On one hand, recording technology has enabled the recording of high resolution audio. Most studios these days are able to record at least 24-bit/96Khz. Some studios have the capability to record even higher sampling rates such as 192Khz. This increased sampling rate smooths out the digital audio making it a more accurate representation of the original sound wave.

Hearing a recording like this over great speakers is an incredible experience. Yet that’s not how the vast majority of us listen to music.

In contrast to the advances in the production of recorded music, technology has also affected the way we listen to, or consume, music.

The CD serves as a de-facto, though declining, standard for music delivery. CD audio is served up at 16-bit/44.1Khz, far below the resolution now possible for recorded music. And if you’re anything like me, you rarely listen to a CD over a good set of speakers. My first listen is generally over the speakers in my laptop. If I like what I hear, I “rip” the CD to AAC files for playback on my iPod.

The AAC files are simply a newer standard than mp3, delivering a slight increase in quality and decrease in file size. Nonetheless, these files are highly compressed and there is a distinct loss of audio quality with either mp3 or AAC. Even so, this is my preferred listening format, simply for the convenience of it.

I listen to these compressed files over the speakers in my laptop, my iPod earbuds, or my car stereo via iPod playback. And I have to say, as one who works in the recording industry, I don’t mind the loss of quality. The favorable benefits of having my music with me wherever I find myself, far outweighs the downside of the reduction in audio quality.

For me, the quality of the music itself is far more important. Is it a good song? Is it well played and sung? Is the arrangement interesting? And on the recording side of things, the important factor isn’t the resolution, it’s tones and the mix. The quality of the tones captured comes through even in and mp3. And the mix is the most important part. If the recorded resolution is as high as it gets, but the mix is bad, I don’t want to listen to it. If the mix is good, I’ll tolerate a low fidelity file.

I would encourage all the artists out there to keep this in mind. I don’t think I’m alone as a music consumer. The quality of the music is much more important than the quality of the recording.

His suggestion as to who should wear the crown? Ralph Stanley.

His reasoning for recognizing Stanley is certainly sound, but his premise is wrong.

If Monroe was the King of Bluegrass, the fact remains that the king is dead and the throne can’t remain empty, the crown unworn. Perhaps it’s time to coronate a new King of Bluegrass, and if so the only true heir is Dr. Ralph Stanley.

Two errors of understanding on Baker’s part inhabit this suggestion.

First, succession to the crown just doesn’t happen that way in the music world. No one is suggesting that because Elvis is dead we should crown someone else as the King of Rock-n-Roll. That suggestion would be met with great protest by true Rock-n-Roll fans. The crown is the King’s and he lives on in his recordings. So too in bluegrass, the King may have left us, but his music has not.

Secondly, but just as important, Monroe was never considered the King of Bluegrass. That distinction falls to Jimmy Martin. Baker has just shown his lack of familiarity with the genre, to engage in a discussion concerning the royalty of bluegrass, and mistake the King.

He does acknowledge Monroe’s rightly deserved, and highly honored, title as the Father of Bluegrass, and gives Dr. Ralph perhaps a very fitting title at the same time.

Bill Monroe is widely recognized as the Father of Bluegrass, and so, in that context, perhaps we can consider Ralph Stanley as the genre’s kindly Uncle ‚Äî the guy who teaches us about life and ourselves without inflicting the unflinching discipline and judgmental subjectivity of our old man.

Baker should have stopped there with the giving of titles. I think most of us bluegrass fans would be perfectly OK with Uncle Ralph. But then, that wouldn’t have worked with his angle: The Bluegrass of King, The King of Bluegrass.

Still, it’s not Stanley’s sizable global accomplishments that will be honored at Sunday night’s Cincinnati Entertainment Awards but his local connection to King Records on the occasion of the label’s 65th anniversary.

The recognition of King Records’ 65th anniversary, and Ralph Stanley’s connection to the label, are worth celebrating. I love Dr. Ralph’s music as much as the next trad-bluegrass fan, but let’s not be so quick to attempt the coronation of a new King. Jimmy’s music is alive and well.

All hail the King! Honor your Father! And enjoy hanging out with your Uncle!

The cost of sending out several hundred CDs is quite high. If you’re sending out an actual production copy, which is what most journalists and DJs want, it might cost as much as $4 per disc. Here’s the breakdown. The disc costs you roughly $1. Then you’ve got the cost of printing a one-sheet, bio, and any other promo materials you’re including in the package. And then you’ve got the mailing costs. Next consider the added cost of hiring a PR agent to work the release for you. That can cost anywhere from $2,000 – $10,000 depending on how good they are and how long you let them work it.

And the result? Some radio airplay, a story here and there in a paper, magazine or website, maybe even a gig or two get booked as a result, or you could sell a few CDs. Odds are though, that a good many of the promo CDs sent out just ended up at a used record store.

The artist, the label (if there is one), and the songwriter all lose out on income when someone buys one of those promo CDs from the store. They lose the money they would have made, had this person been of a mind to purchase the CD legitimately. That can be questioned for sure. I blogged about this same topic back in June, when a court case made the resale of promo discs legal. Legal it may be, but taking the cost of the promo into account, someone did lose some money on the deal.

I’m not condemning those who are selling, or for that matter buying, the promo discs. I’m just asking the question, why did you send it out to begin with?

What is the point of promotional CDs other than to serve as a visual reminder to a tastemaker? Do we really need them anymore? Is it worth the waste the mailings generate? And for music critics, does earning a spot on the gravy train even ensure that she will be more plugged in to the vast array of music available in 2008?

Those questions are asked by Randall Roberts in a piece he wrote in September (which I just now discovered) for the LA Weekly.

His answer is, no. The environmental (I’ve got a lot of plastic sitting in a pile on my floor), economic, and time costs associated with mailing out hundreds of promos, just aren’t worth the returns. Send your promos digitally and you save time and money. Not to mention making it easier for journalists like myself to deal with the promo. DJs may still want a hard copy, but I don’t. Every CD that was sent to The Bluegrass Blog this year went strait into my MacBook Pro for a listen. If I liked it I imported it to iTunes. If I didn’t like it, it went in a stack that I still haven’t dealt with. And if we chose to write about it, we had to go looking for a digital copy of the cover art anyway. A digital promo would sure speed things up for me, and a lot of other journalists.

I’m not saying you should stop sending out hard copies. Many DJs will still need/want them, especially bluegrass DJs who are volunteers and have to supply their own music for the show. Taking some time to work through your PR list and find out who would benefit from a digital version, should pay off for any label or band who plans to promote more than one recording project next year.

Put me on the digital list.

Andrew Dubber tackles these questions in a recent blog post, Has music been devalued?

Dubber shares a lesson from history, in which musicians and composers in the early 20th century were worried that recordings would ruin the music business and put them all out of work. After all, if people could listen to recordings for free on the radio, why would anyone hire a band, or buy sheet music? The truth is, the business didn’t die, it just changed.

The industry changed. People learned how to make money, lots of it, from the new recordings. It seems we are facing a similar restructuring of the music business now that the physics of the media have changed, and I’m sure some savvy people will discover ways to profit in the new environment.

Dubber’s conclusion bears repeating.

But more people listen to, engage with and enjoy more music than ever before. It’s not only valued, but prized. Personal identity, association with a sub-genre ‚Äòtribe’, clothing style, use of language, socialisation and a great many other cultural factors are now entirely predicated on music. Far from being devalued, for a lot of us – it’s pretty much the most important thing.

So – to take what might be seen as a provocative stance, I propose the following:

1) Claiming that ‚Äòmusic has been devalued’ is both entirely defeatist and a complete cop-out;

2) Blaming everything and everyone else for the problems you may be facing as the world changes around you makes you come across, like Sousa, as a miserable old sod;

3) Recognising the fact that you haven’t yet found a way to tap into the ways in which people now consume music (but that such a way does exist) might just be the key to solving the problem of extracting commercial value out of the immense cultural value everyone’s getting out of music – more than ever before.

Read it all.

He explains that the sale of physical product, CDs, continues to decrease, and while digital sales are increasing, they aren’t making up the difference. Further, as the market becomes more single driven than album driven, the value of a unit of music is further decreased.

His response to this situation?

I don’t care.

He’s not just cold hearted toward the business. His reason is that continuing to think about the music business in these terms isn’t helping. He equates it to talking about the death of the cassette tape during the era of the CD.

The difference is that when we moved from cassette to CD the winners were the same (big companies who owned access to cash, distribution, and marketing) and the definition of winning was the same (more units sold for these big companies).

The game has changed though, not just from one physical format to another, but the physics of the media itself has changed. He concludes that the definition of winning cannot remain constant in light of this major shift.

He quotes Chuck D from Public Enemy as saying earlier this year,

There is nothing wrong with the music business, there is a problem with the CD business.

He goes on to argue that there has been no decrease in the rate of music consumption, or an unwillingness to pay for music. 2007 saw an increase in the number of “decisions to buy music” over 2006. Sure those decisions were mostly for single tracks rather than bundled albums, resulting in less music being sold in total, but he doesn’t address that. What he does address is the perspective that should be taken when evaluating the industry.

I’d like to challenge you to consider a different perspective, IMHO the only perspectives that matter, that of the artist and the fan. I see news about the health of the music industry as defined by the stock price of WMG or quarterly earnings of UMG, Sony, and EMI every day. What I don’t see, apart from a few articles on Radiohead and Nine Inch Nails, is an update on how the world is changing from the artist point of view. [emphasis his]

His point is that the new landscape, with the internet making digital delivery so easy, favors the artists and fans. He posits that we should begin to think less in terms of volume of music sold, and the effect of declines in sales on labels, and start to think more about the idea of “marginal profitability for artists and value to fans.”

The idea being that increased profit margin from direct sale releases can increase an artist’s income even if they sell less than they might have 5 years ago via physical distribution. Digital delivery certainly lowers per-unit cost considerably and makes delivery easy. The artist/label can make the connection directly to the fan without a distributer, and a retailer in between. And the percentage of revenue kept by the artist will be much higher.

By offering various price points for different bundles of music + other content/goods, the business can move away from a one-size-fits-all model of product delivery, toward multiple “target-marketed” approaches. For example, you might offer free downloads of a few tracks, $5 download of more tracks + PDF “liner notes,” $10 download + CD, $30 (or more) for some sort of deluxe/limited-edition-you’re-a-real-fan package.

He tells the story of a relatively unknown artist who has done this and enjoyed great success. And he thinks it can happen again for many others.

…there is an entire middle class of artists for whom the system hasn’t worked in the past who will be empowered by this new model…we don’t think they’ll ever end up playing the Staples Center, and we don’t care. We are more interested with seeing marginal profitability for more artists and satisfaction for more music fans increase.

He continues and discusses the idea of artists structuring their own “360 deals,” the steps the lables need to take to become valuable partners with artists, and value of greater consumer choice for the fans.

I think he has some good ideas that the bluegrass industry would be wise to learn from. Stop worrying about getting bluegrass music in Wal-mart, and start thinking of new ways we can connect directly to fans, new and old. It’s more work, but the payoff is there.

Iif you care about your future in the business, I suggest you take the time to read Roger’s keynote.

Much of the site’s content speaks to the intersection of religion and culture.

One week ago, one of the authors, Noah Berlatsky, posted a blog entitled Bluegrass Apocalypse. In the article he states that

Bluegrass has been transformed from a mostly played-out festival circuit relic into a viable commercial force. But at what cost?

He then attempts to explain this transformation as the result of efforts to

Polish bluegrass up, recruit a female singer, and capture a bigger audience

You know of whom he speaks, Alison Krauss. Berlatsky describes Krauss’ music as “vaguely spiritualized prettiness” and then goes on to make this incredible statement.

As this suggests, I loathe Alison Krauss’s music in all its obsessive, over-produced perfection. To me, it sounds like every note on her albums has been focus-grouped, voted on by committee, and then carefully performed by a soulless government functionary. The vestige of rural authenticity — the tunes, the fiddles ‚Äî are there almost for purposes of ritual emasculation.

Joe Carter, another author on the site, responded with his own piece from which I took the title of this post, Bluegrass Blasphemy. Carter takes Berlatsky to task for being an “urban, over-educated atheist,” and defends Alison’s honor as the primary instructor who gives “singing lessons to the seraphim” in her spare time.

Berlatsky then responded on his personal blog by saying that Carter, indeed anyone who claims “country authenticity,” is simply a poseur. His reasoning?

…country has gotten to this place where credibility has everything to do with liking this or that product, and very little to do with any actual values or morals. Rural identity is just another affectation, bolstered through arbitrary product purchases.

Krauss’ music is the result of sheer giftedness combined with countless hours of rigorous devotion to a craft. Berlatsky seems to have equated inauthenticity with this exceeding excellence.

As someone who grew up in a rural community and currently lives another, I rejoice to see the virtuosity of the practitioners of the bluegrass arts. In no way do I find them inauthentic, or think them to be poseurs.

The team consisted of 19 students and faculty members from the seminary. The team put together a bluegrass band comprised of seminary students, and used the music as a means to draw a crowd. Other team members then interacted with listeners and attempted to steer conversations to the Gospel.

My impression from the article (available here) is that the music enjoyed a warmer reception than the message. The students did learn valuable lessons about sharing the Gospel in another culture. Newfoundland may not be that different from American culture in general, but from the culture of Louisville, KY there is considerable difference.

Sometimes you can take something that seems incongruent, like bluegrass and Canada, and those two actually have a common denominator in that they can tie together to get a hearing for the Gospel.

It seems bluegrass and the Gospel can cross cultural boundaries.

If you’re interested, you can read the original article here.

According to a Reuters/Billboard report, Cherryholmes is remixing – with added piano and drums – This Is My Son, one of the cuts from their forthcoming album, Cherryholmes III – Don’t Believe, and releasing it as a single to be promoted to country radio.

The band has a few other ambitious plans that make this fall a very busy time for them.

You can read the full story at reuters.com.

There are audio samples from the new CD at the Skaggs Family Records’ website.

[Music fans] might buy a few tracks from iTunes when they get a new iPod for Christmas, but few go on to become regular paying downloaders. The statistics are obviously worrying, but the research does offer clues as to how fans who merely dabble can be encouraged to engage fully with licensed digital music services.

That according to Tim Walker, managing director of The Leading Question.

Here are the five steps these two companies are recommending.

1. Music needs to be bundled with other products and entertainment packages: Value can be created from many other ways than consumers simply buying the occasional download. Music needs to move away from per unit sales and become more of a service than a product. It should be pre-loaded into devices, bundled with mobile tariffs, offered as part of TV/Entertainment/ISP packages.

2. Labels needs to experiment with new release schedules and formats: The old model of single and album releases has run its course. Labels needs to be more innovative if they are not to be freezed out altogether. Look at the likes of Radiohead, Nine Inch Nails and Prince and experiment with new and varied formats, new pricing models and release schedules, digital only releases and promotional partnerships with brands.

3. Free doesn’t mean no money: The music industry should not fear free. It needs to embrace it. The culture of the net is free or at least feeling free. But money can still be made from other sources: everything from advertising supported services, to brands paying for an association with the artists to newspapers paying for giveaway CDs.

4. Change the charts: The Charts don’t make much sense anymore. Now that fewer and fewer people are buying music the charts need to reflect the other ways that people are consuming music.

5. Trust the DJ: Online means anyone can access or own John Peel’s entire record collection, but the instant and massive availability of music on demand means you need a trusted guide like John Peel more than ever. The new layers of value will come from the social connections that come about through music as much as from the music itself.

How does this work for Bluegrass?

1. The latest bundling product that I’ve seen in bluegrass is The Infamous Stringdusters’ new CD being bundled with a live CD download. This isn’t really a bundling with a non-music product, but it’s a step in that direction.

2. I’ve been saying for some time now that bands should semi-abandon the 12-track CD for releases. Write 2 or 3 good songs, go in the studio, record them and release them as digital downloads. Once you’ve done that 5 or 6 times, then compile them together into a 15-track CD for those that didn’t download. The problem with this model would be missing out on IBMA album awards. IBMA would need to adjust it’s awards to suit the new model.

3. This is tricky for bluegrass. The market is realatively small and it will be difficult for bands/labels to entice advertisers/sponsors to foot the bill. I’d like to see someone pull this one off though. I remember hearing about a rap artist that partnered with Sprint. Sprint paid a healthy sum to occupy the album artwork on a couple mp3s that were then given away. Every time someone pulled that song up in iTunes or on an iPod the Sprint ad was displayed where the ablum artwork would normally appear. Interesting idea…

4. I think sales charts are still useful, but shouldn’t be the only ones we consult. Radio airplay is important, and let’s include the major online stations in that chart. Maybe a chart built on iLike somehow?

5. Again, charts such as airplay and iLike would help users find music they might like because of recommendations from people they trust.

Any additional thoughts?

Variety.com is reporting that CD sales during the Christmas shopping season were down 21% from 2006.

From the week of Thanksgiving up through the day before Christmas Eve, 83.9 million albums were sold, a decrease of 21.38 million from 2006’s 105.28 million.

What this doesn’t take into account is the sale of gift cards for downloads. I received an iTunes gift card for $25 as a Christmas gift and have yet to spend it. That’s the equivalent of 2-2.5 albums depending on how you count. The thing is, I won’t spend it all at once, and I most probably won’t purchase entire albums when I do spend it.

These declining sales numbers don’t necessary represent the current state of affairs for the bluegrass industry, though I have heard a number of artists speak of drooping CD sales in the last year. The decline of major label CD sales will affect our little niche in the industry though.

As sales continue to decline, at some point retailers will decide they have a better use for floor space than CDs. When retailers like Wal-Mart start shrinking the amount of shelf space dedicated to CDs, the sales will slip even further since the consumer won’t be able to find the CD they’re looking for in the store. My guess is, this will drive even more people online in their search for music to purchase.

A good selection of bluegrass music isn’t readily available in most retail stores as it stands, and when they start cutting shelf space, bluegrass will probably be one of the first genre’s to get pulled. The downside for our industry is that the music might not be available online either, which means it simply doesn’t get purchased.

If a large and varied selection of bluegrass were available online from retailers such as iTunes and Amazon, we’d still have to compete for the consumer’s attention, but at least we’d have a chance.

So let’s have a poll. How many of us received a CD or download gift card for Christmas?

After seeing the recent AP story of a low-rent Tucson bar owner sued by ASCAP for $210,000 for failing to obtain a license to perform copyright protected material, I am convinced something needs to be done to restore a sense of order and fairness in the world of performance rights. Too many small bars, coffee houses, restaurants and other venues have given up hosting live music due to onerous licensing fees, which do not directly benefit the musicians whose music is being covered since these fees are paid to all members according to a formula based on overall record sales – not the individual copyright holder whose creative work was performed or exhibited.

Without those incubator sites, where will future generations of musicians find a fan base and learn to entertain a live crowd, discover what material stirs their souls, and learn to discern the subtle differences between hot licks and true music? Without just, equitable payments based on actual popularity of a copyrighted work, how can the artists creating it survive and create even more?

The answer, I believe, must come from within our own industry. Each musician must stand up and say that without venues where new talent can grow and develop, without fear of onerous copyright fees and performance royalties, music as a commercial activity cannot survive in a digital age. It is the songwriters and copyright holders themselves who own ASCAP, BMI and related groups, and it is up to them to lay down the law and say that without a fair, equitable means of establishing exactly what copyright-protected music is being performed with direct compensation to the individual copyright holder, then no fees should be collected. And the same holds true for digital downloads, file sharing and other means of digital distribution.

Of course, the very same debate rages across all areas of creative expression in today’s online environment. Every artist, I believe, will eventually have to become their own agent, copyright enforcer, distributor, promoter and collection agent to survive in this new era. Great opportunities exist, I am certain, for new business models to arise that pay musicians, graphic artists, writers, photographers and other creatives on a per-user basis based on unique visits to websites, downloads, file sharing fees, one-time licensing fees and other financial mechanisms that allow the audiences who are enriched by the genius of an individual human mind to provide the financial support that makes such creative endeavors possible. Create a digital watermark, for example, so that each time it appears on screen, on iTunes or an mp3 player, is used as a ringtone or whatever means of digital utilization can be imagined, a fair fee automatically goes to the originator. If you’re looking for the next Google, folks, here it is.

Humanity is lost without art that expresses its collective soul and heart. Like all media revolutions starting with the first cave paintings, artists must utilize that very same creativity to ensure they are rewarded for bringing art into this often soulless and pain-ridden world. Musicians survived sheet music, player pianos, wax cylinder recordings, radio, broadcast TV, MTV, Napster and more. Surely we can develop the appropriate legal and financial tools necessary to survive ‚Äì and thrive – in an era of file sharing and “free” online content.

End of soapbox – for now.

David J. McCarty
Copyright 2007, all rights protected and reserved

The slate of panelists invited to speak includes the groups that have been active in the roiling debate over these new rates – artists and labels likely to insist that the new rates provide them a fair share of income generated from their work, the musician’s union which will agree, and public radio and webcasters who will declare that the new rates hamper their ability to offer a wide variety of music programming online.

We should mention that banjo player, songwriter and storyteller, Cathy Fink, is among the artists invited to speak.

In a number of previous posts on this topic, we have noted disagreements erupting within our bluegrass community over this debate, breaking into the same camps as indicated above.

At The Bluegrass Blog, we encourage the artistic side to be wary of the incentives that these new rates create for businesses who produce – or might produce – web radio content that features bluegrass, old time, folk or acoustic music. Regardless of the intentions of this new structure, making it far more costly for our music to be streamed online will inevitably result in less of it being heard on the Internet. In a narrow, niche segment of the market, we see little gain in artists/labels fighting for a larger share of what would become a rapidly shrinking pie.

Further, we feel that the direction the market is taking is one where distribution as we have traditionally known it becoming ever more irrelevant, and the ability to filter content and promote/publicize your music online will be the dominant factor in increasing sales. This is not to say that a royalty rate where artists and songwriters get a larger share isn’t a defensible position, only that looking for it as a replacement for income lost by declining CD sales might end up throttling an important promotional vehicle in its cradle.

Tomorrow’s hearing is set for 10:00 a.m. (EDT). C-SPAN has not yet posted its full schedule for 6/28, as they often make decisions on which hearings are of higher import at the last minute, so check their schedule on Thursday morning if you have interest in catching it live – or perhaps shown pre-recorded later in the day.

UPDATE 1:00 p.m.: On a related note… Gracie Muldoon, General manager of WorldWideBluegrass.com, has a post on The B where she discusses WWB’s reasons for not going silent during this past Tuesday’s Day Of Silence campaign to protest the new CRB rate proposal.

Before I undertook the writing of this series on music business I wrote about the decline of CD sales and mentioned a book called The Long Tail. I mentioned that book as an information resource to help you understand the way the internet is affecting the marketing and sales of CDs. I know there are objections to The Long Tail and I’ll discuss those in the next post, but here I want to review ideas contained in The Long Tail for those that haven’t read it.

Fist a definition. Wikipedia defines the statistical distribution feature known as the Long Tail, in this way.

In these distributions a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually “tails off.”

Take a look at the image to the right. The Long Tail is represented by the yellow portion of the graph.

The book, The Long Tail, was written by Chris Anderson, editor of Wired magazine. Anderson focusses on the long tail in the retail distribution world. He talks a lot about Amazon.com and Rhapsody (he didn’t have access to figures for iTunes). The basic idea is, the internet has changed the way people shop and interact with culture. Before the internet people only knew about music that was played by local bands or on their local radio, and was sold in their local record store. He describes this as a “world of scarcity” where retailers simply did not have enough shelf space to carry every recording that was available. The ones they did carry were the hits. The hits live on the left side of that curve. There are few of them and they sell a lot.

Our culture, and the marketplace, is changing though. Today young listeners want to be listening to the coolest new thing that no one else has heard yet. I work with the youth at our church and they are constantly wanting to be the one who introduces the group to a new artist. That gives them some sort of coolness points or something. When we go on trips they all listen to their iPods and they are all listening to something different.

The internet has allowed this to happen because they can find music that isn’t even on the radio yet, or may never be, and certainly isn’t at Wal-mart. This music is down in the tail on the right side of the curve. It doesn’t sell millions of copies. People haven’t heard of the artist. It’s not available at record stores, but it is available on the internet.

Anderson approaches this model and says that aggregators like Rhapsody win because they can “stock” so much more music than Wal-mart can (Wal-mart = 60,000 tracks, Rhapsody = +1.5 million tracks). The consumers win because they can find music they really like, that fits them as an individual, and aren’t limited to the “hits” available on radio or local record store shelves. He suggests that there is a lot of money to be made in selling a few copies of a lot of tracks, and I think he’s right. With basically infinite “shelf” space, Rhapsody and iTunes can make everything available and it doesn’t matter to them that a certain track might only sell 5,000, or 5, copies. Total that track together will a million others and you’re making money.

A very, very big number (the products in the Tail) multiplied by a relatively small number (the sales of each) is still equal to a very, very big number.

He goes to say that the sales in the Tail are steadily increasing and becoming a larger part of overall revenue for the aggregaters.

In my next post on this subject we’ll take a look at some objections that have been raised to The Long Tail concept, and discuss ways that individual bluegrass artists can take advantage of and benefit from The Long Tail.

While this blog is mainly concerned with news about bluegrass music, we find these topics important ourselves, and feel that the state of the industry as a whole is important to our many readers who are involved with bluegrass music on a financial level. Ours is a small genre that does differ in many ways from the mainstream music industry, but ultimately we are still impacted by changes to the overall music business.

Like it or not the industry is changing. What exactly are those changes? How will they affect bluegrass music professionals? What about the fans? Will the changes be for the better, or worse? These are just some of the questions you may be asking yourself.

In an effort to answer these questions, I have undertaken the task of writing a series of articles discussing recent changes/trends in the music business, and giving some concrete ideas and examples of how bluegrass bands large and small can navigate these changes and take advantage of the opportunities they might provide.

I’m calling this series of articles The New Music Business and will begin each post title with NMB. I encourage you to share you thoughts, ideas, and questions in the comments section of each post as we go along. Let’s get started!

The first follow up question you want to ask is “Did digital sales make up the difference?” The short answer is “no.” The longer answer is “somewhat.”

Breitbart.com reports that online sales of “digitized albums” fell from 119 million (during the first quarter of 2006) to 99 million. That’s a 17% decrease. What exactly is meant by “digitized albums” in unclear since later in the article they indicate that physical CD sales still account for 90% of sales.

Individual digital track sales did increase from 242 million tracks during the same time period last year to 288 million this year. That’s an increase of 16%. Industry wide though, estimates place total revenue at 25% less than it was a year ago.

So how is this to be viewed as good news? Michael Arrington, author of the popular technology blog Techcrunch, thinks it’s a good thing because it will force the industry to face the facts. (Story here)

The faster music labels realize their massively profitable days are over, the better it will be for them, as well as the bands they represent and us, their customers. Digital music sales are not going to make up for lost revenue. Suing their customer base is not going to make up for lost revenue. In fact, absolutely nothing is going to make up that lost revenue. The industry, revenue-wise, is going to continue to shrink.

As the marginal price of recorded music continues to fall towards zero, its natural price, bands will need to make money elsewhere. Live concerts will become more and more popular, and will be the largest source of revenue for many artists. Recorded music will be used to promote those live events.

I agree with him that the labels need to recognize and deal with the new economy of a changing industry. I don’t totally agree though that the natural price of recorded music is zero. I think the music has value and savvy people will figure out how to leverage it.

He does seem to be correct about live concerts though. Billboard is reporting that 2006 was a banner year for live concert income, showing a gain of 35% over 2005. We’ll see if that trend continues.

My own personal opinion on the whole state of the industry is twofold. First I’ll reference a a post I wrote some time ago on the subject in which I suggested that consumer spending on entertainment media has simply shifted to other formats.

the rise in sales of DVDs (grew by twice the decline in CD sales during the same period) and video games…consumers may be spending their discretionary income on these titles rather than CDs.

Secondly, let me state again that my personal opinion is that much of the music introduced to the consumer via major labels…stinks! People just aren’t buying it because it isn’t good.

Closely tied to that is my third point. The entire industry landscape is changing. If you are interested in the subject I suggest you read The Long Tail. The labels, by nature of their business model, are only interested in hit records. But with the internet at his fingertips, the consumer has been presented with a whole plethora of choices the labels never gave him. And he’s making those choices. People are finding music that appeals to them, but might not appeal to a mass market large enough to interest the major labels. So we see the rise of the independent artist.

This is good for the art form and the consumer, but bad for the labels. I think it’s good for bluegrass as well. If we, as a genre, can take advantage of this shift in landscape to put our music in front of new consumers who are just now discovering that they might like something different, we could see a rise in sales of bluegrass recorded music and ticket sales.

The question is, “How do we accomplish this?” Any ideas?

Here’s a thought – so many retail products (and often services) offer a money back guarantee. Very few artists have ever tried this with music.

Very few? I don’t know of any artists that have tried this. The idea intrigues me though, because I think it might really encourage people to buy your music online. If someone comes to your website and hasn’t heard you perform live, or at least perform this music live, a guarantee might encourage them to give it a try. If you are a member of a band and have solo projects, the fans may have heard the band play, but does that guarantee they’ll like your solo CD? Just how confident are you?

The obvious objection to the idea is that you may run into a loser or two who will buy the music, copy the CD, or just use the download, and then say they didn’t like it and want their money back. That’s ok, give it back to them. They’re the type that would steal it anyway. Most bluegrass fans actively support the artists they love and offering them a guarantee is only likely to encourage that spirit.

It’s a risk, not doubt about that. As every good business man knows though, the amount of risk you take is directly related to amount of potential upside. Playing it safe, isn’t always the safest thing to do.

The first is a rumor that EMI is considering licensing it’s entire catalog to online retailers as unrestricted mp3s. The Wall Street Journal (subscription required to read full story) recently reported on this rumor.

In a move that could signal a shift in the music industry’s antipiracy strategy, EMI Group PLC has been holding talks with several online retailers about the possibility of selling its entire digital music catalog in the unprotected MP3 format, which can be freely copied and played on virtually any device…

My understanding is that EMI at first sought upfront cash payments from the retailers in an effort to insure against what the label deemed “potential losses.” The retailers didn’t entirely like the idea and are now offering counter-proposals as negotiations continue. My take on this is that EMI still thinks that selling their music online, unprotected by DRM, will result in piracy and a loss of sales. If Steve Jobs is right and EMI is wrong, this could provide an opportunity for online retailers who have the available capitol to take advantage of the labels fear by negotiating an initial payment followed by lower per track payments on the backend. I don’t know the details of the offered deal though, and it seems likely that EMI is trying to position itself to gain from either scenario.

Other major labels are taking the defensive against Jobs’ challenge. It should be interesting to watch where this goes in the next year or so.

The second matter is only slightly releated, but an article on the CMT.com website is drawing parallels between Jobs’ attitude toward the industry and that of the early Flatt & Scruggs. The author of the piece traces the condition of the industry in relation to anemic sales of country music CDs and talks about Jobs’ idea of selling unprotected mp3s. He then goes on to talk about the soon to be released Flatt & Scruggs DVDs and the band’s attitude toward being on TV. At the end of the article he compares their attitude to that of Jobs.

Flatt & Scruggs never met Steve Jobs, obviously. But if they had met, they would have recognized themselves as brothers-in-arms. For they had a common goal: to dominate their market and leave a mark. And they both did so.

May you find yourself surrounded by those dearest to you, and know the love above all others as you share gifts and remembrances with family and friends.

A very Merry Christmas to you all from The Bluegrass Blog!

Major music publishers are continuing to pursue unauthorized music sites, including those offering tablature (mostly rock guitar tabs). The practice of sharing tabs online has existed for years, but publishers are now targeting destinations that are profiting from the use of copyrighted material. During a recent interview with National Public Radio (NPR), National Music Publishers Association (NMPA) attorney Jacqueline Charlesworth pointed to a campaign against,

sites that have hundred of guitars tabs, sheet music, often with lyrics, especially those running ads and making money off of other people’s copyrights.

One site that has been targeted by this campaign is Guitar Tab Universe, a massive destination that recently received warning letters from both the NMPA and Music Publishers’ Association (MPA). Owner Rob Balch complied with the requests, though he questioned the logic of the legal threats.

At what point does describing how one plays a song on guitar become an issue of copyright infringment? This website, among other things, helps users teach eachother how they play guitar parts for many different songs. This is the way music teachers have behaved since the first music was ever created. The difference here is that the information is shared by way of a new technology: the Internet.

Apparently, the NMPA/MPA believes that the Internet may be on the foul side of the legality line they would like to draw here. For me, I see no difference. It’s teachers educating students and covered as a ‘fair use’ of the tablature. The teachers here don’t even get paid nor do the students have to pay this website to access the lessons.

What he says is true, no money is changing hands between the people downloading the tabs. But a quick visit to his site reveals that he has sold advertising on the site. That is, he is making money off all the visitors to his site who are coming for the purpose of finding tablature to copyrighted songs. At least that’s the argument the publishers are pursuing.

I would suggest that it makes no difference whether he is “making money” or not off the site. If it is copyright infringement then it’s wrong, regardless of any income stream that may or may not exist. So the question really is, “What are the copyright laws regarding sheet music, lyrics, tablature, and fair use?” As far as I can tell, and I’m no lawyer, making a “copy” or reproduction of any “performable” portion of a piece of music is not considered fair use.

I do know this, John (AcuTab) has printed a number of books of tablature, and produced instructional DVDs of bluegrass artists teaching the solos they themselves played on a CD or recording. Most of the DVDs have contained somewhere between 7 and 15 songs and I know that John has always made a good faith effort to pursue and obtain licenses for each copyrighted song on those DVDs and in those books. And I might add that doing so has cost him a good bit of time and frustration, but it’s the right, and legal, thing to do.

We’ll open this thread to comments in case anyone wants to discuss the legal issues involved in the instance of websites sharing lyrics and tablature for copyrighted songs. Let’s hear from you…

John adds: Not only is researching (and paying!) copyright royalties to songwriters cumbersome, time-consuming and almost always incomplete, the explosion of growth in free tab sites has all but killed the market for the sort of authorized tab transcription books that AcuTab was created to publish. That, and the surge in the use of instructional DVDs, has created a market where we are not likely to ever publish another tab book companion to a bluegrass CD release. If bluegrass consumers prefer free tab sites online to authorized, artist-approved tab books (for which the artist is compensated), that’s what they will get.

Earl: “Hey, anyone heard of Meagan Lynch”?
Lester: “No, who is she”?
Earl: “She”s this incredible fiddle player with 3 Fox Drive. I”ve heard one of their shows on bluegrassbox and bought their disk. They are a great band!!”
Josh: “Alright then, I”ll definitely check her and the band out.”

The essence of the above dialogue has been a common theme for me throughout the past 4 years since my introduction to bluegrassbox.com. A website that”s an invaluable source for live bluegrass and acoustic music.

Meagan Lynch of 3 Fox Drive recently posted here on The Bluegrass Blog regarding live show taping and trading networks. While she did raise valid points regarding stealth taping of artists who”d prefer not to be taped, I question a few of her other premises.

Her first notion mentions the hardships of a musician”s life. The traveling, demanding schedules etc. are undeniably rigorous. As an individual who”s seen day to day life from both sides (albeit briefly) of the fence I feel little sympathy for her. Being a musician is a choice. A choice that comes with trade-offs. Some of those tradeoffs being the elements of a musician”s life that she mentioned. Every occupation features tradeoffs. It can be tough. Being a lawyer is tough. Collecting garbage is tough. Sitting in a cubical for 8-10 hours a day with fiddle tunes going through your head is tough. There are times where I would drive home an hour each way just to be able to pick for 15 minutes at lunch. Sure, I”d rather be playing music for a living, but paying my mortgage each month is a nice thing. For many years, I”ve chosen that tradeoff. Life is all about trade-offs. She enjoys the mental fulfillment of living in a musical realm. Her hard work and sacrifice have put her in the position to choose that lifestyle but every benefit has a cost.The trials of a life on the road in no way constitute a valid argument against recording (with permission) and trading (legally) live music.

Her next statement is arguable”

“So it”s fine if someone records the whole show, uploads it to a site for everyone to have, no cost. And what a bonus if the band plays a bunch of songs from the new album. Whew! That saves $15 bucks!”

Most live shows that I”ve listened to (that were worth listening to) have always served to benefit the artist. Either I sought out the show because I”d already owned the album and wanted to hear the material in a live setting (most likely reinforcing my support for them) or I”d never heard the artist and purchased their disc solely because I was exposed to them in a live setting. Over the past year, I”ve purchased 6 different projects solely based on a live recording from bluegrassbox.com.

There will be exceptions of course.

The same folks who constitute the exceptions are the ones who also pirate compact discs like there”s no tomorrow and have a general lack of respect for intellectual property rights.

The economic immorality (theft) of the taping community minority is the real issue, not the concept of taping/trading and its facilitators.

Additionally, I like the idea of allowing individuals to preview a band in a live setting. If the show is quality and the talent is entertaining, the superior audio quality of a studio recording should be enough to earn an album sale. In generally most fans of the bluegrass genre want to support artists that they value. It”s no secret that being an acoustic musician can be tough financially. I know many artists (as well as myself) would much prefer a customer be happy with their purchase of our music than for them to feel like they wasted 15 bucks. In my opinion, If letting them hear me live would increase the odds of making a sale and a happy customer, then I”m better off long term.

Now, I do wholeheartedly agree with Meagan that if she”s performing and she”d prefer not to be taped/traded then she has the absolute right to voice that wish and have it unquestionably granted.

Overall, I think taping/trading (done legally) is very positive for acoustic music. To slam the trade and the underlying infrastructure because some tapers acquire their music without permission is the equivalent of questioning the legitimacy of cable companies because some individuals steal cable.

Brad Harper