Hacker News Reader

Comment by ChuckMcM | Hacker News Reader

I'm glad he made some money on it. His mind will be blown when the 'long tail' kicks in (people buying this video 3 years from now, still). He mentions "This [$200,000] is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video."

Here is the part where this can go off the rails. So the long tail will hit, people will 'discover' him (maybe on his second or third video) and will download this one. There will be many copies out there in circulation. The temptation will be to think "Gee if people couldn't just get one of those copies out there already I would be making even more money!" Completely losing sight of the fact that the videos out there are an agent for discovery and 'tasting' which is bringing more people to his web site.

People sometimes go all green with greed when that happens. Money can do that to people sadly.

That being said, the really cool thing is it adds another 'success' story to Trent Raznor's Radiohead (I don't think they were ever this transparent with the numbers there but I may be wrong) and makes it harder to dismiss the successes as 'anomalous' rather than 'reasonable expectation'. It is the presence of success stories that will get more and more people to move this way.

I wish it wasn't like water eroding a rock though, progress will be rapid when the flood starts but for now it is just a trickle.

View on HN

Back in the early days of the internet, I was the IT Manager at Nettwerk Records. We went out of our way to put complete, high quality MP3's of every song we owned the rights to online, for free, because we were willing to let the music stand on its own. We believed that it was worth giving potential new fans the chance to hear what they were (hopefully) buying, and that really was the case.

We had so much obscure music in the back catalogue that people would browse our archives, find a band that they'd never heard before, listen to a few songs, and then buy one of their CD's. More often than not, people would buy multiple CD's.

For that matter, when Sarah McLachlan's first big album, Surfacing, came out, the day that it hit the shelves we also put the entire thing in (for the time) high quality MP3's up on our web site for people to grab copies of.

And even if they didn't buy the CD, we hoped that they'd enjoy the music enough that they'd come out to see her in concert, or at Lilith Fair.

That kind of worked out not too badly, it turns out.

Forgot to mention that the underlying concept was that it was more profitable, in the long run, to make a fan than it was to make a sale.

The entire M.O. of the modern music industry is to shatter our preconceptions of just how short-sighted somebody can possibly be.

This is because the modern music industry honestly believes that it is going to go the way of a dodo.

When you think that your sources of revenue are dying, it makes sense to try and extract as much as you can from them on the short term, despite the damage it does to them long term.

Of course, this makes the prediction self-reinforcing.

I would actually counter that it's not the music industry that believes it's going the way of the dodo. I'm in the music industry. Have been for almost 15 years now and have never worried for one second about my career. I'm a musician though.

The people who are rightly worrying that their jobs are in peril are the suits (though often dressed in Tshirts and ballcaps) who bring less and less value in an age where experiments like Louis C.K.'s are a widely publicized and self-produced success. Disruption at it's finest and most liberating.

You're basically right, I just want to reinforce that there are lots of us modern music industry types who couldn't be happier about "the situation".

As a side note, I wonder how someone could plot the frequency of usage of auto-tune in the studio with record sales.

One thing that most people don't realize is that a lot of the major record companies are in fact more manufacturing and distribution companies than anything.

Here in Canada, EMI produces and delivers, via physical distribution, a huge number of CD's and DVD's.

As soon as things "go digital", that goes away.

I think that physical channel, more than anything, is what they've been trying to salvage, by staying away from digital.

I worked for one of the big 5/4/3 music companies and they are actually desperate for physical distribution to go away.

Universal Music (the largest music company) sold its CD manufacturing plants a few years ago and all their focus is on digital exploitations. They are looking to the future and that rarely includes people buying CDs in retail stores.

I can't stress how desperate they are to take advantage of the huge number of digital assets that they own. So, start-ups, don't be too afraid of them. If you have a way for them to make money they will be interested in you, just don't assume they are idiots.

You may also want to start thinking about writing software to help them manage the millions of digital assets that they have - its not a simple problem - imagine the digital rights that needing tracking (for every type of exploitation in every territory), the royalties to be paid, the SOX auditing, the contracts, digital workflows, let alone the challenges with taking digital content and pushing it to a huge variety of downstream partners.

If you have a way for them to make money they will be interested in you, just don't assume they are idiots.

That's a really polite way of saying "They will squeeze the last drop of blood out of you and then some".

You may also want to start thinking about writing software to help them manage [...]

We already have the software. It's called spotify, soundcloud, grooveshark, iTunes etc. The technology to pay the artists a slice of the revenue is in place. Except currently it's mostly used to pay the labels instead.

That's a really polite way of saying "They will squeeze the last drop of blood out of you and then some".

Very true! However, they do have a lot of cash and very few ideas of how to exploit all their digital assets.

I didn't mean software for end users, but software for the music companies to use internally to manage their assets. You'll be surprised (or not) to know quite how disjointed and hacked together their internal systems are. Every music company merger results in years of hacks in getting data from one set of archaic systems into another. Of course, the same software could also be used for managing other media, such as film, tv etc - there are small companies that have done very well supplying custom software to entertainment companies e.g http://www.ecteon.com/products-overview

You'll be surprised (or not) to know quite how disjointed and hacked together their internal systems are.

Not surprised, I've witnessed it first hand (I've been with a music startup).

My argument is that they don't have a software-problem. Managing an inventory of a couple million items is by no means rocket science, they could fix that in a couple months. What the best software can't fix is their mindset, which is firmly stuck in long expired business-models.

Dealing with one of the so-called "majors" is like dealing with a really stubborn 3yr old. You can forever explain the simplest realities to them in the simplest terms - they will still insist on their objectively absurd position and use all the remaining power that they have to make your life miserable in every possible way.

The best strategy is to stay far away from them until they run of money and their inventory moves into more clueful hands. Unless you want to be the one to take-over their inventory of course. In that case I wish you the best of luck - and nerves of steel.

I worked on software built explicitly to handle this issue, settlement of digital property revenues to channel partners for a startup two years ago.

Nothing came of it. Maybe it was too soon? Maybe the first founder didn't know the right people?

Maybe the first founder didn't know the right people? Probably.

Music companies are entertainment companies so are still extremely relationship-oriented businesses - far beyond the way conventional businesses are (such as software companies, manufacturers, retailers, etc). To be a top exec at a music company does not necessarily depend on skill or acumen.

Music execs can fail horribly at one company and then effortlessly transition into another great exec job at a competing music company. It's a small world. The music industry has this idea that its very complex and difficult and needs years of experience - but its really not.

If your founder happened to know the right exec in an e-commerce department and was able to show a demo/trial you could have been in with a chance. Anything related to billing software always has a good chance because its easy to make a case how it is generating revenue from day one. That's a difficult thing to do.

So why was this not more widely adopted? I mean, if you want to convince a corporation to adopt some business model, all yo have to do is show it's more profitable. Or is that naive?

How do you demonstrate that a fan is more profitable with something more than speculation? In a way that can still be charted in a PowerPoint for the suits to see?

You demonstrate the opposite; that pissing off fans is unprofitable. The music industry is no stranger to speculative charts and graphs; they use them all the time to justify their stance on piracy! "Potential revenue lost".

But back in the early days of the Internet, the hassle/quality/price ratios were not the same, so I suspect that would not work as well these days.

For a start downloading a full CD would be quite a faf back when most people had dial-up or something else slow as their main connection method. Costly too if you were in a country/area where there were no plans that didn't result in you paying per minute for time on dial-up.

To keep the download size manageable you'd have to use a relatively low bitrate, which would probably mean most people could tell the difference between them and the CD, especially with the older compressors with psycoacoustic models inferior to those used today (giving the choice on dial-up: high quality some time later today, or low quality sooner).

Being able to download a track, at a high enough quality that you can't tell the difference without breaking out a spectrum analyser, in a matter of seconds means the number of people paying for the CD because that is easier is going to fall drastically. The number of people buying other merchandise of tickets for live gigs might remain more constant though: physical delivery and "being there" can't be refactored by a fast connection in the same way.

I think that kind of thing is often also done with a twist: the artist whose content is put online for free (or very cheap) does not get a dime. After all, no money is made from selling his stuff. Meanwhile the company profits nicely in the way you describe, selling other stuff. Not saying it worked that way for you, just that it is an old technique...

I'm all for this model.

But a major challenge remains, and it's this: Trent Reznor, Radiohead, and even Louis C.K. were all hugely popular and successful before they employed this model. Can the model work for lesser-known artists attempting to capture an audience?

In theory, sure. If anything, I could see this model's working out quite well for the proverbial little guy. But first, that little guy faces a big challenge: how to get himself noticed. How to turn himself into a Radiohead without the tens (hundreds?) of millions of dollars that EMI spent marketing and promoting and touring Radiohead, over 20-odd years, prior to the band's online release of "In Rainbows." How to turn himself into a Louis C.K. without two major HBO series deals, a bevy of TV roles, sponsored tours, and a movie role or two.

In looking at the majorly successful artists in pop culture today, we see that 99.99% of them were "made" by a big company or series of big companies. They were self-made in the sense that they quietly worked in the trenches, perfecting their craft, sometimes for decades, before they hit their big breaks. But big breaks were necessary conditions of becoming superstars. And becoming a superstar seems to be a necessary condition for big success in this model.

[I don't want to get onto too wild of a tangent, and start discussing the philosophical meaning of "success." For some, success might mean simply making a living as an artist. I get that, and I respect that. I'm putting that aside for the moment, however, and focusing on the top of the game.]

The current model does not work for less popular artists, so I have trouble seeing the downside.

I'm anything but an apologist for the current model. But if it disappears, we haven't necessarily made life any better for lesser-known artists. So if we are to remove one of the critical steps to success (i.e., the marketing and promotional spend of traditional labels, publishers, networks, and studios), we should hope that there's a viable replacement. Or we should try to build one.

In our haste to cast out the old guard, we tend to lose sight of the fact that the old guard still fills what appears to be a necessary purpose: the breaking-out of artists. I'm confident and hopeful that their crucial role in that purpose will, eventually, weaken or fade. But for now, it's still a strong reality.

Ultimately, we have yet to see indications that this new model is any kinder to small-time or nascent artists than the old model is. That's the big problem. The winners of the new model (Radiohead, Trent Reznor, Louis C.K., et al.) have first been winners of the old model. So it's very premature to say that the new model is better for the little guy.

To put it in financial terms: the new model holds bigger theoretical upside (share of profits) for artists and consumers (reduced costs). But it does nothing about the downside (risk of never breaking out, financial burden of building a fanbase, etc.), and may even make the downside worse for most artists. At least the little guy in today's model has a chance, albeit extremely slim, of getting discovered and catching a big break. But will the same thing be true in a pure long-tail environment? The jury is still out.

"In our haste to cast out the old guard, we tend to lose sight of the fact that the old guard still fills what appears to be a necessary purpose: the breaking-out of artists. I'm confident and hopeful that their crucial role in that purpose will, eventually, weaken or fade. But for now, it's still a strong reality."

To be totally but somewhat apologetically blunt - that is a steaming pile of BS. That is the exact party line repeated by every single rank and file music industry do-nothing to justify their phony-baloney jobs.

In my own personal experience, affiliation with a record label as a young and growing artist is almost certainly more likely to handicap your chances at success than it is to actually help it. The reason is that when the young artist buys into the party line that "you need the major label machinery to grow your career", the artist then hands over a large amount of control and trust to a supposed "experienced, connected industry professional" to do a job that 99 times out of 100 would be better off done by the artist themselves.

Not only that, but the young artist has no idea that the supposed "experienced, connected industry professional" has zero interest in or understanding of what it is that the artist actually has going for them, either artistically via their music or commercially via their fanbase. At that point all they know is that for some reason, things aren't working out as everybody had hoped it would with the new label. They find out later that they are essentially paying a 100% interest rate on their advance for the privilege of believing this in the first place.

I and all of my buddies in other bands live our lives in the long-tail environment and we play for larger crowds and make more money than probably 98% of the suckers that take the advice to place their bets on "the traditional industry model". And we own our souls outright. You've probably never heard of any of us, but we're okay with that.

THE ONLY WAY FORWARD is to once and for all crush the notion that the "traditional industry model" is anything other than a parasite that eats hopeful and talented artists and excretes auto-tuned plastic dolls.

Rant over for this round.

> So if we are to remove one of the critical steps to success (i.e., the marketing and promotional spend of traditional labels, publishers, networks, and studios)

This is still marketing. By removing the publisher, which specializes in marketing, we put the burden of publishing duties on the artist.

Note how financially successful, award-winning, prime-time comedian Louis CK is playing the little guy against the publishers, mentioning that he financed it all (much like a publisher would do).

Who knows who he's paying or how much. The role he's playing implies that all the cash goes straight to him, the artist, but did he pay anyone for the production? Does he have a future royalty agreement with an agent or, perhaps, a channel like Comedy Central? Is he paying for advertising, or has he hired a marketing manager/publisher to rustle up publicity? Is he calling in favors to get mentions on news sites (much like a publisher would do)?

I'm not being cynical, just that he's playing the game very well, he's using his fame/brand to leverage sales, and that this distribution method doesn't really change anything except move the same roles elsewhere.

There are lots of examples of artists blowing up without labels (though some subsequently start their own or get signed) in the past few years by distributing their music on the internet for free. See: Pretty Lights, Girl Talk, Odd Future, The Weeknd, Justin Bieber, etc. It won't be viable for every artist/band but neither is the music industry of old. You must bring something special because otherwise nobody will care.

It's not clear the internet has actually improved the odds, though. There are plenty of examples of artists DIYing their way to at least moderate prominence decades ago as well; particularly common in punk-rock, where you've got Bad Religion, Fugazi, Crass, etc. You didn't have blogs to promote your music, but did have zines, flyers at shows, college radio, etc.

The current model doesn't work for most less popular artists. All the artists who came up through the system and are now superstars were less popular once, and the promotional machinery had a big part in making them popular (and rich).

This is sort of how I feel about the traditional publishing industry. The way it's worked traditionally is that can't quite tell which authors are going to be big sellers, so you take a chance on a bunch, and the more successful ones subsidize the less successful. Now the successful ones for obvious reasons resent this and can shift to a self-publishing model. The problem is they never would have gotten successful had some publisher taken that initial chance on them. Where's the next generation coming from?

An interesting angle is that the current model actually works quite well for the least popular artists: someone else pays for the cost of recording, usually at least a small advance, and tour, and if the record ends up selling nothing and the tour is a bust, the label eats the expenses. Such people would be quite a bit worse off if they paid for the recording/tour out of pocket and it went nowhere. The people who get screwed are those who do moderately well, where the record company takes most of the profits.

But this is a symptom of one-size-fits-all solution the labels cram people into. Like VCs, they don't care at all about moderate success, anything less than phenomenal success is failure to them. So they'll burn your band/company out trying for unreasonable goals instead of helping you achieve whatever you can.

Your band could have been poised to be a very successful mid-level act and have been mispositioned, because mid-level acts aren't hugely profitable, and thus seemed to be a failure in a market you weren't wanting to compete in.

The small bands don't need a ton of financial support, especially these days. Recording a song can be done, professionally, for just a few thousand dollars and traveling to nearby concerts is pretty cheap. If you drop the idea of trying to sell an album in stores (payola!), and doing continent-wide tours, it's not all that expensive to spread your music to fans and enjoy a moderate return on investment.

Well there are also people like Jonathan Coulton (the guy who sings "code monkey") who started with nothing and built a fan base. Also he did the ending song for both Portal games.

No doubt there are examples of people who built a fanbase online from nothing.

But I'm sure it helps a lot if you happen to write songs that appeal to nerds and then get featured on slashdot as a sort of novelty act. I don't see that working as well if you write earnest alt-folk love songs instead of songs about Mountain Dew.

Incidentally, there was a story about Coulton on NPR not long ago [1].

[1] http://www.npr.org/blogs/money/2011/05/14/136279162/an-inter...

But I'm sure it helps a lot if you happen to write songs that appeal to nerds and then get featured on slashdot as a sort of novelty act.

Isn't that kind of the whole point though? You can't just be a no-name, release some music that is very similar to a large number of artists in a popular genre of music, and then expect to hit it big.

But he worked so hard, don't you get it?

The internet is not restricted to nerds anymore. Sure, your average musician isn't likely to get a mention on Slashdot, but there are about a zillion different forums/blogs/etc out there covering a zillion different topics, and if your music appeals to even a small subset of them you can get some pretty cheap advertising. And if your music is good, you can start to build off of that.

I think the important fact is that this worked. If this did not work even for someone with a sizable reputation and fan base, then the outcome would be bleak for those who do not. Plus as more people follow this path with success, even those who do not can benefit. The studios and other agencies may have to compete with this model, and in the process hopefully improve the current model for those who are still under it.

I had never heard of Pomplamoose before stumbling upon them on YouTube. They seem to do well. Jonathan Coulton has been mentioned, who I knew before Portal came into existence and made him even more famous. Can't remember how I found out about MC Frontalot, but I bet I never would have heard about him at all in times before music production and distribution became virtually free.

Novelty acts? Sure. But they're proof that it's possible to become reasonably successful without the help of traditional media outlets if there's an audience for your work out there (I think most artists are–understandably–delusional about this one).

Anyway, I think curation is becoming more important and influental nowadays. And curators used to be much more (totally?) dependent on what the industry decided to provide them with.

It is no more so. I see no reason to worry about that (being a recording and performing artist myself).

"quietly worked in the trenches, perfecting their craft, sometimes for decades, before they hit their big breaks. But big breaks were necessary conditions of becoming superstars"

Right and I would add that the model also worked because the supply was constrained on talent by the those offering the break. It's possible that we will hit (and are already hitting) a talent saturation point there is only so much entertainment pie that an individual will pay for or needs to consume. I mean my time reading HN takes away from the time that I used to spend reading other sites.

Just look at Markus Persson. He was a relatively unknown indie game developer until Minecraft.

This is exactly what I was thinking. No one knew who he was, and I'm still seeing Minecraft as one of the most popular apps on the iPhone.

It's currently the 25th highest grossing app, 12th if you exclude all the free games that rely on in game purchases.

The fact that my wife knows what Minecraft is speaks worlds, when I barely get her to pick up an xbox remote, let alone think she'd find an obscure indie developer.

More valuable than the long tail is that he probably has an email list of ~20,000 people -- and more by the hour -- who have demonstrated interest in paying money for Louis C.K. comedy specials. I trust I don't need to tell you what to do with that if you're the exclusive producer of Louis C.K. comedy specials.

He makes it seem like he won't be using that list:

> and they would have owned your private information for their own use.

> You never have to join anything, and you never have to hear from us again.

And I think Louis CK is going to be Louis CK's EP from now on.

EDIT: Forgot about the "don't contact me" default on the purchase screen.

When you go to the purchase screen you can choose between "contact me," and "don't contact me." To Louis' credit the default is "don't contact me," but I as a fan actually opted in to receive future notifications. I fully expect to be notified next time this opportunity arises (and I am probably not alone).

I opted in as well. I was sort of disappointed that the results of the "opt-out sub-experiment" weren't discussed in this statement. He's mentioned it in interviews - on NPR and repeatedly on reddit, at least - that he's got huge feedback on that little decision. It's also something that people, present company included, love to talk about. It would be interesting to see how many people decided to opt-in because he defaulted to opt-out.

You can opt into getting emails from him, when you make the purchase.

He made the list opt in, so if you didn't want to hear from it that was the default.

I'm curious where you're getting the 20k figure from. He mentions only that he's sold over 110k copies, but not what percentage of people opted in to the mail list.

Its a guesstimate based on what clients of mine or I get for opt-in in similar situations, with a discount based on his customer population disproportionately being Redditors or demographically similar to them. I figured "Meh, 20% sounds about right."

Fair enough.

Louis C.K. has 800k followers on Twitter too, and he was talking about it there too (that's where I discovered what he was doing).

Trent is not part of radiohead; Radiohead and Trent(nine inch nails with ghosts) did the same thing but at different times.

> Radiohead and Trent(nine inch nails with ghosts) did the same thing but at different times

Not exactly the same thing: Ghosts I-IV was fixed price(s), provided lossless downloads, under a very permissive CC license and the first quarter was put on torrent sites directly.

Similar yes, same no.

You are correct, though I meant same as in experimented with direct distribution and alternate pricing schemes.

My comment was mostly just to correct the "Trent Raznor's(sic) Radiohead" part of the op.

I'll just throw this out there -- he did an interview with Digg a while back and talked about some of this stuff:

http://www.youtube.com/watch?v=PBxhxVIiwaA

It will be interesting to see the analytics of the sale in a long term model, and see if there is a long tail, or if it's just a stubby tail. Like many, I hope that it is long. But this is currently on a single website, and not through a major distribution channel (one of the initial appeals). If he gets the content onto other services, then I imagine the tail would be longer. He should get it on Netflix, etc, if a true long tail is desired.

"It is the presence of success stories that will get more and more people to move this way."

Absolutely. There's a very recent (<60 years) misconception (among artists and fans alike) that creating (as opposed to performing) music is a standard career choice and if you're at all good at it, you should be able to make a living off of it, and if you're not it's because the labels screwed you over. This causes musicians to vie for the favors of the industry they profess to despise.

These guys going out and actually making it happen on their own (even if the initial entrants have a historical advantage) will erode that sense of entitlement, and thus erode the willingness to submit to the industry that artists have.

Eventually, hopefully, musicians will be busting ass, giving away their music to fans early in their career, and getting increased funding/patronage as they go along, just like every other artist has since ancient times, not positioning themselves for a deal and being depressed if there's no A&R people at their big show. The most talented will likely still get rich, the one-hit wonders will go back to their day jobs, and if we're lucky, music will again be created by those who love doing so.

I really believe content distribution has to work this way, so much so that we've created a site (http://momeant.com) that allows you to enjoy content and then "reward" it after the fact. As Louis proved, audiences will support something they find value in, especially if the price is spread across a large volume of people.

This is so true; and so well deserved! I'm 'guesstimating' wildly, but would not be surprised if the end revenue for 12 months hit $3.5+ million for this 'project'.

Again: Well deserved and I for one feel like I got $100 worth of awesome, for a bargain price!

Reply on news.ycombinator.com