Tuesday, December 9, 2008

Classical Music After the CD

The Past


In the 20th century, recording and distributing music was an economically viable industry. It satisfied the needs of the consumer (to have access to recordings of artists and repertoire) and it compensated the performers, composers, labels and distributors for their efforts.


For classical artists and ensembles, recordings served many purposes. For the most popular performers recordings could provide significant income. For others the income was secondary to the promotional value of being recorded. The best artists and ensembles were recorded. The more frequently you were recorded, the more prestigious the label and the more well regarded the accompanists the more money, status and promotional value the recording created. Recordings served as a proxy for the status of the artist or performer. Whether the recording created the status or the status created the recording was unclear but the two came as a pair.


The Present


The Internet and attendant digital technology has fundamentally disrupted the recording industry. Today anyone can make an infinite numbers of copies of a recording and can share those copies with anyone else at no cost and with little or no effort.


Technology has no ethics. It may be wrong to copy a recording and share it but you cannot base an industry on a presumption of moral behavior. Even if a significant number of industry participants follow the rules, a large percentage will not. The practical, social and economic difficulties of making the industry work are insurmountable when a large share of the revenue vanishes and the moral minority who play by the rules are constantly confronted by the reminder that others do not. Attempts to legislate or to litigate proper behavior have completely failed. There is no practical and/or scalable way to enforce the desired behavior. The 20th century recording industry is dead.


The Future


The remaining 3 “major” labels – Universal, Sony and EMI - will be out of the classical business within 2 years. They will create no more than a handful of additional classical CDs. With the possible exception of a few “crossover” artists the labels will drop all of their classical artists. The majors will focus on trying to salvage their pop business and will abandon classical because it is more trouble than it is worth. The 20th century recording industry and business model is obsolete. It will soon be gone.


The remaining viable classical label will be Naxos. Their costs are dramatically lower and their business model allows them to operate profitably in a smaller industry and with much lower sales numbers. A primary contributor to Naxos’ lower costs is the fact that they don’t pay any residuals to the performers. There is no income potential for performers in the Naxos model! They will profitably produce CDs for several years longer than the majors.


There will be a small number of “vanity” labels left but their volume will be microscopic and they will operate on the same financial model as Naxos. They will ultimately disappear as well.


Virtually the entire recorded history of classical music will vanish from the world. None of the pre-2000 material had digital rights cleared when it was recorded and the cost of clearing these rights now dwarfs any income that could result. There is no commercially viable model for reviving this material.


Music will still be recorded but it will have to be recorded very inexpensively. Cost considerations will dictate that music will be recorded live and music will be distributed “raw” – without the extensive engineering designed to make it “perfect”. This music will capture the excitement of live performance and the audience will expect character, excitement and imperfection rather than the homogenized perfection of the studio recordings of the past (This is a big issue for many performers - Get over it!). Live recordings will completely replace studio recordings, new recordings will completely replace old recordings, the shelf life of (most) recordings will be brief, fresh recordings will have maximum value to the audience.


Payments to everyone involved in the recording of live music will be reduced or eliminated reflecting the repurposing of recorded music. When recording was a revenue generating industry it made sense to share that revenue with all participants. Now it is a brand building and audience development industry. The value of brand building and audience development is shared by all participants. Recording and distributing live performances preserves, sustains and enhances the brand equity and commercial viability of everyone involved. Each paarticipant benefits from the value created.


Everyone will have an internet connected home theater. Webcasting live music into the home will still retain significant economic value. The audience will pay either through subscription or pay-per-view models. Live performances will be perceived as an “event” rather than a recording. Reaching a broader audience through webcasting will be a critical strategic component of any 21st century performing arts organization.


So – where does this leave the classical world?


The 3 Laws of Classical Music in the 21st Century

  1. Money will be made by performing, by donations, by sponsorships and, in some cases, by endorsements.
  2. Recorded music will have no commercial value other than promotion. It is not a tool for revenue generation – it is a tool for brand building and audience development.
  3. Every download and every stream of recorded music increases the promotional value of that music and increases the brand equity of the performer and presenter. It does not cannibalize recording revenue because there is no recording revenue! It does not cannibalize ticket sales – it enhances ticket sales by enhancing brand equity and building audience demand!


A Plan of Action


As the performers and presenters watch the recording industry melt away under them – what should they do!

  • Recognize that the CD is dead. Recognize that there is no direct revenue to be made by recording. Act now!
  • Be an artist/entrepreneur! The 21st century artist, performer or presenter cannot focus on the art and let someone else worry about the economics. Promote yourself tirelessly and broadly.
  • Get your music recorded, put on the net and make it as widely available as possible! Stream it! Download it! Put it everywhere you can. The promotional value of recorded music will no longer rest on the prestige and promotional engine of the label. Instead the promotional value of music will lie in how broadly it is disseminated, where and by whom. Every time your music touches the public it will enhance your brand awareness and your economic value as a performer.


There is a lot of denial in the classical music world. Performers still believe that a CD represents a badge of honor. They can't let go of the obsolete recording business model. They cling to the fantasy that there is intrinsic value in recording and that they should be additionally compensated for the recording of a live event.

This is toxic thinking!

It prevents us from confronting reality, from making a plan to deal with reality, from moving on and succeeding in the 21st century. It prevents the industry from adopting a business model that will assure its survival. It wounds us all. Living in the past can assure that classical music shares the fate of the US auto industry.

Don’t fight the future. Embrace it. Adapt to it. Make the future your friend!

42 comments:

ninaflute said...

Great analysis. Thanks for saying what no one wants to hear even though we all know it is true. This is exactly what I have been trying to do by producing and promoting my unedited, raw recordings through instant encore, youtube, and my own website (www.REALFLUTEproject.com). Everything I do is new and has no precedent, so I don't really know where this will take me but I clearly feel that I am working toward the new model you describe. I'll report back in 20 years and let you know how it all plays.

-Nina Perlove
flutist and instant encore partner member

bcom said...

Bravo!

We at the Bard Conservatory are working to educate our students, making them aware of these new realities. Gone are the days when you won the Van Cliburn/Queen Elizabeth, got a DG contract, and then essentially had a job for life.

I think the greatest example of this is the ensemble from Grand Valley State University in Michigan. They worked for months (a year?) on Steve Reich's Music for 18 Musicians, released it online, and it went viral, making Alex Ross's Top 10 list for 2007.

If Grand Valley State University had walked in the doors at Sony and asked for a record contract, try and guess the response! And in their single story, we see the way things are headed...

AlanB said...

The transparent nature of this article is such that it almost requires no comment, yet I feel compelled to respond, if solely to provide another viewpoint.

There is no question that the delivery method of recorded classical music is changing. This is not news and nobody will dispute this fact. iTunes controls roughly 70% of the download market. Classical downloads represent 12% of all iTunes sales, while classical CDs are only 3% of overall CD sales. As generations change, so too will purchase habits and delivery methods. I stipulate to this fact.

Also, it is not news that classical record labels are struggling under the old business model. The artist does not generate much profit after expenses, if any at all, on the direct sale of their recording or download. I have been educating about this for several years now as evidenced by my lectures at the National Flute Association Convention and the Kneisel Hall Chamber Music Festival among others. Every artist or potential artist I have worked with over the last 5 years understands this and has been materially affected by this fact. Frankly, this is true of most record labels (including majors) and readers might be surprised by the major names who participate financially in the production and distribution of their recording.

The primary function of a record label is to provide distribution and marketing of recordings. While I do not agree with your theory, let’s assume for the sake of argument that record labels will not be able to sell enough product to cover their distribution and marketing expenses. Rather than go out of business, they will simply become service companies and charge artists an amount that covers expenses and provides a small profit. Artists are already paying for production costs, and often for distribution costs. The label will continue to provide these services.

You call for artists to become entrepreneurs and handle this on their own. Any successful touring artist does not have the time navigate the various download services and their interfaces. There are nearly 20 legal download services with different entry forms and file upload procedures. Artists do not have time to establish relationships with trade magazines and reviewers in order to generate press. A record label (along with their distributor) services more than a dozen download websites, and approximately 200 radio and press. Successful artists will continue to engage this service and we will continue to be in business whether by the name “record label” or “record service.” This is not a prediction of the future, but a reflection of the present.

You state that recording will simply be a brand building and audience development industry. In the Grand Valley example that the previous poster references, they achieved brand recognition. What is wrong with that? No, they did not require a label. I am not arguing that everyone does, and an artist must have a label to be successful. But, the volume of my business tells me that artists are still finding my services valuable. Not every person needs a Mercedes to drive to work but they are available if you so choose.

Higher brand recognition and larger audiences results in more bookings and higher fees. Most artists will report to you that recording is ultimately profitable for them, just not from direct sales of CDs or downloads.

The largest flaw in your argument is not how recordings will be distributed, but how they will be made. Frankly, I was struck by the lack of knowledge in these statements.

First, many people who have never made studio recordings fall back on this argument that they are “homogenized” and “perfect.” By the very nature of art, they cannot be perfect. I can refer you to two competing books about temperament that will disagree on the definition of perfect intonation. Tell me, what is the exact metronome marking that corresponds with “Allegro?” When you see a fermata sign, does that mean hold for 2 extra beats, or 2 extra seconds? All of these are, of course, rhetorical. There is no correct answer, therefore perfection cannot exist in recordings because it cannot be defined. Every artist has a different and unique approach and recordings provide a window into that interpretation.

Secondly, any artist who has worked with a great producer will tell you that they have felt a certain freedom, an ability to safely take musical chances resulting in a recording that can actually be more exciting than a live performance. An artist might try a tempo faster than they would perform in public, knowing they have a couple of chances to get it correct. Or, they might play that pianissimo passage extra softly, realizing that they do not have to project to the back of the hall creating a magical moment that can only take place on record. Any musician who says that studio recordings are safe and boring has never worked with the right producer.


Your “3 Laws of Classical Music in the 21st Century” are very well stated. I cannot disagree with any of them. However, I don’t see how you make the leap to the end of record labels and live recording only. Before the CD was the vinyl LP. At some point, all labels had to switch over the CD. As time goes on, we’ll complete the switch to data files and internet downloads, as we are already doing in increasing numbers. I think your issue is really with the retailer, not the record label. Instant Encore does not compete with Azica Records, it competes with Border’s.

How do you make the leap from new distribution models, to live recording only? Because of the expense of recording? Artists will not “Get over it” as you suggest. They will not accept that every performance that they give in a 500 seat hall will be available forever, around the world, for public consumption and discussion. An artist spends their life in pursuit of perfection that is unattainable live. However, a commercial recording represents an artist’s stamp of approval. Essentially, when they release a commercial recording, they are saying “Here is the best representation of how I approach and perform these works of music.” They are creating a body of work over a lifetime that represents unceasing study and practice. Every artist has off nights- if it becomes routine that an artist’s every performance is disseminated on the internet, then the result will be safe, cold performances. Artists will fear making a mistake- talk about homogenized performances. Audiences will be unhappy and attendance will go down. Perhaps it is releasing live performances that will result in the death of classical music?

The exception here is orchestral recording, where the labor costs of closed sessions are exponentially higher and out of reach for almost everyone due to labor union contracts. Payments to any artist for live recording do not exist except in the case of orchestras where they are paid at a much reduced rate.

You may point to the success of a handful of live recordings. As I’m sure most readers know, most “live” recordings today are made from edits of several performances and perhaps even a patch session or rehearsal. You may think this is “cheating” and suggest that it is dishonest. Again, bottom line is that no musician can perform perfectly. If you are not a musician, and you doubt this, I urge you to pick any page of text. Read this page of text interestingly and dramatically, so that someone else nearby might want to listen. You’ve been reading since childhood but I’ll bet you stumble over a word. Or, one of your inflections is odd. If you are able to focus more closely on a couple of sentences, and perhaps repeat them a couple of different ways, you’ll be able to create something you’d love for others to hear.

Why would you want to deny artists this same opportunity? Why shouldn’t we want artists to be able to control their own intellectual property and represent themselves in the way that they want? On your blog, you use a professional photo. Why not a candid photo taken randomly at a party? Simple- you wanted to control and present an image. Did you spell-check and proofread your blog post, or did you simply write it from beginning to end and then post it without review? Again, these are rhetorical. Artists deserve the same considerations.

Concerts, and live recordings of these concerts, are two completely different entities, and it is fallacy to believe that a live recording accurately reproduces the experience of the live concert. It simply is not true.

In my experience, artists do not believe that a CD itself is a “badge or honor.” Anyone can self record and make a CD on their home computer and send it out to be manufactured. But, when they make a professional recording that accurately represents their interpretation of a piece of music, and presents an image that they wish to project, they most certainly consider it a “badge of honor”. It has nothing to do with the label or the medium. They simply want to be represented in the best manner possible through high quality recordings. It really is that simple.

I can tell you from this record label’s perspective, things are bright. Azica Records will be releasing our 100th record very soon and 2009 looks to be a banner year both in the number of releases and the quality of artists. We actively pursue new artists and they actively pursue us. We are distributed in every retail outlet as well as every download service on the internet. Our records get recognized for their musicality and passion as evidenced by consistent positive reviews. In fact, Instant Encore thought so highly of our product that we were your first partner and provided both musical content, and facilitated agreements with Azica artists for your launch in 2007.

Alan Bise
Producer
Azica Records
alanbise@msn.com

Jerod said...

Mr. Stensrud,

The entire premise of the fine arts is for one to refine their art. An author will edit their writings. A painter will paint over mistakes. A violinist will practice until perfect. A composer will rewrite an entire movement. A director will reshoot scenes. An audience will seek the best performer. An audiophile will seek the best recording.

As a composer, I will never lose my impulse to refine and preserve my creations. I am constantly historically aware, and I will always seek the opportunity to make the finest recordings for posterity. It's as natural as seeking food. Whether or not my recording appears on a CD is mute, as long as the recording is excellent. But I rarely, if ever, experience a live recording of new music that is fit for the commercial market. Quite simply, I want the best product out there to represent my abilities as a composer. I will no more give up recording sessions, as Hollywood will give up the cutting room floor. Try telling Hollywood to present and sell unedited movies and see what reaction you get from directors and audience alike. InstantEncore is a very useful and wonderful tool, but it will never fulfill nor replace any artist's fundamental desire to produce an excellent recording. I am confident that this feeling is shared with every fine artist I will ever meet.

Being angry with your parents does not mean you don't want parents. Being angry with SONY does not mean artists don't want great recordings. This desire will never go away and, by confusing these issues, you will fuel a misdirection of anger and a set of completely unnecessary hypotheticals (i.e. you will succeed at unnecessarily pitting classical musicians against classical musicians - the last thing we need).

If your mission of replacing produced recordings with live-only recordings comes true, does this mean orchestras and chamber groups will (or can) compensate with more rehearsal time? The standard number of rehearsals slated for new music premieres is about two - due to completely legitimate financial constraints. If the recording industry goes away, are we going to step up to the plate and consistently create record-worthy performances? Hmm. Would be nice, but who's going to pay for that? You? Not so straight forward, is it?

I'm concerned by your possible editorial influence, considering your biography. Being a genetic engineering enthusiast or hobbyist does not make one a genetic engineer. Even Sergei Diaghilev, one of art's most important historic figures, did not have such pretense about the very art that he managed. I wonder if you even understand what I just said.

I think your motives are clear anyway - you want our market and, for that to happen, you think you need the recording industry out of your way. Your intent is not artistic. It's business and it's obvious - a professional wolf in sheep's clothing. At least have the courage to be honest about it. "There is a lot of denial in the classical music world. Performers still believe that a CD represents a badge of honor." In my experience, revelations like this come from saviors like you only because they want something from me.

Try applying your statements to the Tour de France, the US Open or the Olympics and see how far you get. Michael Phelps inspires me to compose better and achieve more because he won the Olympic Gold Medal - not a pool party award on YouTube.

Glib statements, such as yours, are very unfortunate. I can only imagine teaching a lesson in which my student announces to me: "I have decided not to practice this week and to not be prepared for my lesson. I have decided that my lessons are now actually my practice sessions - I am redefining our lessons. Get over it."

I wouldn't waste my time getting over it; I would immediately discard such a contemptuous novice.

Jerod Tate
Classical Composer
InstantEncore partner

Sarah said...

Speaking as an "audience" member -
"Everyone" will have a home theater? Really? In the next few years? Hopefully people will have HOMES. All of this technology costs a lot of money. I would much rather continue to purchase CDs and spend more money for live performances.

Sarah said...

I wish that someone would do a little research beyond the "big 3" and Naxos to find out there are other small labels that have made a commitment to recording classical music.

Oh, and to set the record straight, Grand Valley did indeed have a label. They released their recording via the Innova Recording label of the American Composers Forum.

innova recordings said...

Hello there--like Sarah said,
innova recordings the label of the American Composers Forum released the GVSU record.

Don't usually correct posts, but we worked hard on this record, and just wanted to set things straight.

For more info check out innova.mu
Best,
CC

cguerin said...

When it comes to recording orchestral music, the real problem has been the AF of M's ridiculous demands for compensation, which persist to this day. This is why the major labels have rarely recorded American orchestras in the past decade, preferring European ensembles. Musicians have been their own worst enemy. And the loss of the marketing value inherent in recordings has negatively impacted the box office. Recordings should be seen as souvenirs of the concert experience, and the technology exists to sell concert recordings within minutes of the final bow, or to post them online for download/purchase almost immediately. Reasonably priced (2 or 3 dollars), they would sell like hotcakes, but that is impossible because of union demands for compensation.

Erick said...

I think all view points expressed here have some valid arguments, but one thing I just want to add is how difficult "predicting the future" can be in this situation.

The Classical music recording industry, at its simplest, is basically a combination of three different aspects. Art, technology, and economy.

As far as art goes, I don't think anyone can really say exactly what the future will bring when considering taste, what aspects of classical music will become pop culture again and what won't. If you asked me who would have won the last "Americas Got Talent", I would never have guessed the opera singer... but he did. I know this one example is fairly insignificant, but it does illustrate that anything is possible. Perhaps people smarter than I have come up with graphs showing a correlation between mass acceptance of an art style and sun spots or some such, but who knows?

As if that weren't enough, now we get to add technology and economy into the mix. While Moore's law initially describes the advancement of the number of transistors that can be put on an integrated circuit, it has found to be applicable to most every aspect of technology that stems from that. It has exponential growth (doubling every two years or so?) meaning as time goes on our technology changes and enhances more and more. So, simple right? As the years pass, our medium for processing the art changes, is improved, grows.

Now for the economy, its cyclical. If our economy had a predictable, exponential growth similar to Moore's law, it would be so much easier to say... here is how we will listen to music and here is how we will pay for it. But its not, we have highs, we have lows. Sometimes we can pay for things, sometimes we can't. If you take a tangent to our current position on this curve, yes... the future looks bleak. But things will turn around, we will once again be able to fund studio sessions and pay artists. I don't know when, but at some point in the future, it will happen.

I think its great to have outlets such as InstantEncore and other online music retailers to compliment music labels and physical CD sales. Options are good, they need to be there for people to take advantage however things are in the present, but I don't think its quite fair to say - in absolutes - here is how things will be ten years in the future. Business practices may change in the short term to accommodate the economy, but as it runs through it's cycle, they will again adapt.

The viability of CDs, or whatever the current physical medium for distributing music at any given time, will depend on what is popular, what the technology is to record and release it, and how much it costs to do so.

Considering JUST the economy, yes... things are going the way you say, but ...who knows? There might be some break through in recording technology that makes it trivial to record and edit music with a high quality result. There might be some huge shift in popular music that brings classical back into the main stream, encouraging consumers to spend money on them. There might be some huge economic shift that once again makes it possible for people to throw large amounts of money into the arts again, even if its not in the main stream.

I enjoy the discussion and reading the different sides and predictions. We'll see what happens.

mitrich said...
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mitrich said...
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mitrich said...

Lets see if this thing works this time, it did not a couple of minutes ago.

irst, thanks to Sarah and hey to "CC', and say hello to Philip for me.

I am not in the music profession or business in any way. I am a serious music fanatic and a PubRadio zealot.

I buy mp3's at Amazon. They are cheap, especially in the larger compilations; the kbit rate is high, generally 256; the downloader is slick.

Amazon proves the "long tail" is alive and well. I bought Nancarrow, Partch, Antheil, and Varese just to name a few.

For textual material I use All Music Guide and Wikipedia.

All this stuff goes on each of my three HDD's, and one of my 120 gig Zunes.

What's not to like?

Jeff said...

Everyone blamimg the "AFM's demands which persist to this day" are so clearly out of the loop, as is Bill Stensrud, to an extent.

North American orchestras are already moving well beyond the old model, self producing/distributing live recordings on their own. (Just look up how many orchestras have established their own record labels in the past several years.) "The Future" as outlined in the original post occured half a decade ago. Almost all North American Orchestra who record are doing so under a special live recording agreement which basically pays musicians nothing except for their standard overtime for patch sessions. Most musicians accept this as reality, after all they're the ones who endorsed the agreement. That is how Pittsburgh recorded a Brahms cycle, how San Fransisco and Philly are releasing new Mahler recordings and so on and so on. It is also allowing smaller orchestras to release cds and digital copies, such as my own orchestra just recorded, which raises their cache in their own community. I am not sure who the intended audience was for this post, but it isn't really relevant at this point in history.

Jeff White.

Jeff said...

In addition to my above point about the Live Recording Agreement, cguerin's assumption that musician union monetary demands also fails to address that the major cost-hurdle is the cost to record, which is still much more expensive than he obviously assumes. It may be hard to believe, but recording engineers and producers actually like to get paid for their time an expertise, as do the companies that provide microphones, and other recording equipment.

cguerin said...

Sorry, Jeff. I have produced orchestral recordings myself, and the cost of recording and producing is a fraction of the total cost. Fees to the players represent the lion's share of expense. Even under the limited pressing agreement, musician fees were more than 75%.

Yes, orchestras are doing their own recording and creating their own labels, because they no longer have any other option.

cguerin said...

And, I should add, it's a bit like replacing a Cadillac with a tricycle, both financially and artistically.

Jeff said...

Musicians are only guaranteed a payment of 80 dollars for a limited live recording. Calling that an "outrageous demand" is offensive and disingenuous.

bcom said...

Thanks for clearing up the Grand Valley example. I knew it was released on a label (I both own the album and prefer it to Steve Reich & Musicians). I guess I'm still confused about the process. How did this group get "picked up" and promoted? And to what extent has this particular album sold in CD format vs. iTunes? What drove the sale--the standard record-label marketing techniques (ads in gramaphone, large cardboard cutout promos at record stores, etc.) or a kind of "viral" response (which is how I heard of it).

I'm anxious to know because I am an administrator with the Bard Conservatory and we're spearheading an initiative to educate our students on new realities.

My original "Bravo!" was pointed towards Ross' edict that our students learn the tools of New Media to build and establish their careers, to be entrepreneurial, to understand that there is more than a single path to success as a classical artist these days (winning a competition, becoming a YCA, getting management, signing an exclusive contract with a single label, trying to become Glenn Gould or Karajan, etc.) And maybe, at some point, as some have commented, the very busy/successful ones can then turn over the day-to-day management of this to savvy publicists.

Sorry for ignoring the efforts of smaller labels, the ones not mentioned in the original post!

So I'd really like to hear more about your methods for acquiring and promoting new talent, as well as any and all advice for current conservatory students as they embark on their professional careers.

Bard Conservatory
Instant Encore partner member

AlanB said...

Hi Bcom,

I think your question is directed towards CC and innova; I hope that they respond...and I hope it is ok that I also respond from this label’s perspective.

Finding new talent is a never-ending process that involves a tremendous amount of educating. In fact, I have lectured on your questions several times and have this very conversation several times a month with potential new artists.

Really, there is no magic formula. Here at Azica, we like to see an artist that has a certain number of concerts booked, and certain markers of success, such as competitions, or bookings on high profile recital series and management. However, we often check out younger artists who aren’t quite at that level, and try to make our best assessment. I constantly keep in touch with current artists, and they keep their eyes (and ears) open for us. If they are performing at a chamber music festival and run across someone dynamic, they know to call me. I keep in touch with artist’s managers and their rosters … I might inquire about someone, or they might pitch me. I always keep track of the competitions...not just winners, either. Also, sights MySpace has lead to me spending a day of linking “friends” and threads and coming across someone very interesting.

If we identify someone, we’ll make a pitch. That pitch varies…if the artist is well established and meets certain benchmarks (number of recitals, management, etc.) then things can move rather quickly. If not, then there is a financial negotiation regarding who covers the costs of the recording. That scale slides and every case is different. No matter what, we always make sure that the artistic integrity of the recording will be very high. Some labels will release almost anything for a fee. We don’t do that. We know that a major orchestra member is not likely to sell a lot of CDs because they do not tour as a solo artist. So, we know it will meet our artistic standards, but our fee will be higher.

In terms of distribution, record labels have distributors who interface with retail and online outlets. The distributor tries to get Border’s, Barnes & Noble, and other retailers to purchase the product. They also make sure that every download service has it listed. There are about 15 right now! The percentage of download sales varies greatly. It definitely has grown every year. Industry wide I think it sits around 10%-15% This might be lower than pop music because fidelity is still valued more by the classical consumer.

I’m certain that every label has different views on promotion. In store displays are quite expensive (several thousand dollars for Border’s, dependent on number of stores and in what markets). Recovery of the cost of that type of advertising is a crap shoot. Magazine ads are also expensive. If I remember correctly, Gramophone is somewhere between $5-$7K for a full page ad, depending on exchange rates.


Generally, we’ve found that contact with the audience is the best advertising for classical recordings. Musicians sell to about 10% of the house each night. If they play to a 500 seat hall, they’ll average around 50 sales. They buy those 50 from us at the artist rate, say $8 (a negotiable number). They resell at $15, so their profit is $350 on that night. Now, give 4 concerts a month, and you make an extra $18,000 per year on CD sales. Plus, and this is very important, the quality of the CD and the reviews that it generates will almost always increase bookings and allow you to ask for higher fees.

There was a recent article in the New York Times about digital sales, and traditional media and advertising. The CEO of Atlantic Records (the first to reach 50% download sales) spoke about connecting dots. Borrowing her words- there was a time when connecting a few dots made a record successful. Now, we have to connect as many dots as possible. We promote the traditional way by review copies to the top 100 press markets, and to every radio station….but also promotion not in one large magazine ad, but on MySpace, Facebook, YouTube, Friendster, IE, Artist Websites, special release related websites, e-card blasts, promos to bloggers and podcasters, internet radio, etc.

Honestly, I don’t know that even with new media we can create success unless they are performing regularly. It all hinges on that. All of these other dots help, but they don’t replace audience contact. For instance, a recent Grammy winning record sold about 6,000 units over two years. Estimated concert sales accounted for at least 4,000 of those units. So, perform, and be personable. Shake hands, sign CDs, create a personal relationship with the audience.

Of course, there are exceptions…in the case of Grand Valley, I don’t know that anyone could have predicted. The video is beautifully made and, to me, tells a very human story. You can see the fatigue, the difficulty of recording sessions…and you can also see that the project was professionally recorded. I don’t know that there is a strategy other than to make a great video and post it. Some go viral, most don’t. It is exciting when it happens, especially in our industry. But, we don’t count on it as a strategy. Regardless, GVSUNME and innova deserve congrats.

Alan Bise
Azica Records
alanbise@msn.com

Alex said...

I am a young, aspiring composer. He talks a lot about performers, but he doesn't address composers specifically. Will I be affected as much as performers?

Echmech said...

@ Alex:
Yes, you will also be affected by the new sales models in the way you will be able to earn money. Even though the model is different you will still be sought after for having the competence you have. The new models will incorporate investors (the new "record labels"), which as usual only are interested in making money (just as the old record labels). These are the guys investing money in music creation and promotion and then getting their share from live performances etc..
You will still be able to get paid for creating music, either by a fixed sum on delivery or a percentage of revenues from live performances.

Bill Stensrud said...

Alex

I have run into a couple of sources of information you might find interesting and useful.

"The Composer's Art" by James Fry is excellent. A specific quote:

"Although there are many ways to receive income, only a handful of concert-music composers actually make their living writing music. Even the famous composers of the past could not support themselves solely through composition. Bach worked as a church musician. Chopin taught piano lessons. Rachmaninoff pursued the career of a concert pianist. As late as the 1700s, the church or the court supported composers whose function was little more than that of a glorified servant. In the nineteenth century, with the rise of a middle class "consumer" of music, composers and performers escaped aristocratic restraint. Today, the principal patron is the university, a place where composers are free to write according to their own vision - free to make revolution upon revolution in the world of music. A professional composer's compensation depends on what the market will bear. Well-known composers can command as much as $10,000 for an eight-minute work for three performers. In most cases, however, publication royalties are usually small. Fees for the licensing of performances can be much more lucrative, especially if the performance is an orchestral work broadcast over the radio or TV."

Also excellent is "Quarter Notes and Bank Notes: the Economics of Music Composition in the 18th and 19th centuries" by F.M. Scherer, published by Princeton U. Press. Scherer is not a music historian - he's an economist! Check it out below at:

http://press.princeton.edu/titles/7612.html

Thanks to my collegue Steven Carlson for the Scherer reference.

Best of luck with you composing career.

Joe Shelby said...

I agree with the main comment about the orchestras running their own labels (NYPO is one that has joined this trend, though they do have the extra outlet of NYPO This Week to help pay for the engineering).

The issue is that if the cost of recording can't go down, then one must attack the other fixed cost of CDs: Distribution. Getting a $18 CD in a store means $5 goes just to the packing and shipping and warehouses to get it even near the retail outlet, which then takes its own $8 if it is sold without a discount. That's why stores max out their discounts at 40% - any more and that's the last of their profit.

So the way to save money here is to get the retail market out, given that the retail market doesn't really care about the customer of this material in the first place. When $13 is taken off the price of a release, you're down to your original $5 that it cost to make it (assuming a generous 10,000 in sales), and that cost is a little less if it IS a live recording (Simon Rattle's BPO and the LSO all release almost exclusively live recordings now, but like with Bernstein's work on Carnegie Hall in the 60s, they've conditioned their concert hall to optimize this for a nearly balanced sound that doesn't need much more post-production).

Whether sold as a CD on demand or mastered down to a download mp3, when trick then is to get people to notice it. BBCMusic and Gramaphone and Classical FM (as far as I know, there's no American magazine covering this material) make mention of downloads but usually only in a special section. They won't give a full review of them the way they will a major label's release.

Now will that change with fewer labels? Probably, because it won't hurt the magazine's sales either way. It WILL however, start hitting their ad revenue since these smaller outlets can't pay as much as a full-page spread for EMI would have cost.

NYPO has a good thing going, something also done by Chicago Symphony and others (Marin Alsop was doing this with Baltimore Symphony on XM but I don't know if it continued after the Sirius-XM Merger): get a radio show going and let the revenue of that help pay for post-production engineering, the final product can then be offered for sale.

The other thing the article doesn't mention at all is the licensing costs for the Composer. This is the big bottleneck against 20th century music on the radio: it's not "free" from copyright. ASCAP is going to demand that the songwriter for "I Kissed A Girl" gets paid every time you perform a Walter Piston work (don't think I'm exaggerating here).

Again, if the costs for distribution and retail can get shrunk down to nothing, that might make it possible to release more contemporary music and to record more works by composers that otherwise languish beyond their premiere - simply because there's no way others can listen to it again to really get a feel for it.

Anonymous said...

Joe Shelby: "ASCAP is going to demand that the songwriter for "I Kissed A Girl" gets paid every time you perform a Walter Piston work (don't think I'm exaggerating here)."

That's like saying "my water company will insist that I pay for my neighbor's water even if I never turn on my tap." Blanket license fees collected by ASCAP are like the minimum monthly fee you pay to your electric company or phone company. This doesn't mean that the songwriter of "I Kissed a Girl" gets paid when you play a Walter Piston piece. It means that the license fee that covers both compositions gets *collected* at the same time.

Joe Shelby said...

Yes, it gets collected at the same time. My point is that a venue that is playing exclusively Walter Piston, or even (Irish pubs get this) exclusively Celtic music, find that their payments don't go to what is actually being performed, but to a general fund that is re-allocated among the thousands of artists it represents by one criteria alone: radio airplay and ratings.

So yes, a night of Walter Piston finds the vast majority of its ASCAP dollars go to "I Kissed a Girl" (or whatever the hell the hit of the week is that I pay no attention to at all), while Piston's estate collects next to nothing.

I meant what I said and the way that I said it. The sarcasm was there and quite intentional.

"The history of the music industry is a history of exploitation and theft." - Robert Fripp

Joe Shelby said...

BTW - Pistons estate does collect next to nothing under those circumstances because Piston doesn't get any airplay outside of specific radio shows. This is that curse of classical music that the 20th century, outside of single hits from Barber, Copland, Bernstein, Vaughan Williams, or Rachmaninoff, simply doesn't exist on radio.

Hudsonic said...

The certainty with which the writer predicts fast approaching demise for the recording companies is laughable. It is a neophyte's perspective and one, I feel, overly influenced by an embracing of technology.

The most serious flaw in the hypothesis is that recordings will be allowed to be released without editing, polishing and without refinement. The musicians won't allow that.

left out is the fact that a recording exists as a separate art form in and of itself. This is currently valued and sought after. It will continue to be as well.

A dire pronouncement here and one that does not have gravitas.

WJ Keizer, writer/publisher said...

Firstly we should bear in mind that a composer is not writing a recording nor a cd, he's writing a score. From this score instrumental parts for the individual musicians are drawn; only once these parts have found their way to the orchestra's musician's desks the recording may start. This will finally result in a cd.
How relevant is this? We're talking about a copy of a copy of a copy. When one copy falls out of this system, it will hardly effect musical life.The strangest thing is that whatever Wikipedia-article you may read on classical composers, they only refer to cd-recordings as a reference. But for a scientific approach of music this is not of any use as it is not the source, but a hard to identify copy of it. The score is the source.

The other problem that shows now is the collapse of the Anglo-American economic way of thinking. Take for exaple copyrights. In their vision, the (protection of the) exploitation is way more important than protection of the moral rights of the composer. As US copyright is, compared with the brick wall of the European equivalent, a piece of cheese with holes. In the European way of thinking, exploitation is less important. Therefore the lack of cd-contracts of conductors of European orchestras has not had any big effect on musical life, contrary to present American experiences. Even better: the Royal Concertgebouw Orchestra, once being recorded by Decca with Bernard Haitink and Riccardo Chailly, are now producing cd's on their own behalf and thus threefold their cd-sales. Decca sold up to 5000 copies worldwide of a recording, RCO themselves are selling 15.000 copies per recording. This can only be explained by the fact that Decca never took any notice of local markets as RCO does now. They practise the old principle of thinking global and acting local.

In the European system, orchestras are not primarily privately funded but supported by public means. This is paying off now economy and therefore exploitationmodels stand still. In the US way of thinking, it may affect competition, here in Europe it is the safetybelt for culture.

It would be interesting if the US could import the so-called Rhineland model of thinking, starting with cultural life. Isn't it frequently said that culture is the mirror of society?

Anonymous said...

"None of the pre-2000 material had digital rights cleared when it was recorded and the cost of clearing these rights now dwarfs any income that could result."

The existence of the Deutsche Grammophon mp3 shop, as well as the huge selection of classical music on itunes, refutes this claim and hence eviscerates your argument that "Virtually the entire recorded history of classical music will vanish."


What was the intended non-literal meaning of "none" by means of which your statement becomes true?

mitrich said...

I am going to try this one more time, I seem to not be able to complete a post the first time.

I see prices quoted above like US$15 or 18 for a CD. These prices are unrealistic for less than 25 tracks.

iTunes and Amazon are setting the benchmark prices for tracks. US$0.99 is the highest people are going to pay. Large compilations go for much less, as low as US$0.39. I know, I have pruchased them. That's the way it is going to be.

I recently had exchanges with a sucessful Grammy winning string quartet and a newly emergent Jazz band. They both had work I wanted; but they were not available in mp3 at Amazon. When I asked about this, they said it was up to their publishers. I responded that most people would gladly pay a reasonable price per track for mp3's; but if the music was not available in this reasonable way, the music would wind up in torrents. Listeners and fans will not pay exorbitant prices but will still get their music.

Both groups then came back to me in less than 48 hours that the works were now available at Amazon in mp3.

Even in mp3, Jazz is way too expensive. That is why huge compilations by John Coltrane, Miles Davis, Eric Doplhy and Ornette Coleman, to name just a few, form Impulse, Prestige and Atlantic, are available as torrent downloads.

Torrent downloads are a pain in the neck. 2-4 gigs can take 3-5 days to download. Most people would rather get their music quickly and easily and will pay a fair price in these large compilations of US$0.35-.40 per track.

mitrich said...

I am going to try this one more time, I seem to not be able to complete a post the first time.

I see prices quoted above like US$15 or 18 for a CD. These prices are unrealistic for less than 25 tracks.

iTunes and Amazon are setting the benchmark prices for tracks. US$0.99 is the highest people are going to pay. Large compilations go for much less, as low as US$0.39. I know, I have pruchased them. That's the way it is going to be.

I recently had exchanges with a sucessful Grammy winning string quartet and a newly emergent Jazz band. They both had work I wanted; but they were not available in mp3 at Amazon. When I asked about this, they said it was up to their publishers. I responded that most people would gladly pay a reasonable price per track for mp3's; but if the music was not available in this reasonable way, the music would wind up in torrents. Listeners and fans will not pay exorbitant prices but will still get their music.

Both groups then came back to me in less than 48 hours that the works were now available at Amazon in mp3.

Even in mp3, Jazz is way too expensive. That is why huge compilations by John Coltrane, Miles Davis, Eric Doplhy and Ornette Coleman, to name just a few, form Impulse, Prestige and Atlantic, are available as torrent downloads.

Torrent downloads are a pain in the neck. 2-4 gigs can take 3-5 days to download. Most people would rather get their music quickly and easily and will pay a fair price in these large compilations of US$0.35-.40 per track.

Kevin Shea Adams said...

Interesting thoughts. I just have to say though that it is important to remember that "recordings" actually represent a wholly separate medium than performance, it is a medium and art unto itself. One that many contemporary composers and performers are drawn to it as such - a tool, instrument, and mode of musical experience and presentation. To think that recording is going to disappear or assume a trivial role soley for economic reasons related to distribution is absurd, any musician or composer in 2008 is eager to work in this format. The means of production and distribution will change, they already are, but it is ridiculous to think musicians are not going to continue to pursue recording for creative and artistic reasons. Recording is not just a "capture" of a performance, it is a musical medium, an instrument itself. When recording and playback technology went mainstream people thought no one would go to concerts anymore. Only a few decades later now you are predicting a complete reversal of this idea - that since records are not presently the commodity they once were (thanks to digital distribution), that musicians and music will only be experienced, bought and sold live? Both predictions are idealistic. Composers have only scratched the surface of working with the recording arts. With creative techniques, aesthetics and massive innovations in technology driving recorded work you can expect the "cd" or whatever format, to weather the present changes in distribution.

Richard B said...

Changes are need but like other I have to disagree that CD is a badge of honor. It still comes to performance. There are many of CD I have gladly lost due to poor performance. Furthermore CD democratize classical music by allow small groups like my beloved Portland Baroque Orchestra to produce CD sets for promotion and as a source of fund raising. It also why I am dead set opposed to sealing music by torrents. I dare not use sharing in any way shape of form. By not respect the copyright, we are robbing the classical artist of a crucial source of revenue, for any orchestra and performer knows, every penny counts. As for the price being too high, I say this excuse to steal is rubbish. I have been listening to classical music CD for 20 years. The same Classical CD I bough 20 years gives me the same joy today as when I first purchased it. $18.00 is a bargain.

Another reason why the death of CD is over rated is there no reliable technology to replace them with, except for SD rom cards. Modern Internet technology allows me to have more exposure to good Classical Music but was designed mainly to separate the 14 to 35 year old demographic from their money and not for Classical music. MP3, give me a break! I can tolerate compression to a point if streaming or in my car but MP3 compression butchers the music; furthermore site like ITunes and Rhapsody and applications like Windows Media player treat each track as a separate entity, resulting in the scrambling of the order on large symphonic and opera pieces when attempting to down load them into my MP3 player.

mitrich said...

Richard B said, "...furthermore site like ITunes and Rhapsody and applications like Windows Media player treat each track as a separate entity, resulting in the scrambling of the order on large symphonic and opera pieces when attempting to down load them into my MP3 player...."

Not true with mp3 albums from Amazon. They go onto the hard drive and into WMP in the exact order in which they exist on the disc. I might need to edit the ID-3 tags; but that is just to have the identification be what I want it to be.

I must say, also, I am sorry about your opinion on mp3 files, Amazon's are at a high bit rate and sound just fine.

A.W. Carus said...

Congratulations on starting this blog! At last someone has taken this on!

Two remarks on your admirably provocative manifesto, (1) a specific request for clarification and (2) a more general criticism:

(1) You say that "new recordings will completely replace old recordings". Do you mean *future* "old" recordings, or those that have become classics of the recorded repertoire over the past half-century or so? If you mean the latter, I'm sure you're wrong; the recorded repertory has a following, and even if that is reduced to just a subculture among performers, it won't die out. Especially if, as you conjecture, quality standards of future recordings will fall. That means the existing corpus of recordings will become an eternal standard of perfection; demand for it will increase.

(2) The future of classical music needn't be for-profit to be viable. As you say, people need to be adequately compensated, but the nonprofit sector has plenty of well-compensated jobs. Most intellectual work is done in the nonprofit sector these days; medieval history and algebraic geometry haven't died out just because they can't be done at a profit in a competitive (or even a monopolistic) market. Indeed classical music *has* been largely nonprofit for most of its history, with recordings an extra source of income just as popular books are for academics able or inclined to write them. (The parallel could be taken further, but raises issues not addressable briefly.)

Anonymous said...

Computers and the Internet require large amounts of capital and material resources, and we are seeing deficiencies in the first due to a debt- and money-based capitalist system that will not last. We will see resource crunches when we experience mineral, oil, and water shortages. In which case, we should not rely on the Internet so much.

Materials shortages may also affect CDs as much as they would audio file players, in which case we will probably have to expect cheaper technology to return, such as gramophones.

As for compensation and performances, we will likely find ourselves in the same situation as we did decades ago: more live performances on chaper forms of technology (such as the radio) if not in local venues.

musicobsession said...

the blog is nice because of its content.

Anonymous said...

KCSN radio station in Northridge California appreciates classical music. Check out this podcast. http://www.youtube.com/watch?v=6IJIrB3H6U4

Y. Dobon said...

An interesting article. By focusing on the technology side of the problem, you have conveniently swept under the rug the overwhelming fact that most of the performances one finds on recordings (unless it happens to be a rerun of one from before 1940) are usually as hopelessly boring as most live concerts. Ditto for new music. This boredom problem spawns all manner of quick, cheap, some not so cheap, and hopeful solutions. In the end, all such solutions are really putting the blame on the listeners...either they are Cretans or they are too distracted or their tastes are changing or they don't have time, or whatever. Blaming listeners for whatever reason is like blaming diners, in a restaurant that serves rotting week old food, for walking out and refusing to return.

When the listeners express their reaction to music making that fails to communicate by walking out on it and refusing to return, they are doing the only thing they can do when performers give them nothing but the notes. What aspect of responsibility the recording industry bears in this quandry should not be used to excuse almost 70 years of ever increasingly boring music making that musicians, especially classical musicians, are so proud of.

The recording business problems only accelerate what probably needs to happen anyway. Unless there is a total collapse, the phoenix can not rise from the ashes.

The love of music on the part of musicians should never be used as a way to avoid really learning how to communicate music to ordinary folks. The following was sent to me, I can't remember who, as it was some time ago, but it perfectly explains the source of the whole problem.

THE TEN CONDEMNANTS

A Puritanical Code of Musical Ethics

1. Thou shalt love the score, thy God, that thou mayest worship and serve it with every note thou performest.
2. Thou shalt perform every note exactly as it appears on the printed page, and in no other way shalt thou perform it, for to do otherwise is an abomination of desolation unto the score, thy God.
3. Thou shalt not take artistic liberties with the printed page, neither thee nor thy students nor thy student’s students, even unto the seventh generation of them that love the score.
4. Thou shalt not err, for to err is human and humans must stay out of the way of the score at all times, to err is unclean.
5. Thou shalt not commit any act which is not explicitly indicated in the score, lest ye defile it and make an abomination of it.
6. Thou shalt perform all notes of equal value in exactly the same manner, accurately and with metrical precision, for the printed score thy God is God, and its perfection must remain inviolate.
7. Thou shalt not be concerned about boring listeners, for thou art right and thou knowest this beyond all doubt, for the score, thy God, hath revealed it unto you.
8. Thou shalt only use for expression: continuous vibrato, evenly graded dynamics, evenly graded accelerations and decelerations, and articulations, that thou disturbest not the purity of the tone which thou makest.
9. Thou shalt not improvise, for all that is worthy is written already, besides which thine own thoughts are inferior.
10. Thou shalt punish, ridicule, and demean all who do not comply with this code, to forbid them from performing; for the score, thy God, requires total and unquestioning obedience.

Anonymous said...

Your remarks about the recording are interesting. In 2008, there was a slightly different economic situation than there is now.
Who wants to predict what our eternal oligarchy will do next? Let alone, what the future of the U.S. recording industry will be.

learn and master guitar said...

Your are right w/ your article, Nowadays many people are not into classical music anymore that's why only those old performers are in to the market but newbies are having hard time to be in the business that's many of them switch to different forte like into jazz guitar music.

Andrew Ward said...

I've very belatedly discovered this blog post, and have written my thoughts in my own blog here. In brief:
- I agree that a recording is largely a marketing tool for most musicians these days
- I agree that musicians should be trying to get their recordings heard by as many people as possible
- BUT in my view, that means it's even more important for the recordings to be of high quality. If a lot of people are going to hear the recording then you want it to be good!