three albums during the deal’s 10-year term, these people said. A series of other payments adding up to about $20 million is included in exchange for certain publishing, licensing and other rights. Jay-Z said Live Nation’s consolidated approach was in sync with the emerging potential “to reach the consumer in so many different ways right now.” He added: “Everyone’s trying to figure it out. I want to be on the front lines in that fight.”

The popularity of music downloads has revolutionized how music is consumed, and widespread piracy has contributed to an industry meltdown in which traditional album sales — composed mostly of the two-decades-old CD format — have slumped by more than a third since 2000. (The best seller in 2007, Josh Groban’s “NoŽl,” sold 3.7 million copies, compared with 9.9 million for the top album in 2000, according to Nielsen SoundScan.)

That has further pressured record-label executives to rewrite the economics of their business and step beyond the sale of albums in an attempt to wring revenue out of everything from ring tones to artist fan clubs.

Jay-Z said that his future as an artist could involve elevating the role of live performances, long a mixed bag even for popular rap acts.

“In a way I want to operate like an indie band,” he said. “Play the music on tour instead of relying on radio. Hopefully we’ll get some hits out of there and radio will pick it up, but we won’t make it with that in mind.”

Though sales for Jay-Z’s tour with Ms. Blige have been strong since it began on March 22, with almost all the early dates resulting in sold-out arenas, it is unclear when Live Nation could carry out other aspects of the deal. (Jay-Z said that he hoped to deliver his final album for Def Jam later this year.)

Critics of Live Nation, which lost nearly $12 million last year, predict that it would be difficult to turn a profit on the arrangement, given the continuing decline in record sales and the mixed track record of artist-run ventures. Shares in the company have suffered since October when Live Nation negotiated a reported $120 million deal with Madonna.

Michael Cohl, Live Nation’s chairman, said he was not worried. Though he declined to discuss terms of the Jay-Z arrangement, he said it did not require an increase in record sales to be profitable. “He could be doing more tours and doing great,” Mr. Cohl said. “There could be endorsements and sponsorships.” He added, “The whole is what’s important.”

He cited Jay-Z’s forays into a host of other businesses as a model for Live Nation. “What he’s done has kind of mirrored what we want to do and where we think we’re going.”

Some executives at major record labels have privately portrayed Live Nation’s artist deals as overly expensive retirement packages for stars past their prime.

Others disagree. “I’d much rather be in the business of marketing a superstar who cost me a lot of money than taking the 1-in-10, demonstrably failing crapshoot” of signing unknown talents, said Jeffrey Light, a Los Angeles entertainment attorney, referring to the traditional record company model.

But the dimensions of the competition could change if Live Nation begins vying for the same emerging artists that the labels hope to sign. Live Nation is negotiating with a Georgia rock act, the Zac Brown Band, after apparently wooing it away from an offer by Atlantic Records, according to music executives briefed on the talks.

Jay-Z, for his part, suggested that the string of stars to exit the major-label system would also signal to younger acts how to plot their careers. He said that rising artists will be thinking: “ ‘Something must be happening. Madonna did it, she’s not slow. Jay-Z, he’s not slow either.’ ”

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Re: Dubcnn Blogs: Dollars and Sense - Second Edition - People Like Free...
« Reply #5 on: October 29, 2008, 02:58:27 AM »
Interesting topic.  Will have to re-read it again tomorrow when I'm not so tired but I agree with the writer about the west giving out alot of good music for free.  All 3 of Bishop's mixtapes and Taje's 2 I would have payed money for.  All great projects and god there are countless others that have been released that were really good.