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January 12, 2008

See a trend here?

this chart - created by national geographic via Hear 2.0 puts the recent history and trends of recorded music mediums in context.

[Double-click to enlarge]

natgeo_musicsales2_6.gif

Spoiled by musical choice?

Why bands are being spoiled by musical choice: "Owen Adams of the Guardian says:

The widespread availability of once-rare tracks is homogenising artists' reservoirs of inspiration. Now the music is suffering"

(Via Guardian Unlimited: Owen Adams Archive.)

Ok - his point goes like this -

. . . when we didn't have every conceivable recording from every era and every genre available in some endless eat-what-you-can buffet, when we faced musical starvation and had to really hunt things down to satisfy our hunger, it spurred on much farther-reaching revelations.

That is why the last genuine innovations came at the dawn of rave in the late 80s, early 90s, and why from the dull thud of Britpop onwards, Alexis Petridis's well-named "consensus rock" has remained the proverbial colossus.

Sure, there is a galaxy of different configurations of what's gone before dressed up as innovation available at our fingertips. For instance, while before we would have tuned into the precious few John Peel hours on offer, now Dandelion Radio is continuing his legacy on a 24/7 basis.

We aren't merely spoiled for choice: the incessant gorging has catastrophic effects on artistic creativity.

There was an interview with bassist/electronica dude Tom Jenkison - aka Squarepusher going around a few months ago. In it he talked about the value he found in musical seclusion. Not listening to the latest, hippest sounds. He found it was the best way for him to arrive at his unique musical statement.

I can totally appreciate this.

On the one hand, being inspired by others is often what gets us into the game to begin with. But at a certain point - most of us need to let go of those influences and find our own way. There are several very accomplished artists whose music I enjoy - but simply stopped listening to so it won't influence me any more.

On the other hand, there's a great case to be made for how total musical "seclusion" can be a sure fire way to let the times leap frog you.

Almost quite naturally, I find that I go through phases of intense listening and seeking of inspiration in the works of others, followed by phases of not wanting to hear anything so that I can sit and hear what's happening in my head. I think I might be in that phase right now. ,-)

The shit storm continues

If you have the stomach - here's more about how major labels are screwed. This time from the Economist:

The music industry | From major to minor | Economist.com: "

And a few of my fav highlights from the article:

IN 2006 EMI, the world's fourth-biggest recorded-music company, invited some teenagers into its headquarters in London to talk to its top managers about their listening habits. At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. “That was the moment we realised the game was completely up,” says a person who was there.

Ok - so it took almost 10 years for labels to actually SEE people rejecting CDs. Fair enough - I guess.

So - the question we all have is - NOW WHAT?

From the article:


They (labels) now want to move beyond Apple's iTunes and its paid-for downloads. The direction of most of their recent digital deals, such as with Imeem, a social network that offers advertising-supported streamed music, is to offer music free at the point of delivery to consumers.

Perhaps the most important experiment of all is a deal Universal struck in December with Nokia, the biggest mobile-phone maker, to supply its music for new handsets that will go on sale later this year. These “Comes With Music” phones will allow customers to download all the music they want to their phones and PCs and keep it—even if they change handsets when their year's subscription ends. Instead of charging consumers directly, Universal will take a cut of the price of each phone. The other majors are expected to strike similar deals.

“‘Comes with Music' is a recognition that music has to be given away for free, or close to free, on the internet,” says Mr Mulligan.

Paid-for download services will continue and ad-supported music will become more widespread, but subsidised services where people do not pay directly for music will become by far the most popular, he says.

For the recorded-music industry this is a leap into the unknown. Universal and its fellow majors may never earn anything like as much from partnership with device-makers as they did from physical formats. Some among their number, indeed, may not survive.

In other words - people won't buy music - they'll buy things that have music in it.

January 10, 2008

Mystery & Creativity

Intrigued by shows like LOST, ALIAS & the movie CLOVERFIELD?

Peeps this TED Talk video (18 min) with creator of those shows J.J. Abrams on "Mystery"



Music Tax Anyone?

One of the comments made in the C-Net interview with Trent Reznor I posted about is the idea of a "Music Tax" on ISP's.

That set off a firestorm around the internet "blogosphere" (intended consequence perhaps?) with most people opposed to the idea. I join them in being against it. I might voluntarily subscribe to a service that gave me access to EVERY song and release - but not some arbitrary tax.

There isn't a clearer, more focused articulation of why a music tax is a bad idea than from Michael Arrington @ TechCrunch - so I re-print his words here.

_____________________________________________________

The Music Industry’s Last Stand Will Be A Music Tax: "

It is becoming more and more difficult for the music industry to ignore the basic economics of the their industry: unenforceable property rights (you can’t sue everyone) and zero marginal production costs (file sharing is ridiculously easy). All the big labels have now given up on DRM. They haven’t yet given up on trying to charge for their music, but it’s becoming more and more clear that as long as there is a free alternative (file sharing), the price of music will have to fall towards free.

You can disagree as to whether it’s ‘fair’ that the price of recorded music will be zero or near zero, but you can’t disagree that it’s going to happen. I presented my arguments here last October. Subsequently, we noted that even offering the new RadioHead album for free didn’t stop massive file sharing on BitTorrent. More recently, NIN’s Trent Reznor was disheartened to see that, when offered a choice between downloading a new album for free and paying $5 (and, thereby ‘feel good about supporting the artist directly’), only 18.3%, or less than 1 in 5, chose to pay the $5.

Personally, I think a new era of free recorded music and paid live performances is a very good thing. Recorded music will become a marketing tool to get people to pay for concerts and merchandise. Overall the music industry will be smaller in terms of revenue. But the artists who are driven to create their art will continue to do so, and many will make a very good living from it.

But before that happens, the music industry is going to make one last stand to preserve their ‘bloated bureaucracies.’ And that is going to be a call for a music tax to create guaranteed revenues.

Reznor called for it today, saying ‘I think if there was an ISP tax of some sort, we can say to the consumer, ‘All music is now available and able to be downloaded and put in your car and put in your iPod and put up your a- if you want and it’s $5 on your cable bill.’’

This isn’t the first time its popped up. Over a year ago, Peter Jenner (he was Pink Floyd’s first manager, as well as managing The Clash and other great artists) called for a mandatory monthly tax in the European Union on broadband Internet and mobile phones of around €4/month that allows consumers to download and consume all the music they want without DRM. I attacked his plan, and he responded here.

Mathew Ingram notes that similar efforts are being made in Canada. Last month the Songwriters Association of Canada called for a mandatory $5/month ISP music tax.

So far they’re just testing the water. The big push will come when the labels put lobbying dollars behind the effort, sometime in the next few years.

Music Taxes Will Kill Music Innovation

Forcing people to buy music whether they want to or not is not a solution to this problem. The incentives created by such a system are perverse - guaranteed revenue and guaranteed profits will remove any incentive to innovate and serve niche markets. It will be the death of music.

Music industry revenues will be a set size, regardless of the quality or type of music they release. Incentives to innovate will evaporate. There will only be competition for market share, with no attempt to build the size of market or serve less-popular niches. Forget labels building new brands and encouraging early artists to succeed - they’ll bleed existing big names for all they are worth and work hard to keep anything new - labels, artists, and songwriters - out of the market. New entrants just means more competition for a static amount of money. Collusion by existing players will run rampant.

Soon labels will complain that revenues aren’t high enough to sustain their businesses, and demand a higher tax. It will go up, but it will never go down.

As I said before, Asking the government to prop up a dying industry is always (always) a bad idea. In this case, it is a monumentally stupid, dangerous, and bad idea.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

"

(Via TechCrunch.)

Why won't people pay $5?

Trent Reznor (Nine Inch Nails) produced a great record last year with rapper/poet Saul Williams. It's smart, edgy and doesn't fit the current model of what "hip hop" is sounding like these days at all.

It's kind of a throw back to "old school" hip hop - it's pre "bling, bitches and bentlys".

Anyway - instead of putting the music out through a record label - Trent & Saul put it out for free online with an option to get the high quality digital version for $5.00

Last week Trent released the numbers (something radiohead has not yet done) here's how it broke out:

As of 1/2/08,

154,449 people chose to download Saul’s new record.

28,322 of those people chose to pay $5 for it,

meaning: 18.3% chose to pay.

Of those paying,

3220 chose 192kbps MP3

19,764 chose 320kbps MP3

5338 chose FLAC

Trent was somewhat disappointed. You can read his original blog about it HERE

Today - Trent does an interview on the whole matter with C-Net (don't know why he talks to them - whatever)

In the interview Trent basically said he might have given "the fans" too much credit - thinking the only reason people pirate music is because there's too many unnecessary obstacles to paying for it. That if given the fair and reasonable chance - fans would choose to support an artist.

With 18% of people choosing to pay - it appears NOT to be the case in this instance.

Here's the thing though.

Trent & Saul's project is really different. It's a fusion/mash up of Nine Inch Nails and Saul's unique brand of hip/hop poetry.

I'm not sure the average NIN fan or the average Saul Williams poetry or hip hop fan would really dig that kind of mash-up.

Perhaps Trent over-estimated the tolerance & interest of his & Saul's fans for music that travels outside the expectations of their own brands.

We've seen this happen with many other artists over the years who have traveled away from what made them "famous" to begin with. Sometimes to good results - most often not.

We all have artists we know & like - and when they do something that travels too out far from what we love them for - chances are we won't go along for the ride. That's just the way it is.

That forces me to wonder how different it would have been had Trent used this internet release method with a genuine Nine Inch Nails project.

I suspect the "support" figure of paid downloads would be way higher. But maybe even that is a pipe dream.

Anyway - here's the interview. Good read - the whole thing makes me think. I'm grateful for guys like Trent who try new things - take risks and then have the balls to talk openly about it.

Trent Reznor: Why won't people pay $5?: "In an exclusive interview, the Nine Inch Nails front man said his realization that fans think 'music should be looked at as free' was a bitter pill to gulp down."

(Via Jeff Schmidt's shared items in Google Reader.)

PS -For the record - I was one of the 18.3% that ponied up a measly 5 spot for a great recording.

beware of turning hobbies into jobs

This comes from one of my fav bloggy types - Hugh Macleod of gapingvoid.com

Admittedly the story is a bit contrived (at least to me) - but the princple message hugh is making is one I've been pretty level headed about for several years now.

At least I think i have. ,-)


-----------------------------------------------

beware of turning hobbies into jobs: "

hjsdert2777.jpg

[More thoughts on 'How To Be Creative':]

34. Beware of turning hobbies into jobs.

It sounds great, but there is a downside.

The late billionaire, James Goldsmith once quipped, 'When a man marries his mistress, he immediately creates a vacancy.'

What's true in philanderers, is also true in life.

When I was about nineteen I knew this guy called Andrew, who was a junior accountant, a few years out of college.

Andrew didn't really like being an accountant, at least, that's what he was fond of saying. His passion, of all things, was antique silverware. In particular, antique silver cutlery. In particular, antique silver teaspoons.

He knew A LOT about antique silver teaspoons. He collected them en masse. He lived and breathed them. OK, maybe that's a pretty strange hobby, but hey, he was pretty much a national authority on them.

To make a long story short, eventually he quit his accountancy gig and got a new job as at a very prestigious auction house, specializing in valuing silverware.

I remember buying him a drink and congratulating him. What happy news!

A few years later, I was hanging out at the same bar with some mutual acquaintances, and his name came up in conversation. This time the news wasn't so happy.

Apparently he had recently lost his job. Apparently he had gone into rehab for alcoholism.

What a bloody shame.

'That's why you should never turn your hobby into your job,' said one of my friends, someone far older and wiser than me. 'Before, this man had a job and a hobby. Now suddenly, he's just got the job, but no hobby anymore. But a man needs both, you see. And now what does this man, who's always had a hobby, do with his time?

My friend held up his glass.

'Answer: Drink.'

Make of that what you will.

"

(Via gapingvoid: "cartoons drawn on the back of business cards".)

January 08, 2008

My key take-away from Seth's article

I love sharing articles that make people think. I always enjoy seeing how different people read the same text and get completely different ideas and opinions from them. It's not about right & wrong - but it does prove to me that it's best to read things several times - particularly longer items.

It's easy to fix on 1 or 2 parts of a text and miss other ideas. Of course - what's important to 1 person is irrelevant to another - and that plays a role also.

After yesterday's post about the music biz I got a few e-mails, myspace messages and phone calls from peeps all with different takes and ideas about what Seth's article says and what it means.

Like all of you - I also have my own ideas about what the article says and means. Mind if I share?

For the indie artist (like me, and many of you) - there's 1 crucial point made in the article which simply cannot be ignored. It's the one point that's as old school as the music itself - but we seem to overlook or forget it in many of these discussions.

Many musicians have understood that all they need to make a (very good) living is to have 10,000 fans. 10,000 people who look forward to the next record, who are willing to trek out to the next concert. Add 7 fans a day and you're done in 5 years. Set for life. A life making music for your fans, not finding fans for your music.


That is the insulation - the innoculation - the insurance policy against whatever "distribution" methods rise and fall away.

Tapes, CDs, LPs, MP3s, P2P all come and go - what remains through it all is your fans. If they are true fans.

Obviously this part of the issue has NOTHING to do with free downloads and piracy and digital distribution and ubiquity and blah blah blah. Those are the discussions for techies trying to sell technology (not music) and for corporate interests trying to maintain control and huge profit margins in a universe changing too rapidly for them.

They are discussions that are important to musicians and artists, and we need to stay engaged and in touch with them.

But unless your bound up in bed with corporate interests - they are also a distraction if you don't have your 10,000 fans.

Here's the deal. CD's are dying. People aren't buying music anymore . . . . Who cares. You have 10,000 people who have given you permission to contact them DIRECTLY about how to download your new song - get a discount on your upcoming show and get the first listen to your new EP or have the chance to personalize something with your music etc....

It's about having fans. And rewarding them. Making them feel special - like they are a part of YOUR club - not just a generic consumer.

The reason people are having a problem figuring out what to do next in the music sales biz is because many of them are putting the cart before the horse. They're trying to sell music without fans. That's some hard shit to do.

If I were to take my music off the "hobby" shelf and "go pro" tomorrow - here's what I'd do. My number 1 goal would be to earn 10,000 fans.

How? Lots of ways - especially with the internet - but let's be honest - old school playing live constantly is the main engine.

Fist and foremost - I'd commit to spending at least a year giging my ass off. I mean non-stop, not home for weeks at a time gigging my ass off.

That means taking every possible gig and chance to play in front of audiences I could get.

I'd also leverage the wonderful medium of interconnectivity that is the internet. This will help multiply the efforts made on the road - but again - rubber hits the road by playing live. Period.

The calculus I see a lot of cats using for most gigs is "how much can I make on door + cd sales".

That's fine - but it's extremely short sighted if you don't already have your 10,000 fans.

Because the goal isn't just to make cash off the door and cd sales and then move on to the next show.

The goal is to earn 10,000 fans.

10,000 people who have met me - shaken my hand and said "YES" I will let you contact me IN THE FUTURE about your music and related activities. 10,000 people for whom I have first name - last name - town of occupancy and a valid e-mail address. 10,000 people who are highly likely to buy my stuff. That means putting on one hell of a show every single time. Old school.

Also - don't take the 10,000 figure too literally. Maybe you only need 5000 or maybe you need 20,000. The point remains - all efforts should be focused on getting a solid reliable fan club that you can communicate with directly. In fact - I'd say that if you don't have permission to contact someone - they're aren't part of your 10,000.

Realize you'll probably end up like every other organization where 80% of your revenue comes from just 20% of your fans. Use that as the calculus to determine what your magic number is.

I can't tell YOU how to do this.

But it's pretty obvious to me, that being without it is not really a business. It's a hobby.

So it has to be a goal - a focus and effort has to be put behind it rather than haphazardly HOPING it happens while your busy doing other things. It also helps if your music doesn't suck - but that's another conversation.

Again - I'm only a hobbyist - but I've done enough shows to have made some observations and formed some opinions.

There's one thing I often see other "pro" musicians NOT doing. Mingle with the "audience".

Back-stage is death. Sure you get to socialize with other musicians and drink & eat etc... but the "relationships" you really need to be making are in FRONT of the stage. Those are people who have ALREADY proven a willingness to PAY for music. Don't ignore them. Save the whole "back stage" vibe for when you have TOO MANY fans to meet personally. Even then - you should make an attempt to meet and connect with them.

EXAMPLE.

When I was invited to play a Victor Wooten's Bass Nature Camp over the summer - I wanted to give each of the 60 students a copy of my CD. No . . . not sell it - I'm in the BUILDING phase - so I wanted to give it away.

Now - I could have - like others - simply put a pile of my CDs on a table, announced they were free and then gone back to HANG out with Chuck Rainey, Victor Wooten & Steve Bailey as students grabbed a copy in the hall.

Instead - I took my CDs - piled them up on a table along the LUNCH line, sat on the edge of the table and personally handed my CD to each of the 60 students as they walked through the lunch line. I got a chance to meet each of them, say hello, share a few words and when requested - signed copies of the CD.

The potential for connection and long term relationships with people is worth far more than a single CD sale. Particularly moving forward. If people are less likely to buy recorded music - the connection you have with audiences needs to be deeper than a single $10.00 CD sale.

Of course - if you already have your 10,000 fans - you don't need to give your stuff away. Or do you?

Topic for another time.

January 07, 2008

Ok . . . Don't take my word for it [music biz & digital]

A few months ago I posted an lengthy item about file sharing and downloads.

In it I argued that the old command & control system of scarcity, labels & retail & physical media was falling apart, and there is no use in trying to build walls around it to prevent digital ubiquity. I suggested we needed to find a NEW business - since selling "copies" was obviously not a good long term strategy in a digital world where 1 copy turns into millions in an instant.

Today, Seth Godin - echos most of those same sentiments.

Seth Godin is one of those nu-marketing guys (in fact he may be THE nu-marketing guy)

nu-marketing is the idea that you can no longer get away with pasting remarkable marketing and slick advertising on mediocre products to create hits.

The world is far too interconnected now and people will spread the news of your mediocre over-hyped product far faster than they ever could.

Instead, Seth's mantra has been to create remarkable products that people will want to talk about. And about getting permission to develop a connection with those people. Once that trust is established people will sell your remarkable product for you and become your fan. This applies to a vast array of interest areas - one obviously being music.

Seth's views are totally of this time and because of that - he happens to have everyone's ear. When Seth says something - people listen and usually believe him. Seth's blog is updated an average of a post per day - usually pithy 2 sentence posts that re-enforce the larger ideas Seth promotes.

His post on music is unusal in that it's longer than typical.

It's optimistic and a must read for artists.

Click the link to Seth's blog - or keep reading - I've copied it.

Music lessons
by Seth Godin
Things you can learn from the music business (as it falls apart)

The first rule is so important, it’s rule 0:

0. The new thing is never as good as the old thing, at least right now.
Soon, the new thing will be better than the old thing will be. But if you wait until then, it’s going to be too late. Feel free to wax nostalgic about the old thing, but don’t fool yourself into believing it’s going to be here forever. It won’t.

1. Past performance is no guarantee of future success
Every single industry changes and, eventually, fades. Just because you made money doing something a certain way yesterday, there’s no reason to believe you’ll succeed at it tomorrow.

The music business had a spectacular run alongside the baby boomers. Starting with the Beatles and Dylan, they just kept minting money. The co-incidence of expanding purchasing power of teens along with the birth of rock, the invention of the transistor and changing social mores meant a long, long growth curve.

As a result, the music business built huge systems. They created top-heavy organizations, dedicated superstores, a loss-leader touring industry, extraordinarily high profit margins, MTV and more. It was a well-greased system, but the key question: why did it deserve to last forever?

It didn’t. Yours doesn’t either.

2. Copy protection in a digital age is a pipe dream
If the product you make becomes digital, expect that the product you make will be copied.

There’s a paradox in the music business that is mirrored in many industries: you want ubiquity, not obscurity, yet digital distribution devalues your core product.

Remember, the music business is the one that got in trouble for bribing disk jockeys to play their music on the radio. They are the ones that spent million to make (free) videos for MTV. And yet once the transmission became digital, they understood that there’s not a lot of reason to buy a digital version (via a cumbersome expensive process) when the digital version is free (and easier).

Most items of value derive that value from scarcity. Digital changes that, and you can derive value from ubiquity now.

The solution isn’t to somehow try to become obscure, to get your song off the (digital) radio. The solution is to change your business.

You used to sell plastic and vinyl. Now, you can sell interactivity and souvenirs.

3. Interactivity can’t be copied
Products that are digital and also include interaction thrive on centralization and do better and better as the market grows in size (consider Facebook or Basecamp).

Music is social. Music is current and everchanging. And most of all, music requires musicians. The winners in the music business of tomorrow are individuals and organizations that create communities, connect people, spread ideas and act as the hub of the wheel... indispensable and well-compensated.

4. Permission is the asset of the future
For generations, businesses had no idea who their end users were. No ability to reach through the record store and figure out who was buying that Rolling Stones album, no way to know who bought this book or that vase.

Today, of course, permission is an asset to be earned. The ability (not the right, but the privilege) of delivering anticipated, personal and relevant messages to people who want to get them. For ten years, the music business has been steadfastly avoiding this opportunity.

It’s interesting though, because many musicians have NOT been avoiding it. Many musicians have understood that all they need to make a (very good) living is to have 10,000 fans. 10,000 people who look forward to the next record, who are willing to trek out to the next concert. Add 7 fans a day and you’re done in 5 years. Set for life. A life making music for your fans, not finding fans for your music.

The opportunity of digital distribution is this:

When you can distribute something digitally, for free, it will spread (if it’s good). If it spreads, you can use it as a vehicle to allow people to come back to you and register, to sign up, to give you permission to interact and to keep them in the loop.

Many authors (I’m on that list) have managed to build an entire career around this idea. So have management consultants and yes, insurance salespeople. Not by viewing the spread of digital artifacts as an inconvenient tactic, but as the core of their new businesses.

5. A frightened consumer is not a happy consumer.
I shouldn’t have to say this, but here goes: suing people is like going to war. If you’re going to go to war with tens of thousands of your customers every year, don’t be surprised if they start treating you like the enemy.

6. This is a big one: The best time to change your business model is while you still have momentum.
It’s not so easy for an unknown artist to start from scratch and build a career self-publishing. Not so easy for her to find fans, one at a time, and build an audience. Very, very easy for a record label or a top artist to do so. So, the time to jump was yesterday. Too late. Okay, how about today?

The sooner you do it, the more assets and momentum you have to put to work.

7. Remember the Bob Dylan rule: it’s not just a record, it’s a movement.
Bob and his handlers have a long track record of finding movements. Anti-war movements, sure, but also rock movies, the Grateful Dead, SACDs, Christian rock and Apple fanboys. What Bob has done (and I think he’s done it sincerely, not as a calculated maneuver) is seek out groups that want to be connected and he works to become the connecting the point.

By being open to choices of format, to points of view, to moments in time, Bob Dylan never said, “I make vinyl records that cost money to listen to.” He understands at some level that music is often the soundtrack for something else.

I think the same thing can be true for chefs and churches and charities and politicians and makers of medical devices. People pay a premium for a story, every time.

8. Don’t panic when the new business model isn’t as ‘clean’ as the old one
It’s not easy to give up the idea of manufacturing CDs with a 90% gross margin and switching to a blended model of concerts and souvenirs, of communities and greeting cards and special events and what feels like gimmicks. I know.

Get over it. It’s the only option if you want to stay in this business. You’re just not going to sell a lot of CDs in five years, are you?

If there’s a business here, first few in will find it, the rest lose everything.

9. Read the writing on the wall.
Hey, guys, I’m not in the music business and even I’ve been writing about this for years. I even started a record label five years ago to make the point. Industries don’t die by surprise. It’s not like you didn’t know it was coming. It's not like you didn't know who to call (or hire).

This isn’t about having a great idea (it almost never is). The great ideas are out there, for free, on your neighborhood blog. Nope, this is about taking initiative and making things happen.

The last person to leave the current record business won’t be the smartest and he won’t be the most successful, either. Getting out first and staking out the new territory almost always pays off.

10. Don’t abandon the Long Tail
Everyone in the hit business thinks they understand the secret: just make hits. After all, if you do the math, it shows that if you just made hits, you’d be in fat city.

Of course, the harder you try to just make hits, the less likely you are to make any hits at all. Movies, records, books... the blockbusters always seem to be surprises. Surprise hit cookbooks, even.

Instead, in an age when it’s cheaper than ever to design something, to make something, to bring something to market, the smart strategy is to have a dumb strategy. Keep your costs low and go with your instincts, even when everyone says you’re wrong. Do a great job, not a perfect one. Bring things to market, the right market, and let them find their audience.

Stick to the knitting has never been more wrong. Instead, find products your customers want. Don’t underestimate them. They’re more catholic in their tastes than you give them credit for.

11. Understand the power of digital
Try to imagine something like this happening ten years ago: An eleven-year-old kid wakes up on a Saturday morning, gets his allowance, then, standing in his pajamas, buys a Bon Jovi song for a buck.

Compare this to hassling for a ride, driving to the mall, finding the album in question, finding the $14 to pay for it and then driving home.

You may believe that your business doesn’t lend itself to digital transactions. Many do. If you’ve got a business that doesn’t thrive on digital, it might not grow as fast as you like... Maybe you need to find a business that does thrive on digital.

12. Celebrity is underrated
The music business has always created celebrities. And each celebrity has profited for decades from that fame. Frank Sinatra is dead and he's still profiting. Elvis is still alive and he's certainly still profiting.

The music business has done a poor job of leveraging that celebrity and catching the value it creates. Many businesses now have the power to create their own micro-celebrities. These individuals capture attention and generate trust, two critical elements in growing profits.

13. Value is created when you go from many to few, and vice versa
The music business has thousands of labels and tens of thousands of copyright holders. It's a mess.

And there's just one iTunes music store. Consolidation pays.

At the same time, there are other industries where there are just a few major players and the way to profit is to create splinters and niches.

13. Whenever possible, sell subscriptions
Few businesses can successfully sell subscriptions (magazines being the very best example), but when you can, the whole world changes. HBO, for example, is able to spend its money making shows for its viewers rather than working to find viewers for every show.

The biggest opportunity for the music business is to combine permission with subscription. The possibilities are endless. And I know it's hard to believe, but the good old days are yet to happen