Secondary Ticketing Needs to Change

As an advocate of the future of Live Music as both a consumer and provider I would like to express my frustration in secondary ticketing. In May of 2014 I remember sitting down at my computer to purchase a ticket to my favorite band, Zac Brown Band at Fenway Park. It was an hour after the tickets went on sale that I went to select “purchase” but soon realized I was an hour too late. 70,000 tickets had been sold within thirty minutes. A ticket that went from a reasonable price of $60 with a decent view, quickly jumped to $170.

The secondary ticket market in 2012 was about a $3 billion to $5 billion business, growing at a rate somewhere between 12 percent and 24 percent. As of 2013, only a few states prohibited reselling tickets or made it unreasonable to do so. The practice is prohibited in Kentucky and Michigan, although Kentucky doesn’t establish any penalties for a violation. Massachusetts limits the markup to $2 but allows a broker to add a service charge to recoup the expense of buying the ticket. Rhode Island and North Carolina both limit the amount charged above face value to $3. New Jersey has a more generous policy that enables brokers to charge up to 150 percent of the ticket’s face value. In Hawaii, Indiana, and Maryland it is currently illegal to resell a ticket for a boxing match at more than its face value (according to the Maryland Code, this law only applies if you are an event “promoter”). Indiana also prohibits the resale of tickets to any sparring or other unarmed combat match for more than face value, while Maryland limits it to boxing, wrestling, and kickboxing. Although, selling a ticket for any other type of event is legal in those three states.

Radiohead have announced a partnership with ethical ticketing company Ticket Trust. The issue of secondary ticketing has become a hot topic, with noise being heard far and near, a number of bands have stepped into the fray. Radiohead’s management issued a statement blasting the practice of secondary ticketing. “Secondary ticketing is wrong on so many levels… the band’s enjoyment of their own shows has been marred by the knowledge that a great many of their fans have been obliged to pay well over face value for their tickets”.

With new ethical ticketing companies such as Ticket Trust there is no reason why artist shouldn’t be protecting themselves. If there is money to be had, then the artist is deserving of it. And as an artist supported by fans of all different economic standing,  one would hope to be represented as an artist that doesn’t rip off their fans. Music is to be enjoyed and accessible to all, not survival of the fittest or… the richest.

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Life with a Sound Track

Imagine if your everyday life had a soundtrack. The places you visited from Paris to Hollywood, the same everyday route you took to school or work, the local park down the street or even the closest beach you jog in the morning had a specific soundtrack associated to that location.

Musicians and music lovers alike have had a form of doing this for years through playlist. A group of college students going on a road trip might construct a playlist, or a compilation album that would then become the sounds of a memory forever associating to that road trip. A sixteen year old girl going through a break-up might decide to create a playlist of heartbreaking pop hits.

Adding location awareness to music apps is fast becoming a major mobile trend, as is evident by a rash of new mobile music apps hitting app stores of late. Use of location technology is taking many forms. Many, if not most, are designed to let users tag a location with a song. The result can be a localized, crowdsourced playlist, add context to the discovery of a new song or even be used as a way to find concerts and live shows. Other apps flip it around a bit by letting users in the same area determine what the venue should play. Think about the data local businesses could collect.

For those Spotify Premium listeners, Spotfiy early this year created a new feature for their mobile device app that has tempo detection to the rhythm of your Stride. Here is how it works: Pick from a playlist, such as “Recommended For You,” “Pop Hits,” or “Electronic Moves,” and you’ll hear a woman’s voice say, “Start running to detect tempo.” Your stride shows up as pulses on the green circle until she says that she knows your stride. It takes a few seconds—about ten paces. Then you’ll get a track with matching beats per minute. Genius.

Imagine if these two amazing app features together in one. As a provider of music and sound catalogs such as Spotify, this would open up a whole new world of revenue for musicians. This would create jobs for composers, DJs, playlist makers from all over the world giving them the opportunity to compose and invent infinite sounds/compositions for streaming services. This could re-inspire the consumers value of music and appreciation for it; along with allowing non musicians to compose and create the film score of their own life using the catalog provided by the service.

How is Music Valued?

At minute 4:24 infamous DJ speaks clearly, “This is a beautiful thing, we all have love and unity… showing your flags, representing your country, WE ARE ONE!”  Music lies at the heart of human emotions and relationships, connecting us all regardless of what language we speak or country we come from. The epicenter of music is emotion and how and what it makes you feel; and that very primal power is where the real value of music lies.

We find ourselves in an up hill battle, where in 2015 music is less valued than ever before. There is a shift from sales to streaming and the dominance of social networks as the channels via which we consume media are diminishing the value of each of these platforms. Because of this downward spiral in revenue, major artist and labels are focusing on one thing, and one thing only, how to make money. Artist need to make a living and are absolutely deserving but I think with this new generation we should reconsider what is truly valued.

With the capabilities and the rapid growth in technology there is still a hope for music to be deeply appreciated both emotionally and financially: Artist-fan relationship, Live concert production, and great music. I am not at all saying these are the three and only three avenues to making money but this is a start. I believe that we should no longer treat an artist and its fan as a product to buy and sell, this is where music has lost its value, but we should treat this love for music as both our weakness and strength.

My first reaction to this was that it is wrong on varying levels. Firstly, the haunting effect of Tupac being back from the dead is absolutely terrifying. I do believe that carrying on a legacy is righteous and if we do so otherwise history could be lost; Eine Kleine Nachtmusikand and the works of Mozart would not have blessed present day society hundreds of years later if human kind did not carry on that legacy. But I do disagree that bringing Tupac back from the dead for his estate to make a profit is horrid. That being said, what if the industry used this technology for current living artist? The idea of a live performance no longer actually being live, sickens a generation such as my parents. They wouldn’t go to the show. But the generation that has grown up in a society where they see the world from behind a screen, may feel differently.
This is where our love and emotional attachment for music is valued differently in every individual. A fan of Tupac that was born a few years too late may have never had the opportunity to see him live in concert but now has that opportunity. A lover of EDM music may not be so concerned about what his favorite DJ is doing up on stage but rather goes to a festival for the pure experience of listening to great music and connecting with others that have similar interest. Music touches us individually and I truly believe there is a way to monetize that love without diminishing the value or reason we listen to music.

The Owners of the Music Industry

To further my discussion of my previous article on the revenue artist make within streaming, I wanted to look at the whole picture. Where is most of the revenue going if in 2014 global recorded music totaled in the US at $6.9 billion?  To break down the consumption of music in the US by genre, although possibly in broad terms, according to a study released by Nielson Music, rock music was twice as popular in 2014 as pop musicaccounting for 29% of the industry’s music consumption across album, track purchases, and music streaming.

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Forbes magazine also provides us with the top three paid musicians of 2014:

With Dr. Dre’s (Aftermath Entertainment) most recent sale of Beats, the company he cofounded, to Apple for $3 billion, he is listed at number one going home with $620 million this year before taxes. Coming in far second is Beyoncé (Columbia & Sony Music) with $115 million as her most successful year yet.  And finally, The Eagles (Asylum) with their longevity in the industry at $100 million.

The Wall Street Journal is reporting that after securing $400 million in fresh funding, Spotify is now worth more than the entire US recorded music industry at $8.4 billion.

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Sony leads the record label trio at $4.9 billion but if we look at Live Nation it will not be long when it takes a step ahead of all three. With Live Nation’s monopoly in live music, being that most revenue is from cold hard ticket sales, it would not be surprising that Live Nation takes the lead within a year.

Digital Streaming Break Down

To take a step back from my previous article, I wanted to know if an unsigned artist could actually make a living off digital streams. Research done by Alexandre Perrin, a professor at the renowned school Berklee College of Music, breaks down for us very simply how much an artist would make from the top streaming services.

Let us pretend that a local acoustic folk singer out of California,”Beth Love”, wanted to make a living recording her music and make it available on the top streaming services. Beth believes she can make $1,599 per month from streaming alone. With a residency at a local bar where she also makes about $250 weekly, she is able to pay rent and buy groceries.

Refer to the graph below:
If the goal is to make $1,599 per month, Perrin demonstrates how many units Beth would need to actually sell on all platforms. Selling a CD would make the goal relatively reachable. As an unsigned artist on iTunes with a 30% cut for a single track download the goal seems a little bit more out of reach.
Looking at streaming, on the right Perrin shows us that an unsigned artist makes 60% of any revenue from the main streaming platforms. On youtube, with 60M active members Beth would need just under 900K views per month just to make ends meet.

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How is the Music Industry going to make money?

From the very beginning of the “Record Label” we know that a label made money by SELLING and distributing records. Plain and simple. The very minute the world went digital there has been a devestating collapse in revenue specifically in selling records. Spotify, Pandora and other streaming services are usually considered the bad guys. The industry blames them for the lost of revenue. Times magazine calculated in November 2014 that an artist’s stated payout range is $0.006 to $0.0084 per stream. Before Taylor Swift pulled her music off Spotify her chart breaking hit “Shake it off” streamed 46.3M times with only a pay out between $280k-380k. Sounds ridiculous but consider this, although an artist such as Taylor swift is making peanuts through Spotify services, there is a gain elsewhere. The terabytes of specific data being collected through Spotify is unfathomable. Spotify now knows that Sarah Smith currently lives in San Diego, CA, 25 years of age, in a happy mood and on her afternoon jog is wanting to listen to “Shake it off”. At Taylor Swift’s level of success this information is automatic but for a DIY band out of Boston now can promote, market and shape their tour around this information. If the Boston based band is getting the most streams out of Chicago at the age demographic of 18-20, performing a concert at a university in Chicago could be a very valuable show.

Which leads me to my next point. The industry’s last hope of survival is live performance. The EDM scene seems to be getting it right. Music Times calculated the Calvin Harris will walk away with $400k per gig in his New Hakkasan Deal. EDM festivals such as Tomorrowland, Electric Daisy Carnival, or Sensation bringing in hundreds of thousands of fans have shown huge strides in changing live performance. Selling albums is no longer the main focus but selling tickets at a bare minimum of $100 is top priority. In order to do this, millions of dollars needs to be invested into a production of  a live performance that is so monumental and life changing to an attendee that it could never be reproduced in any other form. On the other hand a website called Sofar is a live performance/streamed based platform shifting live shows into a more exclusive setting. Once you join the free membership, hundreds of exclusive  shows all over the world are now available to purchase tickets. Choose the city you are in and see the next show; the only catch is that you don’t know the location until the day before nor the artist you are seeing until the day of. This platform is a genius way to help people discover new artist in a social setting that can be just as impactful in their lives as a mega show but without the millions of dollars being invested into a production for one night. How amazing would it be to see one of your favorite artist perform in a living room big enough for maybe 20 people?
Until the next best thing, the way I see musicians making money in an industry as loved but taken for granted as this one, is innovating a live experiences so spectacular, big or small, that it will never be forgotten.