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The music industry is dead. Long live the Music Industry 2.0.

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Like most club-dwelling denizens of the Nashville rock scene, Kyle Andrews works without an entourage. He changes his own guitar strings and tunes his own instrument.

The difference is, he doesn't have to. Unlike other local club dwellers swelling the ranks of the Great Unsigned, Kyle Andrews made more than six figures last year from his music career.

What, you've never heard of him? Look him up on YouTube, where he travels among platinum-certified superstars such as Lady Gaga and Lil Wayne — as well as thousands upon thousands of hitherto nameless, faceless artists seeking viral celebrity. Until last year, Andrews would have been considered one of the latter.

But almost exactly a year ago, he posted the video for his song "You Always Make Me Smile," a carefree toe-tapper yoked to a clip depicting an epic water-balloon battle. Since Aug. 30, 2010, it has racked up more than 1.5 million views and counting.

Scroll down and you'll see a key reason why. Among thousands of comments — almost all posted by viral viewers in cities and countries where he's never even performed, let alone promoted himself — one says, "Thumbs up if you saw this on the Holiday Inn commercial!"

Andrews' success embodies dramatic shifts in the music industry — a field now dominated by independent artists and entities, driven by consumers, and boundlessly connected by the push of a button. In this digitally tilted landscape, commercials aren't instantaneous cred killers: They're a coveted venue for breaking new acts. Free online viewing and listening sites aren't the enemy: They're word-of-mouth essentials.

That isn't to say major labels have followed the last mammoth into the tar pit. "Even though it's a 21st century business model today, [big labels] definitely still have a place," says Ken Weinstein, president of publicity giant Big Hassle Media. "They can fire things up like nothing else — there's still no muscle like their muscle."

But stories such as Andrews' show how new models are starting to pay off. The push from major-label gatekeepers is yielding to the pull of a viral populace — an audience that can access nearly every piece of published music they could ever want to hear. Now artists, labels, publishers and brick-and-mortar retailers are seeking ways to reap financially from the digital revolution.

That has turned the new century's music industry into wide open space, with fewer middlemen between the listener and the music. Its frontier is a rapidly evolving digital infrastructure that links online retailers, streaming subscription services, free-media sites and social networks.

Yet there's an even bigger shift at play here. Success, under the terms of the 20th century music industry, meant a cradle-to-grave contract with a major label — always favoring the label. In today's hodgepodge of career paths and options, no single business model dominates. Can these scattered showers of income eventually run together into a revenue stream?

For a number of artists, companies and entrepreneurs, both in Nashville and beyond, the forecast is remarkably promising.

To be sure, this Music Industry 2.0 was born as much out of economic upheaval as technological evolution. At the dawn of the 21st century, Napster hit the recording industry the way the Four Horsemen hit the apocalypse. Almost overnight, the peer-to-peer file-sharing service invaded home computers worldwide, inspiring consumers to seek and download music.

And that's what they did, according to the Recording Industry Association of America — to the tune of $55 billion in lost revenue. The industry's $15 billion-a-year business model, which had thrived for decades by selling a $17.99 product, was abruptly undercut by an unforeseen competitor, at an unbeatable price — free.

Hip-hop impresario Dr. Dre cried that Napster was stealing food from his children's mouths. But optimists argued that the digital Pandora's box would ultimately empower independent artists, labels and entities.

"We should think of [it] as a new kind of radio — a promotional tool that can help artists who don't have the opportunity to get their music played on mainstream radio or on MTV," hip-hop legend Chuck D told The New York Times in 2000.

Eleven years later, MTV is no longer a music network, and radio is no longer a reliable sales bastion for anything but country and Top 40 pop. Record-store chains have gone the way of the rumble seat. As for Napster — like the $17.99 CD — mostly only the memory remains.

But Mistachuck wasn't wrong. Thanks in part to these new avenues for promotion and distribution, artists no longer need to sign to a record label to make a living in music.

Just ask St. Louis' Pernikoff Brothers, Tom and Rick, whose DIY, crowd-sourced site Tunespeak allows users to earn royalties on record sales for helping to spread their latest musical discovery's viral distribution. On Tunespeak, fans share song links to a band's profile on social networks like Facebook or Twitter. Following the link gets you a seven-day stream of an album, with the hope that a purchase will follow. When enough purchases do (as in three), the poster gets a respectable cut. Think of it as sort of an inverted Kickstarter — the crowd-sourced project-financing site artists are now regularly using to fund their endeavors.

Better still, ask Kyle Andrews. The 29-year-old singer-songwriter could have signed a long-term, multi-album label deal that would've netted him a modest five-figure advance, bankrolled his studio costs and supported his efforts on the road. He had that opportunity.

But Andrews felt there were too many strings attached. He would relinquish ownership of his master recordings. He would face the inescapable hazards of the business: the long gestation periods, the shifting marketing agendas, the shuffling of staff that can exile a once-hot artist to low-priority Outer Slobbovia.

"I've just watched so many close friends go through that," Andrews tells the Scene. "To sit for nine months and then have it go south would just be really upsetting."

So with the help of Terrorbird Media, a Brooklyn-based music marketing company that manages him and administrates his publishing, Andrews found an alternative. McCann-Erickson Worldwide Inc. — the advertising agency representing the Holiday Inn hotel chain — offered Andrews a one-song deal.

McCann-Erickson wanted to use "You Always Make Me Smile" — a song Andrews wrote with his roommate, recorded in his home studio and had previously self-released — as the audio equivalent of a welcoming "Vacancy" sign in its Holiday Inn campaign. For that, the agency offered the artist a check that trumped a major-label advance, and let him keep his masters to boot.

But the offer didn't end there. As long as the agency continued to renew the ad spot, which it has, it had the option to essentially act as a label on Andrews' behalf, releasing the song on iTunes and financing production of its video.

Not only did the resulting deal pay for Andrews to tour, write and record full time, the Holiday Inn spot functioned as endless promotion, practically turning into hotel wallpaper on ESPN and other networks. Meanwhile, the infectious pop ditty inspired enough lyric-Googling to net him a seven-digit click count on YouTube — the stuff that major-label marketing dreams are made of.

"So, really, it was the best label deal in the history of the world," says Andrews, who spent 10 years in the trenches without attracting that kind of attention. "As far as I know, that deal was the first of its kind."

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