SF MusicTech Summit Tries to Save Music Industry One Panel at a Time

Last month the Kabuki Hotel in Japantown played host to the 10th  annual SF MusicTech Summit. Founded by entrepreneur Brian Zisk, the summit defines itself as the “world’s leading business-to-business idea marketplace on the confluence of Internet, technology and music,”  where thought leaders in music and technology gather to share ideas.

Here are our roving reporter’s three favorite panels.

Future of Music Coalition
The big question this panel was trying to answer: “Is technology really, really helping musicians make money?” Kristin Thomson, education director at national nonprofit  Future of Music Coalition (FMC) presented findings from a study conducted by the organization to investigate the real effect of technology on musicians’ bank accounts.

Over the past 18 months, FMC has collected information from a diverse set of US-based musicians and composers about the ways that they are currently generating income from their recordings, compositions or performances, and whether or how this has changed over the past ten years. The project has employed three methodologies: in-depth interviews with more than 25 different types of musicians (from jazz performers, to classical players, TV and film composers, Nashville songwriters, rockers and hip hop artists); financial snapshots that show individual artists’ revenue pies in any given year; and a wide-ranging online survey in fall 2011 that captured information from a diverse array of US-based musicians and composers.

So…is Spotify a musician’s savior or nightmare?

As is often the case, the answer wasn’t a simple yes or no. It’s a resounding, “Maybe.” The majority-54% of the 5,000 respondents-said they had not generated income from interactive streaming services: Rhapsody, Spotify, MOG, Rdio, Slacker and so on. Yet overall,  the majority said that emerging technology has had a positive impact on musicians’ careers and revenue streams by allowing musicians to more effectively communicate with fans, manage their careers, promote and collaborate with other musicians.

Interestingly enough, the study found that musicians who engage with technology are in fact making less money than those who choose to stay out of the technology playing field. That is, musicians who aren’t trying to directly interact with their fans through the internet, such as section players in orchestras are making more money than musicians selling their music digitally. SF Weekly put it best, “So perhaps, if you want to make a decent living as a musician, consider shelving your Bob Dylan vinyl and resuming your Chopin studies.” 

“Meet the New Boss, Worse than the Old Boss” 
David Lowery, guitarist, vocalist and songwriter for the bands Cracker and Camper van Beethoven gave an interesting (albeit poorly attended) talk about the current state of music. While much of the day’s discussion had been a congratulatory pat-on-the-back talk about how the current business model is good for music and musicians, Lowery took a contrarian view that digital music is destroying artists. While much of his evidence was anecdotal (largely based on his own experiences as a musician in both the old and new models), he made a couple interesting points. Under the “old”  label model, musicians made 20-25% of sales, while assuming little or none of the costs and risks. However, under the “new”  digital model, while a musician now expects to receive about 65% when selling a recording through iTunes, Amazon and the like, they are now responsible for 100% of the cost and, as such, the associated risk with the recording. They have to put up their own capital for all recording, mixing, mastering, studio musicians, promotion and marketing costs, which means shouldering all the associated risk. Additionally, he noted that artists are now expected to also pay the costs of touring and live performances. All of this  makes the net monetary gain for the musician less than under the new digital model despite getting a larger cut of the sales.

According to Lowery:

“[iTunes and Amazon] put up zero capital and zero risk and they get 30% of the gross in return. At least the old record label system shared some of the risk! Wow the old labels were not so evil compared to the new labels. So essentially THE NEW BOSS in the new model is iTunes and Amazon (also indirectly Google). And THE NEW BOSS is actually more greedy than the old boss.”

Following this, Lowery joined a panel discussion with BMI, SoundExchange, TuneCore and others that turned fiery over the heated issue of just how artists get paid.

The Licensing Landscape
Lowery’s “old boss, new boss”  prelude on how musicians today are worse off  than their predecessors was roundly rebutted on this panel by Jeff Price, president of digital music distribution service TuneCore. Price noted that the vast majority of music is now created, recorded, distributed and enjoyed outside the major label scheme (TuneCore alone distributed a million newly recorded tracks in 2011, versus 4,000 newly recorded tracks by all major labels combined). That said, the panel became very heated when Price took an ax to the existing music licensing practices for the sometimes up to two-and-half year waits that artists have to tolerate in order to get paid by labels like BMI or ASCAP.

“How fucking hard is it to give them their money?  We should be in favor of anything that makes it easier, quicker and more transparent for artists to get paid.”

BMI’s Michael Drexler took exception to Price’s vocal arguments, which set off a heated debate around the inefficiency of the traditional collection societies (ASCAP, BMI, SESAC, et al) in collecting royalties from digital media. Price’s voice seemed to be the dominant one in this panel, and his message was primarily about how companies like Tunecore allow artists to make more off their properties by being full-service distributors directly collecting digital royalties. To counter this, Drexler said BMI wants to move from quarterly to monthly accounting to hasten payments to rightsholders.

Clearly the internet and the digitalization of the music industry has changed-and by changed I mean democratized-the landscape significantly, and given more musicians access to fans. But in that same vein, the “new boss,” the internet, has thrown a tough  curve ball  to working musicians by making it far harder to live off a career in music. While the panels were informative in their own way, the summit did little to answer the question on all musicians’ minds, “How can musicians make money in the new business model?”  It looks like we’ll need more than a tech summit to solve this conundrum.

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Alan Williams  also contributed to this article. Alan is a trombonist, composer and arranger  based in San Francisco.