Published Mar 19, 2008Gerd Leonhard has spent over 25 years in the technology and entertainment industries. In 2005, Gerd co-authored The Future of Music, now a must-read for music industry professionals around the globe. He is a digital media and internet entrepreneur; he is co-founder and CEO of Sonific LLC, a San Francisco company that provides music applications and widgets for blogs, social networks and online communities. His latest book, a collection of essays entitled Music 2.0, is available online at music20book.com.
How can artists use the new market to their advantage?
Every musician knows that you make money with your persona, your overall brand. That means that at the bottom of the food chain when youre just starting out, you dont make money, because youre not a brand yet. So the entire business of an artist is spent on building the brand. [On the web] its very easy for people to track you, to get feedback, to look at the blogs, to get an idea of who you are. So the top mission for a musician today, for a band or an artist, is to increase visibility in a way that gets the brand across, which probably means in many cases to give a lot more than before. Initially, you may have to give up free downloads and free streams and maybe free music for games, but when you climb up the ladder it completely flips, so that anything you do, you can make money off of. I would say that its very positive but its also very Darwinistic.
When is the critical point where an artist should move to a label?
I think that when you get to a certain point, a certain critical mass, then a switch to a larger entity makes sense. Thats where the labels come in. The idea of a label will prevail to some extent, like Bluenote or Motown or ECM these are brand labels that have their own life. In general, labels will become service agencies. Theyll say "We can help you get a deal with Nokia in Asia. When you merit enough attention, someone comes along and says, "Can we take you to the next level in return for a revenue share? But its strictly going to be based on a license arrangement. So you hire the agency, or they get 25 percent of your revenues, and you give them the right to represent you, and if it works out, you stay together very much like the Creative Arts Agency or William Morris.
If its not "how big is the advance? what are the major questions artists should be asking labels?
You should be looking for is an agency model right from the beginning. Giving away ownership also means giving away responsibility, which you dont want to do regardless of how much you may hate the idea of being involved. As a musician, unless you are on the very top you dont have that luxury anymore. As soon as you sign something away, the other person has free reign over what theyre going to do with you, and that could work out in some cases but in most cases it doesnt. So I would look for an agency or partnership agreement that says "Were going to split revenues as follows, I am going to invest this and youre going to invest that so that its clear who does what. Ultimately I wouldnt sign with anyone until I can see how they are pushing me to get more attention. Before too long there will be a flat rate for music thats part of a digital network, because thats the only solution for the problem of not paying, and it will feel like free to the user. Google has just recently launched a project in China where if you use the search engine, the music is free. All you have to do is log in, and you get ads pitched to you but the music is free. MP3s, downloads from all the major labels in China. This model will probably be pushed out to all the world because it makes sense to pay for the music on the network in that unobtrusive way. When that happens, and its inevitable, the only battle for the artist and the label is to get peoples attention so that as soon as they find you and know about you, they click and when they click you make money. You have to get them to click: thats the mission.