Niche Marketing for the Future

“Outside any cycles of hype and stock market ups and downs, the scope and acceleration power of the personal computer when combined with the Internet make it advance for exchanging information unlike any other.  Is it any surprise that a development of that magnitude might have repercussions for businesses?  If the entertainment industry is not able to deal with the ubiquity and free flow of information in the information age then it will suffer” -John Alderman,  Sonic Boom: Napster, MP3 and the New Pioneers of Music25

A trend among independent bands in the 21st century and the use of new media technologies has been the emphasis of giving out music online for free in order to attract fans and generate income and a fan base in the long term.26

In 1995, Rob Glazer, former Microsoft vice president unveiled RealAudio, an online music program that allowed for even dial up Internet users to obtain music quickly, from an unlimited number of sources around the world.  The sound quality was streaming, noisy, granular and highly compressed, however this was the first technology that truly opened doors to the possibilities of online music file sharing.27

To Glazer, the business structure of the major labels was incredibly short sided and as he described it, these labels had the physical CD pressing plants, so why would they want anyone else in the distribution business even it were to improve their business?  Naturally the sound quality improved over time, and other online music businesses followed including MP3.com for example, and also the notorious Napster.28

While Napster sparked piracy issues and lawsuits because of its file “sharing” nature, these were the first Internet technologies that set the platform for music distribution today.  As the major labels fail to prosper from the file sharing and online music stores as a collective whole, they also work to enact short sided lawsuits and legislative policies that limit such technologies.  However, it is now evident more than a decade after RealAudio’s launch, that online music sharing and purchasing is finding its niche, and the artists benefiting from these technologies are those pushing the boundaries to make innovative records and create followings that understand the art.29

Barefoot Truth before playing a packed house at Higher Ground in South Burlington on February 7, 2008. Barefoot Truth is able to tour the nation by keeping its music online and available to fans nationally, and even worldwide. Photo by Jon Stewart

Barefoot Truth is a completely independent rock band with roots in Burlington, Vt. and Amherst, Mass. Barefoot Truth resembles a sound similar to Dispatch or Jack Johnson, and the group catches the appeal of a college radio circuit.  Without the support of a major or an indie label, the group has released its sophomore album Walk Softly online for free through Facebook.  So why would releasing an album online be beneficial to a band?  More importantly, why would it be beneficial to a band without a label, or the ability to sell out large venues each night?

The answer lies within the new business model forming around such independent groups and the use of new media technologies for long term success.  To Barefoot Truth, its live show is what defines its sound and it is what the group says it is known for30.  It is easy with new media technologies today to record an album, even from a home studio, build a Web site, distribute records and merchandise and promote music online.  According to Barefoot Truth, this kind of media makes a group look bigger than it actually is quite often.  Nevertheless, for Barefoot Truth there is no emphasizing or exaggeration in its live sounds.  While the group feels the there are benefits to these new media technologies to build an artist’s career, they can also be a way of diluting the industry because all artists can look this big.31

However, the most important facet of promoting a band and selling records, even after giving it away for free to Barefoot Truth is the live show.  Barefoot Truth is beginning to build an allegiance of fans through its live show which to the group is crucial toward building a career.  Giving away music for free to Barefoot Truth is a powerful tool to reach fans and fill rock clubs around the country.

While indie artists are able to use the Internet to promote and distribute music to the masses, there lies an important facet in music business for the future.  The major record labels of today follow a utilitarian approach creating music.  Unfortunately, the greatest good for the greatest number of fans does not seem to be working judging by the decline in concert tickets and physical record sales most specific to 2007.  Indie artists on the other hand recognize their financial disadvantages, and their music advantages.  Therefore, using the Internet to promote and build a fan base is proving to be a valuable resource to create a platform for such innovative and edgy music that the fans will believe in.

“Some of the best new music these days is coming from the independent sector.  If it is heard by programmers and can be promoted to them, then it has a better chance at getting radio support than not. But independent labels need to understand that just because the doors are opening again, that is no guarantee they’ll get the support they seek. For every act that makes it at radio, there are 100 that don’t.”32 -Sean Coakley, President of Triple-A promotion and marketing company Songlines

Barefoot Truth in five years sees itself looking to grow like a “small business,” according to lead singer and drummer Will Benoit.  The group is looking to invest its own money into promoting themselves and also look into a grass roots type of management/label.  The group is looking to be like Jack Johnson with his label Brushfire Fairytales.  This is because he was able to sell 100,000 records on his own before signing to Universal.  However, Jack Johnson signed with Universal under the circumstances where his career, sound and image was already built. The major label wanted to give him a better distribution deal without changing his creative persona33.  Barefoot Truth is looking to pursue this same type of business path in the future.

O.A.R. is a classic example of this type of business model for independent groups as well.  Signed to Everfine Records, an independent label founded in 2001, O.A.R. began its career in 1996, and by October of 2005, the group sold a total of 1.2 million records.Will Benoit, lead singer and drummer for Barefoot Truth believes a good touring band and a good studio band will draw the numbers and eventually a good distribution deal without sacrificing the music. Photo by jon Stewart By 2006, O.A.R. was filling arenas around the nation including a show at Madison Square Garden in January of 2006 with an attendance of close to 18,000 fans and has featured music videos on MTV34.  The group attributes its success to online file sharing of its music.  Through the free transfer of its music online, O.A.R. has been able to tour North America since its formation and build an allegiance of fans which now culminates in large arenas and theaters across the nation.

An ethical issue arises here from the example of  O.A.R.’s success through online file sharing.  Specifically, if  it were not for programs such as Napster, where millions upon millions of songs were downloaded illegally, would the group have sold 1.2 million records?  Would they have had the opportunity to tour the world and reach millions of fans that otherwise would have been left in the dark?  The answer lies within the ethical and political realms attached to the posed questions.  It is most likely that artists such as O.A.R. would never see the light of day had it not been for online promotion.  Nevertheless, what about the millions of dollars lost to the major record labels who already have established artists with thriving careers, that are now losing out because their music is being stolen or “shared  between millions of friends around the world” if you will?

Perhaps a brief digression will help clarify the answer to this point.  Take Jon Reid, also known as jar-e.   Reid is a multi-instrumental solo artist based in Ashville, North Carolina.  With a base of rock, jazz and blues, Reid is bilingual and traveled the world teaching English.  According to DiMenna Saunders who manages Reid, his most recent release War Songs and the Muse ties jazz, rock, Latin and hip-hop.35  It was produced with innovative techniques such as creating soundscapes to use household materials including pots and pans and even mattress springs create rhythms and harmonies for the record.  Tying in so many genres seems like a good way to market to the masses, because the record may have a little something for everyone to enjoy.  However, Reid is signed to an independent record label based in Connecticut and while War Songs and the Muse is getting great reviews from online
music providers and online/satellite radio it is not seeing the light of day for mainstream listeners.

Now go back to the ethical and political issues associated with online file sharing to build an artist’s career.  It seems as though using the Internet resources to build a career and mobilize loyal fans makes sense in a modern and technologically advanced world.  Otherwise, how will jar-e get his break and make his way into the stereo speakers of the masses?  At the end of the day it comes down to the issue of the major labels and their fears of losing business because of these technologies.

The industry is consolidating and while there was once a dozen labels controlling mainstream music, there are now four and there may be even less one day.  The labels get larger and broader and the genres they push get smaller.  Where multi-genre musicians like jar-e and jam bands like O.A.R. fit on a mainstream top 40 radio station is not the issue.  The issue is how the major labels will adapt to their own trends and business limitations because of the Internet.  Either the major labels need to decentralize reminiscent of the glory days of EMI and British Invasion of the 1960s for example, or independent music is on the forefront of a musical revolution.

“The music business is in dire-straits because they spent so long with a business model that has been outdated and they sort stripped the talent, and served as a greedy way to live.  It’s sort of like the dinosaurs seeing the comet coming and continuing to eat and graze and not figure out how to get out of the way.  They’re going to have to fix themselves by cutting back and stop overexposing acts. It’s going to have to turn into a much smaller situation.”36  -Matt Nathanson, Singer/Songwriter

O.A.R. used file sharing and non-stop touring around the nation to promote its music. O.A.R. now sells out large arenas in the U.S. including Madison Square Garden and remains on an independent label (Everfine). Public Domain Image

On January 9, 2008, independent singer/songwriter Matt Nathanson, who is signed to indie label Vanguard records, appeared on the Fox Business Network to talk about the current state of the music industry.  Nathanson has seen success of his music on top 40 radio and also through motion picture soundtracks.  While Nathanson has experienced mainstream success, he remains signed to an independent label and has experienced the negative and positive impact of both the mainstream and indie sides of music.

On the Fox Network Nathanson alluded to stadium concerts being a way of the past because of media decentralization and the Internet, as the television screen pans from mainstream recording artists such as Justin Timberlake with headlines reading “North American Concert Dollars fell 10.2% to 2.6B in 2007.” While sales are overall generating billions of dollars, to Nathanson the decline is inevitable.  Fans are spending their money elsewhere as opposed to large stadium concerts and for Nathanson, his revenue has been generated by loyalty between the fans and the music, while major labels throw money at the artists, and steer away from the disconnection between the fans and the artists.  By keeping record and concert prices low, as well as touring from city to city and connecting with the fans one-on-one, Nathanson says his “music business” is prospering.

“The music industry has to work WITH technology from here on out, if they want to survive. For so long it’s been and still is to some extent, the music industry vs. technology. That kind of fear based business model is what got the industry in trouble in the first place. These are what we, as artists, can aspire to be. They are realistic bands to try to emulate. Bands that can tour because of their loyal fan base. They keep ticket prices low and they use technology to their advantage. These are the bands we are going to see in the future.  Bands that don’t get to the same heights… but are able to constantly tour and make money and grow. Because they build organically and constantly evolve and challenge their audience. Bands like Radiohead, Wilco, Pearl jam, My Morning Jacket. These are what we, as artists, can aspire to be. They are realistic bands to try to emulate. Bands that can tour because of their loyal fan base.  They keep ticket prices low. And they use technology to their advantage. These are the bands we are going to see in the future bands that don’t get to scale the same heights… but are able to constantly tour and make money and grow because they build organically and constantly evolve. and challenge their audience. ”37 -Matt Nathanson, Singer/Songwriter

So here stands the music industry in 2008; a battle between technology and a corporate business model.  But how does this battle determine the fate of music reaching the masses.  It seems as though the business model that has worked for the major labels for decades is no longer a consistent and reliable formula.  As the labels continue to conglomerate, limit staff, and take fewer risks on talent, the fans respond in a way the industry did not foresee.  The fact of the matter is album prices and concert tickets are high and the fans will look to technological mediums including iTunes and Myspace to find new music cheaply, and also free.  The Internet has proven to be an epic resource for the independent labels and artists alike, which do not have to corporate funding to move physical sales and promotion to the streets.

The major labels have not responded to this in a positive light.  The reality of the situation is that the industry is changing. Chris Michetti shreds a guitar solo at Higher Ground on February 8, 2008. Michetti considers the group a success by reaching fans across the nation from touring. Photo by Jon Stewart As the labels conglomerate, so do the genres and the prices tend to increase.  Warner Bros. Pictures’ 1995 motion picture release of Empire Records was about a suburban record shop fighting against its own financial limitations to avoid being bought out by a corporate franchise that jacked up prices of records.  While the film may or may have not been foreshadowing the corporate music consolidation of today,
hindsight is 20:20.  This fictional film symbolizes the beginning of the end of decentralized, diverse musical genres and consumer options.  However, today the indie artists and labels are finding ways to fight back.Solo artist Brian Grosz experiments with house- hold pots and pans to create create drum beats for his 2007 release Bedlam Nights.

The artists are taking to the Internet to move their music, generate fans and go on tour.  The connection to artist has with its fans is crucial in 2008.  The creation of niche markets and taking a tour around the nation to this allegiance of diehard fans within the smaller clubs and the smaller demographics may be the answer.

Most importantly, these major labels have lost sight of perhaps the most important principle in music, which is that it takes time for an artist’s career to take off.  If EMI hadn’t taken a chance on the Beatles in 1957, where would music be today?  What would it sound like?  The simple fact of the matter exists where major labels must develop artists instead of throwing money at a tough situation.  Fast, flashy and marketable figure heads are not going to fix the numbers, and they are not going to change the trends. The truth of the matter is the Internet.  It has proven to be an incredibly powerful tool for artists to build a career.  Plus, the indie labels representing many of these artists understand what it takes to build a career.  The management to artist relationship, creating new and innovative music and a great live show; these are the things that matter.  It seems very difficult to imagine a world without record labels and larger-than-life rock stars. But unless the labels remember what it takes to build an artist and an innovative sound that is going to change the world, these rock stars will emerge from home recording studios and rock clubs across the world.  We are at a pivotal time in music history in regards to where the industry will take it, but the technology is only growing and making indie artists more and more level with the mainstream ones.