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allofbeercom · 6 years ago

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Can Adele fix the broken music industry?

Unless you fell into a post-holiday food coma, you know that Adeles album25just sold more copies in its first week than any album, ever. The average human being had been conditioned to believe this was not possible in 2015.

Remember that narrative?Napster destroyed the music business, the iPod stopped the bleeding, digital and streaming services are still nascent, and a Google search can find anything for free, so the good old days of multi-platinum records are pretty much gone.

On the heels of her first single “Hello,” Adele waved goodbye to that doomsday line of thinking, crushing decades-old sales records by such a distance that, if she were an Olympic athlete, wed immediately assume she healed her damaged vocal chords with PEDs. Putting aside certain idiosyncrasies of Adeles album buyers (it turns out old people still buy CDs!), getting more than 3.8 million people to doanythingin the same week is a triumphant feat.

The ripple effect of Adeles astonishing sales figure is already visible. This past week, Rihanna and her management made a last-minute decision to postpone the release of her new album,Anti, at the apex of the heaviest consumer spending moment of the year. It turns out the shadow of Adele is the one umbrella Ri-Ri wont stand under.

And who can blame her? Between Adeles album sales and Taylor Swifts cultural and touring dominance (FYI: She played to a stadium full of 76,000 people in Sydney last weekend), its tough to stand out at the moment, even for Rihanna, one of Forbes top 10 grossing female artists. Despite working in a music industry with a dearth of women in meaningful executive positions, the strength and power of female artists has never been more profound. And unlike Hollywoodwhere thanks to the North Korean email hack of Sony and a courageous Jennifer Lawrence, we now understand the starkness of the gender pay gapfemale musical artists get paid on par with their male counterparts. In music, the entire ecosystem earns a sizable percentage of whatever the artist makes; record labels make a percentage of album sales, promoters make a percentage of ticket sales, merchandisers make a percentage of T-shirts sold, and so forth. Which means we are at a unique moment in history where A-list women hold much of the real power in the music business.

The strength and power of female artists has never been more profound.

So what will they do with it? And how does their massive success shine a giant spotlight, for better and worse, on everything thats happening with the music business and the streaming business and the concert business and artist representation right now?

Adele and Taylor started this upheaval by each flexing a particular muscle that belongs to them and them only. Taylor used her pen as the sword, bringing the mighty Apple to the bargaining table to pay artists for streams during the free trial for Apple Music. Adele turned herback on streaming services to break an album sales record that had stood since Justin Timberlake was fronting a boy band with Britney Spears on his arm. But beyond the PR success and ego boost thats generated from seven-figure first-week sales numbers, these efforts did little to make a lasting impact on the business of music.

Like the rest of the news cycle, we celebrate heroic outliers, write think pieces, marvel at the numbers, and move on within the confines of the same old structure. As President Business from The Lego Movie would have us believe, everything is awesome. Only it isnt. While artists have done much to break through decades of exploitation and capture more of the value they create, the fan experience in most facets of music consumptionlive and recordedremains unconscionably broken.

Nowhere is the dysfunctional tension between Los Angeles/New York-based content creation and Silicon Valley-based technology more on display than in digital music services. In the Valley, we scoff at companies that ship their org chart in a product. (Note: Microsofts Steve Sinofsky who coined this phrase for mass appeal, and for some time it was Microsoft who was guilty of this en masse.) You can tell when groups within or outside a company arent working well together based on the way the products features play wellor dont play wellin production. This is displayed everywhere in digital music from convoluted hardware options and endless interconnected devices in the home to cutting-edge software that never seems quite ready for primetime. In particular, Apple Music still feels like a house built on the foundation of an old home that the owners never wanted to fully tear down for tax purposes. The compromises and technical debt are palpable.

The fan experience in most facets of music consumptionlive and recordedremains unconscionably broken.

But those issues pale in comparison to the evolving royalty structure in musicbasically, the agreements for how much artists, labels and songwriters get paid when you buy or stream a song. Without hit music from the Taylors and Adeles, those subscription music streaming services are essentially useless. Even if they have the best user experience for fans, without music that matters, their core proposition (the music you want for a flat monthly fee) becomes completely hollow. Disappointed fans know theyre being misled, especially when YouTube and BitTorrent offer even the mildly unscrupulous a holiday table cornucopia of free access to all the music on earth.

We know the economics of music streaming are still being sorted out, but we also know this happened with video content a few years agoand, eventually, major players like Netflix, YouTube and Hulu figured out how to window content, present it exclusively,and generate their own product. If music follows that model, then the biggest artists will sell their exclusivity to distributors like Spotify, Apple, YouTube/Google, and others. Our best asset to help that happen? Just keep complaining about this stuff.

What we are seeing and (not) hearing now as fans is the very public sausage making of a new recorded music revenue model, the loudly creaking rusty hull of an antiquated ship turning a bit too quickly in a swift current. For most of us downstream, it creates a suboptimal listening experience and never-ending frustration.

And its only worse with live music, where artists now make 70 to 90 percent of their income, despite a gallingly offensive fan experience.For one thing, the industry continues to lie to fansblatantlyabout the price of tickets until the very moment of purchase.An upper deck ticket for the Demi Lovato and Nick Jonas tour in Los Angeles on Sept. 17, 2016, is currently available on Ticketmaster for $49.95. After a $15.30 service charge, the actual price of that ticket is31 percent higherthan advertised. At StubHub, where between buyer and seller fees the ticket is routinely marked up 25 percent, the company tried to show pricing all-in. But after competitors didnt follow suit, StubHub reverted back to the draconian way of tricking fans into moving down the purchase funnel by baiting them with a lower price point, before dropping fees on buyers at checkout. Most artists are consciously (or navely) complicit in this dirty game. Many touring deals for large artists stipulate that artists are paid more than 100 percent of gross ticket sales. How can this be? Its because the promoter and venue make their money off of parking, beer, sponsorship, and importantly, service fees.

This wont change until fans start pressuring the artists to facilitate that change. Artists are intensely sensitive about their brands. With social media giving loud voices to all, artists are hyper-concerned with criticism for high ticket prices even though they have historically enabled a service fee system that exploits their fans. Its why so many good tickets often make it into the hands of brokers from venues, promoters, and artists directly. Ever wonder why you see so many VIP packages for sale? Theyre designed to charge market price for a ticket with a few low-cost add-ons attached. So why cant artists own their income desires and get paid what they are worth, or alternatively restrict transferability of tickets to ensure that fans get in at an artificially low price? Service fees are an extension of the ticket price, so why arent they presented as such up front in the buying process?

Apple Music still feels like a house built on the foundation of an old home that the owners never wanted to fully tear down for tax purposes.

All of the carnival barking about ticket prices comes against the backdrop of a swelling period of time between the onsale of a concert and the actual show date. For the concert example above, a fan buying four mid-level tickets would be putting down more than $400 of his hard earned money10 monthsbefore the show. That same week the tour plays a Wednesday night in Albuquerque, New Mexico. Who the heck knows what theyre doing on a Wednesday night 10 months from now in Albuquerque? The answers fall into three categories:

I dont.

Im one of the few passionate fans who will move my schedule around this show and give you my money ten months in advance.

Im a ticket broker, and Im buying bunches of tickets now to arbitrage and capitalize on all the people in #1 above.

This practice of ridiculously early sales has been expanded by the industry to bank money early, test demand, and reduce risk. Do they care that the best tickets go mostly to brokers, that fans pay more money than they otherwise would, and that the most passionate fans lose out on 10 months of interest on their money? Of course not. Were moving backwards.

The big question: Is all of this a calculated plan by the music industry to keep things as unfavorable for fans as possible, or can we chalk it up to sheer incompetence?

The recent Paris tragedy reminded us that the music industrys obligation to provide a better experience for fans are growing ever more urgent. The attacks on fans at a concert hall and a sports stadium were the manifestation of a longstanding fear we had at Ticketmaster about live eventscrowds are so much more vulnerable than we want to believe. We already learned this in air transportation after 9/11; 14 years later, we collect loads of data and restrict transferability of tickets between passengers boarding a 200-seat airplane. But with 80,000-seat stadiums, we continue to do almost nothing. With the use of cash, paper tickets, ticket reselling, and an average of almost three tickets-sold-per-order, upwards of 90 percent of individuals entering an arena or stadium can be unknown to event organizers.

The entire paradigm of music distribution is staring down the barrel of an evolutionary leap.

There are common sense solutions that would make live events safer for fans. By reimagining a ticket as a digital access credential replete with identity, payment, and location metadata, we could do the forensic work before and after events to identify bad actors. This need not restrict ticket transferability or resale; it simply means maintaining a centralized system of record where tickets can be sold and the data associated with buyers and sellers infinitely logged. Existing and emerging technologies, including blockchain, are candidates for handling this challenge. They can also prepare us for the dawn of virtual reality in live events, ensuring this technology becomes incremental and not cannibalistic to the artists live performance. To do so fully requires sunsetting the idea of a ticket as a piece of paper; identity and access can be tied to a phone, a card, or a fingerprint.

Guess what? This is precisely the course of technology across most consumer products today. Like other products, these advancements have the happy consequence of actually improving the consumer experience. This data can serve to personalize the live experience for each fan before, during, and after the event. It could allow artists to over-deliver on an experience for which they are charging astronomical sums, up to a year in advance. As usual, we fell way behind the curve in the music business. So maybe this is about incompetence over anything else.

Indeed, the entire paradigm of music distribution is staring down the barrel of an evolutionary leap. Twitter, like its many mobile social messaging peers from Snapchat to WeChat to Line to Instagram to Facebook, is really a direct-to-consumer distribution channel that could fundamentally transform the relationship between artists and fans. Katy Perry has 78M Twitter followers, Taylor Swift has 67M, Rihanna has 53M, and Adele, essentially without even trying, has 24M. Roughly half of the 100 most-followed accounts on Twitter are artists, and the technology is now in place for artists to commercialize their follower relationships by selling songs, tickets, and T-shirts directly on these platforms. Twitter led this effort; others followed suit. Its the fastest way to remodel the entire music industry. Any artist who pined for more control over the distribution of their art, as well as the artist-fan covenant, have the powers at their disposal to take command.

Which brings us back to what we learned this week, and this yearthat the biggest artists (including these stellar women who showed their might) have real leverage and real power right now. If they wanted, they could change a sedentary, broken industry. Conventional wisdom is that Adele is an outlier, capable of holding out for her own good but not much more. What if Adele, Taylor, and other elite artists united to force progress for all? Athletes in major sports leagues banded together. Actors held their own. So did screenwriters, directors, producers, and show runners. Music seems to be the only branch of entertainment where the collective voice of creators is mute.

The underlying driver of this silence is artist fragmentation. It is the key environmental factor upon which the 20th century music business was constructed: allow rare stars to extract their pound, but keep the bulk of the talent uncoordinated. Beyond the occasional telethon, its rare to find examples of artists working collaboratively for a cause at scale. Why is that? The leading culprit is that artists have traditionally outsourced a lot of their business decisions to their managers. Now that the time travelled from anonymity to stardom has shrunk to mere months, and artist-as-entrepreneur is a near requirement for success, the role of the artist manager has taken on increasing importance.

Sadly, management remains as fragmented and cutthroat as the days when Colonel Tom Parker was shepherding Elvis. In many cases, the speed to stardom brings along in its slipstream a relatively unsophisticated crew of hangers-on surrounding the artist. Cousins, classmates, boyfriends and the like, with little to no experience become entrusted with decisions that can impact decades of an artists revenue streams. Because most managers are paid on a percentage of the artists revenue streams, near-term money is usually prioritized ahead of long-term career value for an artist. Partnership and collaboration gets lost in fears and insecurities about acts being stolen away by other managers. Even the more sophisticated and professional managers suffer from the epidemic of the shark tank. Irving Azoff (Front Line Management) and Coran Capshaw (Red Light Management) are the two managers who have assembled artist management companies with meaningful scale. Ive apprenticed for them both, and they are excellent at what they do. But competition for the artists they manage (or would like to) remains high, and for their own business self-survival they are perpetually on alert. They do not operate in an ecosystem that fosters cooperation.

Music seems to be the only branch of entertainment where the collective voice of creators is mute.

Even the law works against artist representatives working together. California passed a law in 1978 called the Talent Agency Act that effectively says a person cannot be a manager and also book an artists tour. In practice, artists must carry both a manager and an agent, fragmenting the power of decision-making (and also the artists income). Entire cottage industries have been built on this church-state separation. Alliances are routinely built and broken between agencies and managers, further fueling the lustful competition and mistrust between artist representatives. One can surmise this is generally the scene that inspired the late Hunter S. Thompson quote: The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. Theres also a negative side.

Yet the opportunity for artists in the music business today is wonderfully beyond what even Thompson could have imagined (or hallucinated). And so it rests, finally, on the shoulders of artistsand the biggest ones, at thatto wrest control of this shallow trench of an industry away from those who have kept it in a state of morass, and give it depth. All that stands in the way of advancing the industry forward is overcoming the fragmentation within the artist community today.

And thats why Adeles eye-popping success last week is so confounding. Why, exactly, did she show her strength? The cynic will tell you it was for the money. But just as she could care less about what you think of her weight (somehow I dont expect the press to repeatedly address Chris Martins post-breakup body fat when the Coldplay album drops this week), she seems unmoved by the chance to make a few extra pounds. Which leads to the conclusion that like the rest of us, she falls somewhere on the scale between competitive and vain: She withheld her music from streaming services explicitly in search of setting a mark that none of her peers or predecessors ever did.

Having vanquished them now, will she flex her muscle for more than just the charts? She seemingly has willing partners in this effortin Taylor Swift and many of her now powerful female counterparts, as well as popular artists like Jay Z who have made recent business strides around artist empowerment. In so many ways, Adeles sales figures are less about her, and more a reflection of the continually crescendoing role of music in peoples lives.

In spite of all its dysfunction and fan neglect, our follower graphs on social networks hint that our accelerating interconnectivity is still threaded together most tightly by music. By following suit and binding together in this moment, Adele and the artist community can move the business and experience of music forward for all of us. As the Beatles knew: Come together, right now. Records are made to be broken. Adele and her peers have the chance to be indelible.

Nathan Hubbard is a former touring and recording artist, former CEO of Ticketmaster, and current head of commerce at Twitter. A version of this story was originally published on Medium and has been reprinted with permission.

Screengrab via AdeleVEVO/YouTube

from All Of Beer http://allofbeer.com/can-adele-fix-the-broken-music-industry/

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