Andy Edwards joins Connected Artists as Head of Digital
Guillemot’s manager Ed Millett joins Connected
Andy Edwards to run New Digital Division
Connected Artists, the Covent Garden based artist management company, has now expanded its artist management team by recruiting Guillemots manager, ED MILLETT. The band is now recording their third album for Polydor, following their Mercury Prize nominated “Through the Windowpane” and 2008 follow-up “Red”. Millett also manages Laura Groves / Blue Roses whose debut album will be released on XL in 2009 and The Blighters who are currently attracting A&R interest.
Paul McDonald, the head of Connected Artists, says “With Guillemots and James Morrison sharing the same label in Polydor, I have always heard good things about Ed. With Ed and David Boyd (ex Hut / Virgin M.D.) now in our team I feel we offer artists a varied, credible and skilled management team”.
Ed Millett says “I am excited by Connected’s vision of creating a variety of different models in which artists can thrive artistically and commercially. The key for me really is about flexible thinking and Connected certainly has that approach.”
Colin Barlow at Universal, now setting up his new Geffen imprint, says “I’m excited about Ed joining Connected. It feels like they’re building a really strong team with a great roster. It’s a management company I know Geffen will be proud to be associated with.”
Connected has also recruited ANDY EDWARDS in the role of Head of Digital. Edwards’ involvement with digital music spans 15 years. His career also includes stints at Sony Music and Music3w.com in addition to a longstanding involvement with the In The City Music Convention.
Paul McDonald says “Andy is the first part of a specialist digital / e-commerce team we are building here. This area is one where we aim to bring added value for our clients.”
Andy Edwards says “The Connected team have an outstanding track record, impeccable taste and an innovative approach to the management of their artists. Digital is now an essential part of the management process, but also a huge challenge”
Peter Rudge of Octagon, non-executive director of Connected (and manager of Il Divo, Anastasia and James) says “The Connected/Sound Advice group continues to evolve, and establish itself as the template for the entertainment company of the future. The vision for Connected is to have an empowered team of managers, working with and supplementing the great work and resources of labels, publishers and those involved in the live sector.”
Connected is associated with SOUND ADVICE, the legal and financial firms whose clients include Yusuf Islam / Cat Stevens, Pendulum, Paul Oakenfold, Stargate and Seasick Steve and emerging artists such as Little Comets and Alan Pownall.
Also working out of Connected / Sound Advice’s building in Covent Garden are Music Ally, Sellaband, Marc Picken’s West and Grafikmedia.
Azoff and Ticketmaster – the implications
Irving Azoff is probably one of the smartest players in the modern music business; if not the smartest. He is legendary and there is little point my detailing his achievements for those outside the music business unfamiliar with his reputation because so much ahs been written about him, if you don’t know the whole story … just Google him and follow your nose.
Suffice it to say that in recent times, he’s built the most powerful artist management company in the world and has subsequently leveraged this achievement to reach a ground breaking deal with Ticketmaster which sees Azoff installed as CEO, Billboard has the whole story here.
Bob Lefsetz has already given his thoughts on the deal here and here, but what I find interesting is the link between fan and artist and the role ticketing plays.
Worth noting in the Billboard article that “increasingly, ticketing has become the critical touchpoint and the keys to the kingdom in interaction between fans and artists. Ticketmaster and Live Nation both want to hold those keys, but ultimately they are in the artists’ pocket. The highest stakes going forward will be won and lost in artist relationships.”
Ticketing is important for a number of reasons.
First there is scarcity. The CD is always on the shelf (metaphorically speaking), the download is always available on iTunes … but tickets sell out.
Second there is trust – becoming more important as secondary ticketing comes under scrutiny with questionable websites offering fictitious tickets for sold-out shows. Who are you going to trust if you’re a fan? You trust the artist.
Third, there is the opportunity to add value and bundle. Selling VIP packages, premium seats and a chance to meet the band is one option. Cross promoting live recordings of the show, merchandise and other product lines off the back of the ticket sale add to the depth of the relationship.
Ticketing is the driver – more so than music sales (whether that is download or CD) - and the most fundamental offering in building the relationship between artist and fan. As Billboard says, “the keys to the kingdom”
The Value of Video
In the last issue of Billboard, Doug Morris responded to the assertion that “it’s been cited elsewhere that videos are bringing in $20 million per year” by stating “Not even close. Not even skimming the surface. It’s far more than that. Videos are very valuable.”
It has supported what I’ve long held to be true, initially based on gut feeling and over time underlined by various empirical sources from DSPs and elsewhere. The long tail that exists across digital music as a whole is – I feel – especially relevant to music video as there are relatively few other sources of obtaining many of the videos now legitimately available through iTunes, 7digital.com and elsewhere.
The top music videos on iTunes this week is a mixed bag. Chart hits such as Britney, Leona and P!nk at the top of the list; Michael Jackson’s classic video Thriller at number five, but at number six David Gilmour’s performance of Shine On You Crazy Diamond at number six. My own use of iTunes video store has seen me acquire long lost videos from Throwing Muses, Pixies, et al. Many of these videos I never even saw first time round as they were never played on TV. The long tail perfectly illustrated.
Music videos have also followed the same dynamic as the single track audio download in that they bring a previously bundled format to a broader audience. I would never buy a George Michael DVD, I’m just not a big enough fan to make that kind of purchase; but I absolutely had to have the video to Freedom, one of my all time favourites.
But what makes video especially compelling to the rights owner is the higher margin derived from such sales, most retailing at £1.89 rather than £0.79. Interesting to note Doug Morris’ other comment in the same interview “We don’t look at anything as promotion”.
Moving forward, I’d like to see rights owners further embracing video as a digital format. Long form video is now available on iTunes, which now includes full length movies (the original version of The Italian Job already synced to my iPhone); so we should also see a move to include both long form concert footage, documentaries and docu/ performance footage that might previously may only have been included as a DVD extra.
In The City - 2008
The In The City Music Convention is probably one of the most established and well regarded music conventions in the global music business. It has run every year since 1992 but this year was both important and poignant as it was the first event not to have the input of its co-founder Tony Wilson, who passed away last August.
ITC had to prove it can survive and adapt and it certainly did that. There was a mix of old school and new school; the legendary and the groundbreaking. There were artists and grass roots entrepreneurs/ executives mixing with the big players. Having Andrew Loog Oldham MC the event with Seymour Stein and Richard Gottehrer in attendance underlined the legendary; Eric Garland of BigChampagne underlined the new school and Jarvis Cocker’s songwriting keynote appealed across the board.
My role at In The City is to advise on panel and keynote content, reach for the address book and bring in topical and interesting speakers.
I was thrilled to secure legendary British born/ LA based marketing executive Ray Cooper to moderate the New New Marketing. I consciously went for a mix of people – major label, indie label, artist management, brand management. The room was picked with big players such as Jazz Summers, Tim Clark and David Enthoven, in addition to those starting out. The panel considered how do you market and break an act in the current climate and whether you can balance the books. Interesting that Mark Collen (ex EMI) felt that following the traditional major label marketing model you can’t; equally Natasha Kizzie of KLP laid a case for brands being able to offer an artist media value in addition to revenue.
Nick Stewart (The Captain) did an excellent job of moderating the All Rights panel – which discussed the concept of how a basket of rights can be assigned by an artist such that … to quote the panel … there are no record deals anymore.
The digital panels were all held on the Monday. We figured it would be good for panelists to work the room a bit also and connect with other digital music people there on the day. The digital buffet considered a la carte, subscription and ad-funded panels in turn; while the On The Storefront panel considered the artist website as a D2C model. To bring it all together, Ted Cohen hosted a wrap-up of the day’s events.
There were plenty of highlights. Maria Forte (the lady who struck the digital deals for Radiohead’s In Rainbows) and Vince Bannon of Getty Images gave good value to the a la carte panel; Nokia and Vodafone were both represented on the subscription panel moderated by Mark Mulligan; while Merlin and The Orchard sparred on the ad-funded panel, which also featured Anthony Lukom, the very smart and very eloquent MD of Myspace UK; Debs Wild and Gary McClarnan did a very funny role play to illustrate how even developing acts can make money through their websites; and Ted Cohen’s wrap saw ex- EMI Global Head of Digital Barney Wragg and We7 CEO Steve Purdham debated whether technology or business terms were to blame for the slow start to the legitimate digital music business. Overall, it was quite a feast. Pardon the pun.
On a personal level, In The City is especially poignant as it connects me with my roots. I grew up in the North West, moving several times but always within a thirty mile radius of Manchester. 1989 was the year I turned eighteen and left home. The year of The Stone Roses, Happy Mondays, Inspiral Carpets and their Cool As Fuck T-shirts (I still have mine), trips to Affleck’s Palace … and, most of all, the Hacienda. It all revolved around Manchester, a scene that grew in large thanks to Factory Records and Tony Wilson; whose legacy continues with the In The City Music Convention. Long may it last.
In The City - Digital Overview
In The City has probably had a longer and more committed association with digital media than any other music convention.
When I attended the inaugural event in 1992 there was a panel discussing “the future” which included the notion that one day music may not be sold in record shops; during the mid-nineties Interactive City was formed to give more focus to digital; and even as the dot.com bubble was bursting in 2001, there were panels and keynotes, including an entertaining interview with Marc Geiger of ARTISTDirect, to consider where we were all heading. Tony Wilson was an early and enthusiastic advocate of digital, not only championing digital within the ITC fold, but also launching a website music33.com on the premise that digital music should be cheaper – radical thinking then, which is commonly accepted now.
Just as the spirit of In The City lives on, so does the focus on digital which continues to be part of the fabric of In The City.
This year’s even at the Midland Hotel in Manchester, sees the digital panels taking place on Monday 6th October 2008 and we have been comprehensive in scheduling a series of events that considers the key talking points for digital right now.
The term D2C – direct to consumer – has found increasing resonance during 2008, the concept that artists can not only connect directly with their fans but also sell directly to them also. The On The Storefront panel, shall consider the key ingredients for success. The panel shall be moderated by Marc Marot, a prominent artist manager with plenty of experience of D2C, having previously run an early stage D2C artist website company and commissioning the first u2.com website in 2000.
Mark Mulligan from Jupiter Research wrote an interesting article earlier in the year which identified three distinct sectors of the digital market as drivers for growth: a la carte downloads; subscription; and ad-funded models. This formed the seed of an idea … which we have developed into a series of panels … The Digital Buffet – A Three Course Lesson to consider each of these sectors in turn.
Barney Wragg, the former Global Head of Digital, EMI and the first major label executive to do a DRM-free deal with iTunes shall moderate the a la carte panel; Mark Mulligan shall moderate the subscription panel and Paul Brindley from Music Ally shall moderate the ad-funded panel.
Overall, the quality of panellists is superb. We have senior executives from Sony BMG, Vodafone, Myspace, Nokia, William Morris Agency, Merlin, We7 and prominent individuals such as Ben Drury of 7Digital and Maria Forte, the lady who did the digital deals for Radiohead’s In Rainbows … amongst many other names. For a full list of names, panel times, etc click here.
Finally, there shall be a wrap up by Ted Cohen, to continue the dining theme “Ted Cohen’s after dinner get together”. Ted shall bring together key individuals from the day’s events to discuss the key findings of the day and the key trends in digital.
In The City - The Digital Panels, Monday 6th October 2008
The digital panels and sessions at this year’s In The City Music Convention; Monday 6th October at the Midland Hotel in Manchester
THE TRAFFORD SUITE 12:00pm – 1:00pm
THE DIGITAL BUFFET – A THREE COURSE LESSON
HIGH END - À LA CARTE
High quality paid for downloads, DRM-free either as single tracks of bundles. Can rights owners improve their margins online? How can they add value? Does anyone care about sound quality any more and will they pay for it regardless?
Featuring
Barney Wragg Former Global Head of Digital, EMI Moderator
Ben Drury CEO, 7 Digital.com
Vince Bannon VP, Entertainment Partnerships and Development, Getty Images
Graeme Ferguson Senior Vice President, Digital, Sony BMG
Maria Forte M40 Music
THE TRAFFORD SUITE 1:30pm – 2:30pm
THE DIGITAL BUFFET – A THREE COURSE LESSON
MID END – ALL YOU CAN EAT
Discuss the all you can eat models. For £1.99 per week (or thereabouts), you can have access to as much music as you wish, but you have to keep paying. How much will the consumer pay, for how long and what strings should rights owners attach?
Featuring
Mark Mulligan Vice President, Jupiter Research moderator
Tim Hadley PR Director, Omnifone
Gareth Currie Partner, Gulp! Marketing
Tom McLennan Head of Music, Vodafone
Tim Grimsditch Global Head of Product Marketing, Nokia Music
David Taghioff Vice President, Digital, William Morris Agency
THE STANLEY SUITE 2:15pm – 3:15pm
ON THE STOREFRONT
Artists can monetize from the beginning. You don’t have to be Radiohead or NIN to set up a store; many early stage acts that play ITC sell their own CDs and T-shirts at gigs, they just have to continue this process as they develop their career and make it an integral part of their website. How do they go about this and who do they need on their team?
Featuring
Marc Marot MD, Terra Firma Management Moderator
Neil Boote MD, Firebrand
Andrew Martyn CEO, Mubito
Raoul Chatterjee MD, Trinity Street
Andy Allen MD, Backstreet International Merchandise
Russel Coultart CEO, Digital Stores
THE TRAFFORD SUITE 3:00pm – 4:00pm
THE ITC DIGITAL SESSIONS
THE DIGITAL BUFFET – A THREE COURSE LESSON
LOW END - FREE
Music As Water: the idea of getting music out to as many people without punters actually paying for it. Can ad-funded models really work and will they gain enough traction to reach a mass market of consumers who don’t currently pay for music?
Featuring
Paul Brindley MD, Music Ally Moderator
Steve Purdham CEO, We7
Charlie Lexton General Counsel, Merlin
Anthony Lukom MD Myspace UK
THE ALEXANDRA B SUITE 4:00pm – 5:00pm
THE DIGITAL BUFFET – A THREE COURSE LESSON
TED COHEN’S AFTER DINNER GET TOGETHER
Ted shall round up the day’s events with discussion from some of the day’s participants, summarizing the key trends in digital music.
The Rise and Rise of 7 Digital
I stand by my earlier post that the fact iTMS is built into the iTunes player gives it a substantial advantage over all other competitors and in terms of dominance of the overall market. That, I feel, is set to continue. But that is not to say that other competitors won’t care out a significant market share for themselves, but that might not necessarily be an established name.
If there has been one surprise in the digital marketplace over the past few years, it has been the rise of unassuming and plucking 7 Digital, a UK based digital music company formed early in 2004. Bigger names such as Napster have run into difficulties and traditional music retailers such as HMV and Virgin (now Zavvi) have yet to make a mark in the download sector.
Ben Drury, the co-founder of 7 Digital is not only one of the most quoted and quotable people in digital media, he is probably one of the smartest. He’s succeeded in achieving one of the most difficult things to do in business: to launch a company from scratch, initially self-funded, into a fiercely competitive market with low margins and where many bigger players have foundered. He has also won over all the major record labels, making 7 Digital the first company to offer a store that is 100% mp3.
Part of 7 Digital’s recipe for success was an early focus on B2B, they built download stores for other people, which initially were acts signed to major labels. It enabled the majors to offer both promotional and paid for downloads, dipping their toe into the market and … cleverly … it enabled 7 Digital to build a bridgehead not only with its (fiercely conservative) suppliers but also with consumers i.e. “Powered By 7 Digital” was the tagline along the bottom of all the artist stores. The 7 Digital branded store came later.
The B2B formula has also been extended to brands that want to run premium download offers, in addition to its label/ artist business; a store for unsigned acts to monetize their repertoire (much needed) in the shape of indiestore.com and the 7 Digital branded store. The combination of a low(er) volume, high margin B2B business enabled growth and cash flow to launch and sustain a high(er) volume, low margin B2C business.
With the formula established, outside investment now secured and growth into international markets, 7 Digital’s unassuming success is set to continue.
My only bug bear – and I did bug Ben about this the other evening – is that I hope they make all their video downloads DRM-free too. I want to get those Grace Jones videos I bought a while back on to my iPhone!
Labels Applying Outdated Logic to Single Track Downloads (Part 2)
Today in 2008, thanks to the single track download, the singles market on both sides of the Atlantic is booming. To give some indication of the strength of this boom, prior to the launch of iTunes, 8.4 million singles were shipped in the US during 2002; in 2004 this jumped to 146.0m and by 2007 grew to 813.1m (source: Music Week; RIAA).
In some instances, the single has become a profitable format again (for various reasons singles had previously been loss leaders – but that is another history lesson). The fact remains, however, that single track downloads alone are not sufficiently profitable for record labels that still bear the bulk of the investment in developing and marketing a new act.
The problem is that some labels are resorting to old practices to sell albums: i.e. deleting the single, therefore forcing the consumer to buy the album instead. It might have worked ten years ago, but consumers have wised up a lot and they now have plenty more options available to them.
Consumers are also more demanding and wanting to hear more singles before committing to buying an album, which perhaps explains why so few debut artists in the UK have made it to platinum status so far this year, see my previous blog here.
So why have some record labels returned to the 90s tactic of deleting the single? There have been a number of examples recently where a label has deleted a high-flying single to try and divert consumer attention to a faltering album. In some cases it seems to work, album sales go up … but the tactic seems rather tired and out of step with the times. Why antagonise the consumer when they are much better informed, have much more options and are far more discerning? Surely it would be better to focus on upselling these consumers to a bundle or mini album, future singles and so on … to eventually “Complete My Album”?
Interesting to note Richard Griffiths of Modest Management (former President of Epic Records US and former Chairman of BMG Europe) quoted in Music Week last week as saying in reference to this practice in the 90s “We (the labels) were stupid. Retail kept bugging us not to kill off the single, but we were smarter so we said people had to but the album, but that was at a time when every year we could put a dollar on the price of an album and not think anything of it.”
Record labels need to innovate the manner in which they up-sell consumers from a single track download to an album or other bigger ticket purchase.
Labels Applying Outdated Logic to Single Track Downloads (Part 1)
The problems the recorded music business has faced in recent years probably began not with the birth of Napster and the era of file-sharing; but almost a decade earlier. In the early nineties, a bullish industry fuelled by the seemingly invincible rise of CD sales sought to manipulate consumer demand for the industry’s own purpose and profit, paying scant regard to the needs of the consumer. The singles market was on such example.
In the UK, this would involve going to radio with a single, building up a buzz and demand but holding back on releasing the actual single for as long as deemed necessary (some times as long as 6 weeks); then releasing the single at a heavily discounted price during the first week (say £1.99). The single would chart, hopefully at number one, and then in the second week retailers would increase the price of the single to £4.99. When compared to £12 approximate pricing for an album, the £4.99 single didn’t seem quite so attractive, so the pattern would be that album sales would grow off the back of a successfully charted single.
Not only that, but the single – now perceived to be ludicrously priced by the consumer – would drop down the chart, thus disappearing from retailer’s racks, eventually to be deleted; meaning the poor music buyer had no alternative but to buy the album. Album sales would grow even more.
In the US, the record labels didn’t even go to the trouble of releasing a single (or if they did, it was a token amount). Their singles chart had a heavy airplay component, so the chart in the Billboard Hot 100 didn’t even need the track to be released as a single. Consumers had no option other than to buy the album.
All of which would be fine, if the album was what the consumer wanted. But in many cases they didn’t. They just wanted the track they liked. To add insult to injury, some albums were either not very good or full of other tracks the individual consumer neither liked nor wanted.
Politicians sensing an easy win jumped on the bandwagon. In the early 1990s Labour MP Gerald Kaufman launched an investigation into CD pricing, which was lampooned by the trade press as a “Kangaroo Court”. Kaufman’s argument was flawed – the CDs themselves were not overpriced; but he did tap into a general mood that consumers were being ripped off.
The introduction of first Napster and then other P2P applications tapped into an underlying desire of consumers to acquire music on a per track basis. This was eventually legitimised and popularised by iTunes Music Store and other legitimate download services. The result? The singles market, one moribund, was now full of life again and continues to grow rapidly.
The trouble has been, album sales have declined rapidly and single track downloads alone are not sufficient to replace to the revenues lost from falling CD sales. So what do record companies do next …
The Rise and Rise of iTunes
With the launch of iTunes 8, it is interesting to reflect of the extent to which iTunes Music Store has dominated the download market thus far. In spite of label’s best attempts to encourage competition in the download market (i.e. initiate DRM-free deals elsewhere in priority to iTunes), the fact remains that iTMS dominance over the a la carte download market shows no real sign of receding.
No matter how many big players now come to market with download offerings – whether it is Walmart, Amazon, HMV, et al – Apple will continue to have a unique competitive advantage over everyone else in the download space. That is, vertical integration with the most popular application for playing digital music – iTunes – and the most popular device (portable or otherwise) for listening to digital music – the iPod.
The fact that iTMS is built in to iTunes, which in turn syncs to the iPod is such a huge advantage that I suspect not even the might of Walmart or Amazon shall ever overcome, certainly not within the a la carte space.
Mobile phone operators may provide substantial competition to Apple in terms of devices. Sony Ericsson’s Walkman Series and Nokia’s N-series phones are two examples of music devices that have found some level of consumer acceptance and are gaining traction. Where these competitors are weak, however, is in the strength of their software applications whose primary purpose is to load music to the mobile phone rather than be an application to organise and play music collections in their own right. This is what sets iTunes a part.
Ultimately, iTunes is a browser for digital music collections. Just as in the browser market, one browser dominates (Internet Explorer), so too iTunes is the dominant browser for digital music. Imagine a scenario where Microsoft owned not only IE, but also a transactional store to facilitate the purchase of anything on the web – whether it is books, CDs, holidays, etc. The user experience would be superior and seamless; but what would the competition authorities say of it?
It begs the question that as the digital music market continues to develop and if – as seems likely – iTMS dominance will also continue, whether Apple’s vertical dominance of digital music retailing, software application and devices will face a legal challenge? If that were the case, what would be the likely outcome? Would iTunes be opened up, such that any digital music retailer could sell music via iTunes? That the iTunes homepage would become a selection of retailers who would compete for consumers purely on the strength of their merchandising selections and customer service? Would Apple still be able to take a piece of the retail pie?
This is all a bit fanciful, but does beg the question … unless, of course, Google are planning a music application and store any time soon?