The Scourge of the Music Business -- Who Pays?

There is a lot of scuttle and divisive talk in the news today about music on the cloud and how this could hurt the artists, whether the music business is getting better or in decline – it goes on and on. Simply put – illegal music and those who are out to make a buck by proliferating it for their own pocketbook – are the scourge of the business. In some cases it is a “little guy” who wears the hat, but more often than not – it is a powerful conglomerate, what we politely refer to as the “majors”. You can cut data anyway you want to make your point. And the majors do it well – they have the money and power behind them to shape the dialogue any way they want it to be. I happened upon this interview (http://www.songwriteruniverse.com/neil-portnow-123.htm) with the President/CEO of The Recording Academy Neil Portnow, which I found very interesting in light of what is being discussed. When your focus is the artist and your hopes and dreams for their success, you get a very different perspective. That’s what I liked about this interview…plus Portnow says lots of thing that jive with my philosophy on the new music business. A few of the highlights:

The fans’ love of music remains strong. Music will never go away – yes, the channels we use to get music might transition over time, but as a whole – people will always want/need access to it. The biggest issue as Portnow sees it – and I definitely agree – is how do we make the industry profitable for the artist AND for entrepreneurs on the business side? Our business’s foundation is based on finding new and lucrative distribution channels that are good for the artist and the distributor. One way we seek to do that is to connect artists with charities – opening up more opportunities to sell music, to connect the music with good and broaden the visibility of the artists and their art. This is a win/win on all sides, particularly because more music is being produced by the indie sector than ever before. This means all of these independent artists need the right channel to get to their fans and charitable causes have more potential to make a difference because of the support by indie musicians.

One last but very important point Portnow makes that needs to be highlighted: don’t kill off the CD business prematurely, he says. And he is absolutely right. It might be a shocker, but it is true -- more than 70% of all music sold is sold as a physical product in a RETAIL STORE. Crazy, right? In the end, the consumer will decide how they want their music. At Altavoz our mission is to provide music in all the ways and in all the places fans demand it. We will keep on putting music in stores – CD and Vinyl – and will make it available through streaming and download, mobile – you name it. As Portnow rightly says, we are entering a period of time where multiple formats will exist side-by-side. It is the company that can leverage all of these formats and channels for good that will succeed.

JS

We have set up a Facebook group for the Buy Indie Support Locals movement

changing the distribution model into co-creation disto w/artist/bands/labels

So let's get what it is we are talking about-Right.  Distribution is the movement of goods from suppliers to a middleman i.e. distributor who in-turn reaches out to retailers, digital partners and others that are interested in securing the partnership benefits that a wholesaler has when there are large number of suppliers and retailers all of whom are seeking to satisfy a limited number of customers.

Now let get the most important part out of the way.  Major vs. Independent.   If your not on a label owned by a major distributor  then you are on an Indie label and while you may at the moment enjoy major distribution it will be plain to everyone after this holiday season that they are jettisoning those labels they don't directly control.  

Sorry the writing is on the cards and the only folks that think different are the ones that expect what was to stay the same.  While digital is big news physical sales is still 58% of sales so for the most part well highlight it here.

No matter what path you take to get to a distribution contract presently both Indie and Major charge a setup fee 5-20k and then you the producer, see contracts, have to make sure you have funds available to support, at present, 1-Major$$$$ depending upon the retail placement or general marketing of your product. There is a reason why the supplier gets the 5-7 bucks per record.

Sure, What supplier doesn't want their product in as many stores as possible. Now the stores would love to have those artist in their stores that have a connection to the local fans because the second law of distribution is that if don't sell or breaks your will get returns. Again see contract and note largest amount of dollars from the overall sales is going to you the suppliers.

Considering a  distributor will normally try to sell it to the stores and what happens from that point on is a whole-nother-set of issues.  Lets just stop the whole cycle here and offer an alternative and sorry major label artist your stuck in your lame ass deal.

If your an artists/band/label we have a plan that will allow you to interact with our system ala-cart so if your ready to deal let us know the general plan is that we have restructured our company stock-ownership plan and our suppliers will be offered when signing up for the Distro-Beta level distribution plan which will start at $1500.00 which inclusion in Altavoz's retail catalog, and a one sheet, visit our contract co-creation site to see the contract develop  FutureofMusicToday.com

With this reduced price for catalog setup Altavoz is already making the distribution equation more friendly for the suppliers yet we are not going to stop there.  When someone signs up for this Distro-Beta deal will get a warrant for the future purchase of 1 unit of Altavoz common stock.

That's right the act of getting a managable distribution agreement will now also put said supplier into the position of stockownership in the vary company you need to sell your goods. 

Please let us know if there is another distributor that can place your product in front of  85 percent of the music buyers and make you a music sales star and you get to be one of the owners.   Well, they all will because we are only just beginning.

When milestones in sales are reached our suppliers will be offered the traditional cash incentives or more warrants for stock.  Every product that records sales of 10 units will receive 50 units of stock outright. So sell 100K worth and your get 500 units of common stock in the company that is selling these for you and other suppliers just like you.

BTW your making money with each sold and you know every download, stream and store pull online partners sales figures any day or time of the week 24/7/365 transparency we have asked some of the greatest hackers and programs to build the system they would support and that the know will support the artists and bands that we all love and need.

So we are going to combine this technology which we are going to be offering up the APIs and moving to an open source platform in the near future.  As for the digital part once we have you in our system we have online systems in place that will stream and allow downloads that in turn gives us all data about the when and where your fans are in real time.

Not a guess a pin point match.which then tells you, us, promoters, radio and retailers that there is something afoot and if the numbers and then tour schedules sync up the magic that is the new music business will unfold and everyone will have fun and make a just reward for the effort.

btw we have a Distro-Alpa plan that will be coming online that will allow suppliers into our distribution system without any setup fees, sorry no warrants to start however once you makes some sales the offer is the same sell units, make money earn warrants for ownership in the company that is selling your product(s).

If you think about it the suppliers are now the co-owners and the fans and everyone else gets what they want the best music in the most choices that a collections of fans can demand.

So what about the artist that is just smart enough to come straight to distribution. Since we are a cooperative of many there is a chance that we many have an indie label in our database that will take your product on which our Distro-Alpha deal will show the moment your music hits our system.

*At a certain point in time we will be announcing P&D , packaging and distribution deals and those will be pretty much alone the line of an LLC with us and you and the ability for you to sell and tour doing the rest.