“There is no recipe. We can’t go to Universal, Warner Music, EMI, and Sony and say, ‘Here is the solution so you can stay in business.’ says Gerd Leonhard. There is an ecosystem comprising content owners, telecoms, advertisers, marketers, artists, and social networks that have to build the solution together.” Leonhard advocates a blanket license and a flat rate that users would pay for unlimited access to, and unfettered use of, digital music. This method, he maintains, would be one of many revenue streams that could support a new middle class of musicians who are not superstars but who can make a comfortable living in the new music economy.

The day following the conference, I met with Leonhard, who shared more thoughts from his latest book, Music 2.0, a series of essays about the emergence of a new music business model driven by the Internet.* He spoke at length and optimistically about the opportunities he envisions for Web-savvy artists who produce their own music and bring it directly to fans.

Out of Control
For the past 14 years, Leonhard has called for a reevaluation of the prevailing logic in the music industry that exercising complete control over the distribution and use of the assets in record label catalogs is the principal way to make money in music. In the digital era, that model is tanking. Leonhard stresses that computers and handheld telecom devices are essentially copy machines that facilitate the sharing of music, text, photos, video, and more on the Web. In his online book The End of Control, he wrote, “Let’s face it, in our increasingly networked world, the vast majority of media content simply cannot be kept away from its audience. Today in our world of Googles, Facebooks, YouTubes, and iPhones, all content is just zeroes and ones, and trying to prevent its ‘leakage’ is simply futile.”

Everyone knows that the vast array of music is accessible for free via “pirate sites,” software applications that harvest streaming music, and via other sources. Users freely download songs, share files, post songs on their Facebook pages, sync them with their videos and slide shows, and more. For copyright owners-especially the major record labels-the genie is out of the bottle, and litigation against users sharing copyrighted music without payment has yielded little more than bad press. The problem of making enough money to continue producing music is most acute for content creators, whose primary business has been to develop superstars that sell millions of records.

Leonhard has long advocated a shift from tight control of products and copyrights. In what he refers to as the “link economy,” the new commodity is the public’s attention. In this climate, he predicts superstar status will be much harder to attain-and sustain-as the marketplace experiences further fragmentation and mainstream artists compete for attention with lesser-known artists in specific musical niches.

“Thirty years ago, 72 percent of the television audience used to watch Dallas or Gunsmoke,” Leonhard says. “Now 7.1 percent of Americans watch American Idol on a good night. That’s it. There is no ubiquitous TV show these days because there are so many options.”

It’s the same in the music industry. It’s much harder for current artists to sell the number of records their predecessors sold simply because there are more artists out there, more competition for people’s attention. A look at the RIAA’s [the Recording Industry Association of America’s] top-selling albums of all time underscores the point. Vintage artists-including the Eagles, Michael Jackson, Pink Floyd, Led Zeppelin, AC/DC, and several others-dominate the chart. In the United States, the most recent album to sell more than 20 million copies is Garth Brooks’s Double Live album, and it was released in 1998.

Major labels and other repositories of valuable copyright properties may not be wild about the notion that products should take a backseat to audience attention, but they have noted the power of an energized fan base. Leonhard avers that musicians who fully utilize their Internet resources realize that they rather than their CDs are the product, and if they sell themselves properly, they will do well in the link economy.

“In the link economy, the product is the marketing,” says Leonhard. “If you want to promote yourself as a musician, you publish and make everything available on the Web so that people can pick it up and go elsewhere with it. If they like you, they do the marketing for you by telling others and sending links around. In the old days, if you were a star, MTV or the Letterman Show would recognize that by putting you on. Today, your fans recognize your value and send your links to friends, who send them to more people. This is what makes someone a celebrity on the Web. And you can’t buy that; you have to earn it.”

Today, the Web is flooded with content. Anyone with a computer can be a producer. Leonhard contends that this will ultimately raise the bar of artistic quality. “You have to be very good and very unique, and constantly innovate to get people’s attention,” he says. “There are 140 million blogs, and many new ones are created every second. We don’t pay any attention to a blog unless it is good. The same is true with music.”

Show Me the Money
So if musicians loosen control of their copyrights, what sources other than the proposed flat rate on Internet users for access to music could provide income? According to Leonhard, there is a $1 trillion worldwide advertising economy, and Google took in $27.1 billion of it last year. Projections are that in five years, Google’s share could rise to $200 billion. If licensing agreements can be forged with the powerful search engine, the fees could pay musicians for a lot of “free” content. “If Google was authorized to play on-demand music, someone could see my name and play my song,” says Leonhard. “Google would agree to pay a percentage of the revenue from every ad on the page with my song. The fee would be paid to a rights organization like ASCAP or BMI to be divided between all the artists whose music is played. Google can track everything that’s been played, so all artists could be compensated. The technology is in place to do this now. This system is currently being used in China and Denmark.”

It is important for agreements to be made sooner rather than later. When radio began broadcasting music during the 1920s, songwriters demanded a share of the money generated by programming featuring their compositions. ASCAP negotiated for compulsory licenses and radio began paying writers. But there was no provision at the time for a fee to compensate the recording artist if he wasn’t the songwriter. Even today, American radio stations, unlike European broadcasters, pay a fee to the composer or songwriter but not to the recording artist. Radio ad revenue currently yields about $20 billion annually, with the benefit of hindsight we can see that this was a missed opportunity. This situation should be kept in mind as new agreements are made. Half the world now uses cell phones, and a tremendous amount of music is downloaded to handheld devices. In a recent address at Berklee College of Music, Terry McBride, the CEO of Nettwerk Music Group, described the role smart phones already play in the sale of music.

“Musicians need to push for legislation to require issuing licenses for use of content on the Web,” says Leonhard. “Right now if you have a video that gets a million plays on YouTube, you don’t get a dime because there is no license or agreement. Through revenue share, every click, forward, download, [or] video play on the Web would get monetized.”

Fifty Ways
Too many musicians believe that playing gigs and selling CDs or digital copies of their music are the primary ways to make money. “We have to do away with that mentality, because there are 50 other ways a musician can get paid,” says Leonhard. “In the new music economy, you need to build an audience and energize them to act on your behalf and forward your music virally. Later, they can become paying customers. Don’t ask them for their money first. Once fans are sold on you, you’ll be able to ‘upsell’ them special shows, backstage passes, webcasts, a live concert download, a multimedia product, your iPhone application, a premium package for $75.

“When musicians start thinking of themselves as brands, like Nike, they will see that they have more assets than just the zeroes and ones that people can download. Other assets are their creativity, the way they express what they experience, their performance, and their presentation. As a musician and composer, you stand for something. The Web allows you to publish things that showcase who you are and what you do. In 10 minutes of clicking around on your site, people will be able to understand who you are if you’ve put enough out there.”

Even in a time when many have predicted doom and gloom in the music business, Leonhard is optimistic. “Current developments are good news for the artist-provided he or she is good. You have to be different, unique, and honest; have a powerful persona; and know your brand. If what you are doing is real and you are forthright, people will pay you. It’s all about the creator and the person who wants the music. Musicians of the future will do well if they can view themselves as more than someone who wants to be a star and sell a lot of records.”

1. Think hard about what you are all about and the message you want to relay to people. Are you the next hot guitar player or the new John Coltrane? Shape your image and message to support that.

2. Attract as much attention as possible. Performing live is a must, but you can set up your own radio station that allows people to take your music and make widgets, which are embedded objects like a YouTube player. Fans can then have-and distribute-your music by copying the player and putting it on their own site. The player actually sits on another site and links back to YouTube. That’s syndication. You want your music available for people to cut and paste and put somewhere else to play creating a syndicated viral system.

3. Put your photos on Flickr. Upload photos of everything you do, from band rehearsals to backstage moments to scenes on the tour bus. Just make sure they are authentic and convey your “brand.” The images don’t necessarily need to be high quality.

4. Write about what you do on a blog and publish things on Twitter. Set up your own YouTube channel. Fully exploit the Web-which is pretty much free-to create a large output. Offer everything for free initially.

5. Create applications that can be downloaded to mobile phones. Many bands have done this to create a personal window to their world on mobile devices. Be advised, though, that this avenue of music distribution involves some costs.

“This output becomes the foundation for your audience,” Leonhard counsels. “You’ll know pretty quickly if people like you. These efforts-coupled with live appearances, e-mail newsletters, and working the social networks-will help you build a fan community. Once you gain a lot of followers, those who are really hooked will help you do the rest of your marketing. This is the mechanism that will increase your revenue.”

Download Music 2.0 and other titles for free here.

“Amanda is not producing money out of thin air, or by swindling some people into buying something they do not want. She’s engaging her fans who are glad to be able to buy some merchandise directly from the artist. Secondly, she’s not a professional PR or a marketing professional; she did it by engaging her audience through the simple tools at her disposal.

Which brings me to my most important point: Twitter is just a tool in this case. Her 30,000 Twitter followers aren’t just people who she followed and then they followed her back; they’re not some random mass of people who just happen to be following Amanda Palmer. They’re her fans, which means that any artist who has fans can do the exact same thing. It’s not a one-time thing or a passing fad: true fans will always be interested in buying a t-shirt, attending a secret gig, or getting their record signed.

We’re still at a very early stage in the online music revolution. Soon, artists will have a multitude of tools to help them communicate with their audience, offer them extra value and, last but not least, make money.

Ultimately, we’re not talking only about replacing current business models; we’re talking about upgrading them; finding new, better business models. You think that the music business is fine as it is? It’s not. It scales awfully. It’s great if you’re hugely popular, but if you’re an indie artist, the big record companies don’t care much about you. As Amanda bluntly puts it:

“TOTAL MADE THIS MONTH USING TWITTER = $19,000
TOTAL MADE FROM 30,000 RECORD SALES = ABSOLUTELY NOTHING.“

These new tools, such as Twitter, will help the entire music business scale much, much better. Very popular musicians such as Radiohead will still make a lot of money. But relatively unknown artists, by promoting their work and selling stuff directly to the fans, using free or inexpensive online tools, will be able to make a better living than they do right now. The future might not be very bright for the big record companies, but it is indeed bright for the artists.”

Read more here at Mashable.

In a 2002 New York Times article, David Bowie said that “music itself is going to become like running water or electricity….it doesn’t matter if you think it’s exciting or not; it’s what is going to happen.” Now, seven years later, the music industry has continued its rapid metamorphosis. Often referred to as an industry in crisis, coming up Where We Live, we’ll be talking with writers and innovators who say the business of making music has never been better. Ignore the closed up Virgin MegaStore in cities across the country—listening to and making music is still big business. David Kusek, author of The Future of Music: Manifestor for the Digital Music Revolution joins us to talk about the new truths that govern the music world. Also, The founders of Pandora and TuneCore chime in and we’ll be joined in-studio by WNPR’s own Anthony Fantano. From the Connecticut Public Broadcasting Network.

When CDs came along in the late 80s, even though they were less expensive to produce, the list prices put them at $14.99 or more. Over the last 10-15 years, the street price has settled at about $11.99 or so, but of course lots of places sell them for more and less than that. Of course now CD prices are dropping in price to compete with digital downloads and they are often costing less than mp3s albums.

After the demise of the original Napster and the rise of iTunes, the $.99 a song model arose and somehow took hold. But in an era where many listen to music free from myspace.com or off of artists’ web sites and others file share, most working musicians are wondering how they will make a living making music when it’s clear you can’t rely on the sale of a physical product any longer.

Enter Amie Street.

Amie Street was started in Providence, Rhode Island on Amie Street on July 4, 2006 by Elliott Breece, Josh Boltuch and Elias Roman while at Brown University. They are now based in Long Island City, just across the river from Manhattan. Roman is the Director of Business Development and Operations, Breece is the Director of Product Development, and Boltuch is the Director Public Relations and Marketing.

The idea is that when a song is added, it starts free up to .98 and will go up in cost as demand rises up to a maximum of .98. Occasionally, shoppers who frequently recommend artists will also get credits from Amie Street, so it’s a bit of a buy back strategy.

The mp3 files are all free of digital rights management, or DRM.

Musicians receive 70% of the revenue from each sale.

Listen to the PodCast here.

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Native Folk Singer-Songwriter Atsiaktonkie (ah-jeeak-doon-gee-ay) will be donating half of the proceeds from all CD sales to the Akwesasne Freedom School, which without funding could result in the Mohawk language and culture diminishing completely.

“The children that attend Freedom School are the last chance for our language, culture, and history to stay alive,” says Atsiaktonkie. “Proceeds from CD sales will help pay teachers and make necessary repairs to the school. If Freedom School closes and doesn’t expand we could be faced with our way of life being lost forever.”

Akwesasne (the land where the partridge drums) is located on the St. Lawrence River in upstate New York. The school was founded in 1979 by Mohawk parents who were concerned that their language and culture would slowly die. The Akwesasne Freedom School is a Mohawk immersion school for grades pre-kindergarten through six and a transition school for grades seven and eight, which combines solid academics with a strong foundation in the Mohawk culture. The school is run by tribal citizens and supported by the Mohawk Nation government as an effective way to not only reclaim education, but also to maintain Mohawk language, history, identity, and sense of nationhood.

“We need to teach our children our language and culture to ensure that the next generation will have their ways and happiness,” says Atsiaktonkie. “The children are our future speakers, tribal citizens, and leaders.”

Atsiaktonkie’s “Four Wolves Prophecy” CD can be purchased locally at CKON Radio, The Bear’s Den, Nation Bookstore, Wild Bill’s, #9 Truckstop, Kanienkehaka Fuels on the Akwesasne Mohawk Reservation, and at www.atsiaktonkie.com.

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