SnowAngelz: Canadian fans of David Archuleta

Count me in the camp that says good riddance to Jive! Actually I think everything is going according to plan and I would be far more concerned if the “big news” was that David Archuleta compromised his principles in order to increase profits for the label and manager.

That press conference during his Asia trip gave us a glimpse of the challenges David faced during his tenure with Jive, and for him to talk about the challenges to that extent tells me that there was likely a lot more going on behind the scenes.

The music industry is fascinating. I think that when industries are in such flux it is innovating thinking that leads the way. Hopefully David has advisors who are innovative thinkers. I found the article below by Jeff Price. He has a worked for a number of years in the music industry. Granted he does have a bias towards independent music since he owns a company catering to the artist. Nonetheless I think he makes some great points.

He writes the article from the perspective of an independent or alternative band but the concepts are easily translatable to individual artists.

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Arrested Artist Development
by Jeff Price
Sometime in the 1990s, “artist development” for rock and alternative bands, got turned on its head. Gone were the days of a major label aspiring to propel an artist over many years to “rock legend” with multiple releases, tour dates, interviews and in-store appearances (Led Zep, Rolling Stones, Springsteen, The Byrds etc). Instead, new artists were given six weeks from the street date of their debut album to have a radio/MTV hit.

If the first single from the album failed, the artist would typically get dropped; their career effectively over before it even began. This change occurred with the consolidation of the music industry under multi-national billion dollar companies (many publicly traded). Gone were the days of patience for a “return on investment.”

Instead, the world boiled down to revenues earned over the last 90 days. Shareholders demanded quick growth, the value of a company lived and died by what was reported and booked every quarter of the year. If the company invested $1 million into a band in January, it cared only about how quickly it could see its money back and how much profit would be made.

This get-rich-quick strategy helped destroy the value of labels and the careers (and potential careers) of thousands of artists. Before the record label consolidation, an artist would get signed, an album would get recorded, the release would get set up and distributed. The artist would tour as the label promoted the artist/album building up the fan base and credibility. The band would gain experience playing live, learn things in the studio and grow as musicians. About a year later, the next album would be released, this time to some anticipation by the existing fans, and the same cycle as with the first album would repeat – building, playing, learning, touring, gaining new fans – until the next album came out.

It was the artist’s later album, built on years of learning and credibility, that would go multi-platinum providing the final piece of the puzzle in defining them as a “legend.” Once at that status, an abundance of opportunities and wealth would arrive for many years to come via gigs, merchandise sales, advances and band and publishing royalties. The label would experience a huge spike in back catalog sales from new fans discovering and buying old albums selling as many copies of a catalog album in a single week as they did over the previous year. There were no label marketing costs directly tied to these catalog sales thereby generating huge amounts of high margin money for their bottom line.

Or said another way, the value of a major label like EMI (or make that Citigroup due to its recent acquisition) is not from one new Beatles’ album, it’s from the entire Beatles’ catalog. These older albums sell and sell and sell yielding huge financial returns that dwarf income made off of just one hit album. In the old music industry, the true monetary value for the record label and artist was in the catalog of created and released works – each song, album, EP selling a little (or a lot) each day, week and year creating a large and steady recurring and predictable stream of income (“recurring and predictable income” is the holy grail for financial institutions).

The shift to a new strategy of just six weeks to “have a hit or you’re dead” flew not only in the face of artist development but also in the face of long term financial gain while radically changing the way the game was played. A quick financial return strategy in the music industry could only be accomplished in one way, a mass-consumable commercial radio/video hit single. Bands began to be signed not for their current and future value, but for just the one hit they may have written. All label bets were placed on the one single as it was sent to radio and MTV with hopes of airplay, reaction and consumer sales. Radio and MTV gained massive power being the only outlets to allow this quick explosive growth, and the labels were willing to pay them whatever it took to gain the media exposure.

The music world went topsy turvy – debut albums became an artist’s best selling album with subsequent releases selling far less (Spin Doctors, BloodHound Gang, Alanis Morissette, Hootie & The Blowfish, Third Eye Blind, Better Than Ezra, Marcy Playground etc etc etc). Gone were the days of development, catalog and box sets; in their place came the world of “one hit wonders” whose value dissipated as quickly as it arrived. This is not to suggest that these bands or songs were good or bad, nor is this to suggest that the phenomenon of “one hit wonders” was not happening through the entire history of the music industry. What was different was the lack of bands being nurtured, supported and given time to grow and develop at the world’s largest labels.

Lawyers, calculators and quarterly profit and loss statements replaced the ears and creative passion of music executives like Seymour Stein, Ahmet Ertegun, Lenny Waronker and Mo Ostin. Bloated artist contracts were an additional side effect of this new get rich quick strategy – understandably, artists, lawyers and managers were demanding larger and larger advances on future albums as a major label would only exercise the option due to the previous album being a financial hit.

Percentages of these large advances went into the pockets of the managers and, in some cases, the lawyers, incentivizing them to take the money and run. Marketing spends went through the roof as the labels tried to hit grand slam home runs. Albums selling a few hundred thousand copies that were previously seen as a success were now redefined as failures. As more than 98% of the bands signed were not hits, the labels could not justify nor afford the huge advances previously negotiated and the bands were dropped, their careers stunted and ended before they even really began.

As this new shortsighted strategy progressed for over a decade, the labels woke one day and realized what they had done – for the past 15 years they neglected to build up a valuable catalog of work that people would continue to buy over a long period of time. The older “legacy” catalog of Pink Floyd still sold, but there was nothing taking its place, nothing being incrementally added – even rock legends die, taking their chest of musical riches with them to grave. This left only one option, buy even more into the new vicious cycle, do even less artist development, spend more money on marketing, invest more in videos, up advances, swing like mighty Casey at bat for that elusive home run and hope to god something hit.

Had there been more patience, less greed, less focus on next month’s bottom line the magnificence of the industry could have been perpetuated through its creativity. Not only would these media companies have been reaping far greater financial rewards, but the artists and the music fans most likely would have had a different view of the entire industry.

The good news is the cycle has been broken, artists no longer singularly need a label to have a career; there is now a choice. The lessons of the past combined with the technology and opportunity of today can quite possibly create a return to the true cultural and long-term financial value of music. Through new media outlets and social networking, bands and fans can connect in more personal and meaningful ways. Fans are now able to more directly and meaningfully support their favorite musicians over the long term enabling the artist to create a significant body of work through their lifetime. The control of a band’s career has shifted from the label to the artist – be it the path of Vanilla Ice or Radiohead, the choice, success (or failure) is the artists to make.

P.S. Where do you guys think David goes from here?