Traditionally music was distributed through the radio or in hard copy through records, tapes and CDs. In the modern world music is increasingly distributed online, purchased through sites such as iTunes and streamed online through sites such as Spotify.
For many new bands this affords opportunities they wouldn’t usually have had, simultaneously presenting a similar number of pitfalls and problems. Despite complications with catalogue numbers and correct licensing, 2016 saw 45 billion audio streams in the UK served through digital services, which is a 68% rise on 2015.*
In this episode we take a look at what the film and video industry can learn from the music publishing industry, what social currency is and how you can exploit it, and also why this weeks guest, Matt Parsons, thinks that “music is worthless” – yes, that’s a direct quote from somebody who works in the music industry – I’m intrigued!
Matt Parsons of Ditto Music
Back in 2005, Matt Parsons with his brother Lee founded Ditto Music, an online music distribution service that gained widespread recognition in 2007 by guiding one of their artists in being the first unsigned act to score a Top 40 single in the UK charts – a Guinness World Record!
Now with offices in Liverpool, London, Melbourne, Stockholm, San Diego AND Nashville, plus 13 UK Top 40 hits and 85,000 artists in over 100 countries, Matt is one of the leading industry experts for unleashing music into the digital world.
I caught up with Matt at his Liverpool office …..
SCOTT LEDBURY: Hi Matt, thanks for joining us today, to get straight into it; what is involved in releasing a song or album?
MATT PARSONS: The first thing is to have a recording that you’re happy with, don’t rush the creative process, get it mastered correctly and so forth. You need to upload it to our website, you need to have certain codes attached, mainly for tracking reasons.
So when it goes out, stores won’t take it without them, the stores need the codes for sales tracking. These are usually only provided by a record label, but we provide it free on our website. Then the next thing that most people forget to do, is to promote it. Bands often contact us the day before a launch, and just throw the song or album out there.
SL: In a nutshell, as you need the uniformed catalogue numbers, could an artist do it themselves?
MP: They wouldn’t be able to get the codes by themselves without a record label. When Lee and I started this company in 2005, there was a whole rigmarole of us getting a record label so we could get our ISRC codes, the whole process took about six months of filling in forms – it was a nightmare. So we adopted this process where people can get them in a few seconds.
SL: So for the uninitiated, you are an umbrella record label, that can publish music on behalf of artists and get their royalty payments back to them?
MP: Exactly, we operate as a record label for the artist.
SL: So you publish music on a plethora of digital platforms, distribution and reach is key, different territories have different policies.
MP: We want to get the artist on as many platforms as possible. The worst that could happen is you make more money. With our packages, you automatically put your music out every store, an artist has to opt out of going on certain stores. Some artists have opted out of going on streaming services, that we’ll talk about later. As far as territories, we go worldwide to everywhere that picks up the internet.
iTunes goes out to 111 countries, however there are six countries that you can’t go to if you have explicit language, for example the UAE. I was in Australia, a couple of years ago, where Spotify is just starting – their digital culture is a few years behind us. Only 5% of the population knew what streaming was. Whereas the UK, US, Sweden most people stream music rather than downloading it. The younger population are digital natives so streaming is seen as a natural option.
SL: It’s not just putting the music on the platforms, do you need to compliment that with some PR and social media?
MP: A lot of tracks on iTunes have never been downloaded. Recent stats showed that 20% of Spotify content has never been listened to once. Because there is such a saturation of content, we release about 500 tracks a week, other distributors and labels are releasing as many if not more, there are thousands of tracks going on.
The most important thing we tell bands is two words: Brand Communication. How do you communicate their brand to their potential customers.
A lot of artists, sit waiting for a label to knock on their door. The brand communication involves social media, involves going out and playing shows. An artist that we’re working with, Dodie Doddle, is a YouTuber with 800,000 subscribers, an indie folk girl with a ukulele.
Her brand communication is massive, so her album went Top 40 as she sold thousands of copies. She understands how to communicate with her fan base. Times have changed, there’s an older generation who like to go to shows and buy CDs.
If you’re doing that sort of music, play shows and sell some CDs. If you’re a younger band with a target audience of 14-30 make sure that you’re engaging people through social media and YouTube. If you had a friend, and all he said was ‘Look at me, look at me’, you wouldn’t be friends very long.
You need to interact with your audience, the way that social media affords. There used to be a separation in between the artist and their audience and that was lauded in the 80s and 90s. But now you can actually communicate between the two – which is what you need to do.
SL: That engagement leads to traction, all a part of the package.
MP: There’s a rapper we work with, called Shadez the Misfit, he’s an independent musician, makes a decent living. We went out for dinner in London and he got a free meal, money he can then spend on recording and promotion. And all he did was take a picture of the restaurant logo and posted it on his Instagram feed, which lasted 24 hours.
You could call that social currency. He has clothing brands that pay him to wear their clothes. So it’s not just about him playing shows and busting his gut to get the music out, which he does, there are so many other ways that artists can get money. Getting paid by brand to interact with them. That’s how artists are making money these days.
SL: That’s essentially payment, payment in a different way.
MP: That’s right, social currency, payment in kind. How much would it cost for the restaurant to give a free meal, but they know that they’re getting the advertising, people seeing their logo. It’s about traction, it’s about this new social currency, that artists realise doing all these other things which aid brand communication that eventually puts money in their pocket.
SL: There has been a lot of negative press about streaming and royalties. Can streaming and downloading co-exist? Why would you download when you can go ahead on a streaming model?
MP: They can co-exist easily, because it’s more ways of making money. The downloading comes down to brand communication. The financials have changed a great deal. Five years ago, 80% of our artists money was coming from iTunes downloads.
This money went down and down, and now money in their pocket is coming more from Spotify than iTunes. Currently streaming is outperforming downloading, eventually it will fully override downloading completely.
People only download when they want to tip the hat or endorse a particular artist, occasionally a sense of ownership. There are, to a certain degree, people who still want to physically own something. However with some people, they may have a favourite band, whilst never buying anything from the band.
But if the band is getting more money from streaming than downloads, why not! It’s the way the industry if shifting, but this is within the younger demographic.
The new music industry, which is the tech industry that’s gone into music, has given the people what they want.
Whereas previously, cassettes and CDs cost a fortune, that was the music industry telling people you had to pay a certain amount, even though it cost comparatively little to make. Whereas with the streaming thing people are getting what they want.
SL: So the TV, Video and Film models, with what we’re hearing about streaming through Netflix and videos, is is possible that they’re learning from the mistakes made by music?
MP: These tech companies realised that give people what they want, give them streaming and eventually you’ll make more money off it. That’s the opposite of what the record industry did for years, followed by the cinema and TV industry, people prefer to pay a certain monthly fee for as much as they want. Lee and I wrote a book a few years ago called ‘The Future of Music’ and it had the concept that music would be like water, you pay a monthly fee for it.
In theory you can get it for free, but it’s about how you consume it. The Tech companies realised that people care about how they consume the music. Like with Spotify, they consume it through their iPod or phone or computer, they don’t even own a hi-fi anymore, so why would they buy a CD. Tech companies gave them a medium where they could listen to the music the way they wanted to, don’t force them to buy something they don’t want. It’s cooler for a young person to have a certain way of listening to music, as opposed to the music they’re consuming. If you have the white ear buds, you have a Apple device.
SL: Over the years, some artists such as Radiohead have tried the model of pay what you think it’s worth, crouching on the market of kickstarting and crowdfunding. How does that sit with you as a model?
MP: All I know is what independent artists think and care about, and that doesn’t work for them because they haven’t got the fan base to support it.
On the other hand people do go for services like Bandcamp where you can give music away for free. Which is fine, but you need to remember your social currency.
I was speaking with John Brooks, talking about one of the old Charlatans releases, they gave away a album but they didn’t actually collect any email addresses. So they gave away music to thousands but they didn’t have any details of who had taken them.
Services where you can give your music away for free but you have to sign up with your contact details, so the band can contact you in the future.
Music these days is pretty much worthless. Recorded music these days is pretty much worthless!
That’s what the market says, ‘I can get it for free, why should I pay for it?’ It’s a means to an end, a way to get people in the door so they can buy other things. When you put that together with a package of brand communication and connecting with your fans, obviously the music is in there somewhere. But the music is a means to an end.
The aforementioned artists are making more money off brand partnerships than off their music.
SL: If you said to some musicians a few years ago, there would have been some resistance to the idea that the brand is more important than the music, is that a hard message to get through to some creative artists?
MP: Absolutely it is. If you don’t think about the music as a creative person, you won’t come out with a good product. If you’re thinking purely about the business your product will be no good. Whatever creative medium you’re in, you have to start with ‘I love my craft, I love doing this’ otherwise your final product will not be worth anything.
At some point you have to let go and realise that you can have the greatest product in the world, but if no one’s heard it, if no one wants to interact with you, you won’t have a sustainable career.
SL: You have to take the craft and interact with it, get the social currency right, which is where you guys come in?
MP: That’s why companies like mine exist, because it’s not natural for musicians to be marketing experts. So they do their thing, make great music and we package it and work out how to communicate with their potential audience. I’d say its more important to interact with people they don’t know yet, rather than those they already know.
It’s the same with SEO (Search Engine Optimisation), all about appealing to new people who don’t know you exist. A lot of artists say that they’re doing really well on Google, if you type their name in, they come up – but what happens if you don’t know the bands name!
SL: What are the dos and don’ts in terms of getting out in front of people?
MP: One thing independent artists often miss out on; they spend months writing their songs, weeks on recording them – but mere seconds on their artwork. Out of experience, if the artwork is terrible, the music is often terrible as well. If you’re passionate, image is everything – especially now with all the saturation in the market.
People see your music online and see the cover artwork, see the picture of you as a band, why should they bother with your music if the artwork is a load of rubbish. You may have the greatest present for your wife, or girlfriend in the world, but put it inside an old burger wrapper it won’t have the same effect. Its all part of your brand communication, to actually get people to listen to it in the first place. It needs to be put in front of people in a way that’s attractive to them.
SL: What can the visual industry learn from what you’ve done in the music industry?
MP: The main key is to give the people what they want. I’ve noticed with Netflix and Amazon Prime, the average man’s communication with the Movie or TV industry, nowadays when I go onto Netflix there’s hundreds of shows made by Netflix.
These companies are now a massive databank of peoples viewing habits and they make shows out of it. Like Top Gear, going onto Amazon from BBC, I guarantee that they’ll be making more money. Its giving the people what they want and looking at new business models, backed up by Big Data.
SL: Backed up from the data industry world we live in, commissions are now all built on data?
MP: Most of my industry is built on data, overlapping in the film industry. One big thing with Spotify at the moment is play listing for independent artists. The way that Spotify make their playlists, they have up to the minute data about every single song.
If something suddenly gets traction, they’ll hone in on it, analyse it, check its following and if they’re happy with what they find put it on a playlist. This means that someone who’d never heard of the band listens to it, the band sells tickets, t-shirts gets more traction – makes money.
So really being in tune with as much data as you can manage, so you can track the movement of the trends within your industry.
If you’re putting a film production together, what film productions have used certain techniques, find parallels and relationships in between this and other productions – what had success. Keep up with what’s going, not just what you’ve created but packaging it in a way that’s attractive.
SL: Thanks very much for your time, that’s brilliant, we’ve learnt a lot.