I realized that no-one in the Music Business knows what they're doing: Part 2
Almost five years ago, I shook the music industry with an interview about how messed up the music business is. Since then, things have only gotten worse for artists. Here’s why…
Before you go on, I wanted to let you know that this article is quite long.
It's long because what I've written here for you is very significant.
It's especially significant if you care deeply about music and the amazing artists who create it.
As you read ahead, you'll learn about:
The big machine and how it doesn't care about artists.
How the so-called brand new music industry is making things much worse, not better.
How I've personally set myself a mission that I truly believe will make the world a better place for all of us.
It's been a little over fourteen years since I entered the music industry.
My goal was to find a way to connect with people across the globe towards making a positive impact on their lives and it was my belief that I could do this through the medium of music.
The logic behind my idea was simple: music is an integral part of humanity, so much so that it ranks right up there with our other essential requirements such as food, water and love—it's something we revere deeply.
No matter the age or background, music resonates in people universally.
Making a positive wave in the music industry, would mean making a positive wave in the world itself.
As I write this, my first post on this platform, my conviction in this concept is stronger than it's ever been.
Although the path to success won't be easy, I've devoted years of experience in this domain to both comprehend how it functions and construct a more effective way.
I demonstrated this more effective way when I took UK alt rock band The Hunna, from being unknown with zero fans, to becoming one of the fastest growing artists when they played to 10,000 people in London, a little over two years from starting.
The opportunity within the music industry today is one that looks very different, than many believed to be the case fourteen years ago.
The music streaming revolution has led to unprecedented growth - previously there had been year-on-year decline since the emergence of the internet in the late 90s and prevalence of platforms like Napster and the Pirate Bay in the early 2000s.
This incredible growth, coupled with the projections by most all financial forecasts such as Goldman Sachs (projecting the music business will more than double in size by 2030) that the golden era of recorded music is firmly ahead of us, has lead me to a belief that my now clearly defined mission, is not only possible, but the demand for it is immense.
I say this, not from a place of just believing it so, but due to the fact that I have personally undertaken over five thousand 1-1 one video calls with artists and people who work with artists over the past three to four years.
I did this crazy number of video calls as a way to create connections at scale - with the people who really matter in this game - and to assess the overall feeling that artists have of the existing music industry directly, how they'd receive the big vision I have and as a way to truly understand their needs.
My intention is to surface level highlight just how screwed up I think the music industry is and over the coming days and weeks, I'll be doing deeper dives into some of the grievances I have.
For those of you who do not know me and for those of you who do, I've been here before.
In March 2018, I did a now infamous interview with the biggest B2B publication in the industry, Music Business Worldwide - aptly titled, as this same article is: 'I realized that nobody in the music business knows what they are doing!'
This headline was so compelling it caused the article to go viral, hence, my decision to reuse it again now as a way to tell people who read it, that I'm well and truly ready to kick on and to those of you who are just discovering, to feel compelled that you need to read on and share.
This interview caused such a stir, that it triggered a chain of events that ultimately led to the 'powers that be', attempt to take me out and in the process destroy the 'better way' that threatens their very existence.
If you don't know much about the music business, you might still have heard some horror stories spoken by artists such as Prince and his fight with Warner Bros. Records for a fairer and more equitable deal, or how TLC famously sold fourteen million albums in one year making their label 100s of $millions in the process and TLC themselves: absolutely nothing.
These are the brave artists who dared to speak out - there are many more who never have and likely never will, because the unfortunate truth is that there is no viable alternative.
The current situation is this: if you want to make a global impact as an artist, you have no choice but to plug-in to the machine and hope you survive.
When I first entered the music industry, little did I know that it was full of unethical players: record labels, artist managers, lawyers, agents, business managers and promoters (and others!).
Unethical because the creators themselves, the artists, are the lowest on the chain of priority when it comes to being remunerated.
Further, it was an industry that was fragmented, disjointed and utter chaos by design.
By design, as a mechanism for power, control and exploitation at every level imaginable.
The focus was on vanity metrics, with little regard for people themselves.
There was a sole desire for fast-paced success, with the word 'patience' not one you'd associate with the music business.
As I studied the deep dark depths of the machine, I realized that it doesn't want to change and as such it will do everything possible to avoid it.
In the days of year-on-year recorded music business decline, the machine refused to change the fundamentals of the model, and instead the infamous 360 deal was created.
In principle, being 360 makes a lot of sense—executed properly it would result in massive efficiency gains, a fragmented music business becoming a joined up one and in turn bringing about incremental gains that benefits everyone.
Unfortunately, this is not what 360 meant to the machine - it was simply: we're making less, so we're going to make up for that by taking more from the artist, without adding any additional value whatsoever.
The most alarming thing to me was that as time went by and I met more and more people, it seemed like no-one in the industry actually knew what they were doing.
It felt more like everyone was just following someone else's lead and worse, they were petrified of making a mistake or putting forward ideas that could make a big and positive difference.
These are of course generalized comments, but, even when it was clear that people were brilliant at what they did, they were stifled by the system itself.
The culture was one of fear and one where the safest game was to do nothing, say nothing and quietly attach to the wins and do everything possible to disassociate with the losses.
Losses where the blame game will inevitably see heads rolling.
Oh yes... losses.
The big machine doesn't care about losses.
For the big machine, it really doesn't matter, because the music business is set up to ensure that wins are so big, they make up for all of the losses.
The artists who win, pay for all of those who do not - only the artist who wins, very rarely wins big.
As with many of the things I'm talking about here, one paragraph can be expanded to become an entire book, but you get the idea.
What I discovered was horrifying and quite frankly I wanted nothing to do with it.
This is a brief summary of fourteen years of being in and around the music business, building independently, being in bed with indies directly and with the major labels.
I’ve been using the word ‘was’ lots here, but the reality is that it is the same now as it was back then.
On this journey, as I said previously, I developed a better way and proved it to work beyond any doubt. Even so - the 'powers that be' tried hard to take me out.
It didn't work.
Instead, I wrote a book titled 'Zero to Record Breaker: How a Baker Built the Fastest Growing Alternative Rock Band in UK History', which to date has sold over thirty thousand copies globally and has been read by hundreds of thousands of people.
I refrained from mentioning until now, in my previous life, I was a baker, and as you might have noticed I've called this platform 'The Baker Says'.
The Baker is the nickname given to me from Lyor Cohen, one of the most successful modern day music business executives and currently the global head of YouTube Music.
Here's what he said in my Music Business Worldwide interview:
I've included this quote from Lyor, purely to highlight that there was real momentum behind The Hunna and the work I was doing in my music company High Time, only for it to all come crashing down just a few months after my infamous interview.
I have no doubt whatsoever that had we continued our work together, the band would have been playing in arenas on a global scale, instead 10,000 people in London has turned to 1,000, and 12,000+ week 1 sales of new albums in the UK has turned into just 100s.
At every level, the numbers are now drastically down.
A situation sold to the band as the grass being greener on the other side, led to them making a decision that would ultimately cause the band more damage than it would for me.
The powers that be did all they could to discredit me, even commissioning an unknown blogger to write untruths and allegations that were so false, that those involved redacted their names to avoid being sued.
I must add, it provides me with no pleasure to see the band's demise.
I worked with them for two years in development and tirelessly fought to break them first in the UK, and beyond for three years straight, investing my own money and taking on personal debt in the process.
So here we are today, with the music business still fundamentally broken and even more short sighted than ever.
The big machine is making more money than ever due to the fact that they own the history of music.
Why should they go all out to invest in amazing new talent and create cultural diversity by backing artists that are 'risky', when they can just promote everything they already own?
It's a subject for another article, but this is short-sighted on so many levels, but one big one is that the history of music has an expiration date.
That's to say that many of the copyrights that the big machine owns are coming to a place where they'll expire, at which point it's a free for all and the money printing they're currently enjoying will slow down.
They do have a get out of jail card, in that, for the most part, any new music company that moves and shows reasonable growth, finds it hard to resist the big check being waved in front of them - as was the case recently when SONY acquired AWAL (originally Artists Without A Label and very much anti the big machine).
In most instances, it's not even a question of being able to say ‘no’, because the majority of the time these new music companies already sold their souls to the devil in the form of accepting Venture Capital (VC) funding (e.g. AWAL!).
Such a move means the inevitable year 5, 6 or 7 exit is coming and the only benefactor who can afford such a transaction is the big machine.
Before I move on to talk more about my mission and even more importantly how I plan to make it happen, let me finish up this section with a brief mention of another villain of the modern music business: TikTok.
I discovered Substack and indeed I was inspired to create my own, through the wonderful writing of and the brilliant article below:
I digress. TikTok, the place where a viral jingle can get an artist signed quickly, despite there being no evidence that the artist themselves have any real chance of long term success.
TikTok, the place where even artists who have a huge following, have sold millions of albums and even generated a billion or more streams, are being forced to have a 'viral moment' in order to have their music released by the machine - case in point, Halsey among many others.
The big machine has decided to ignore the fact that these artists already have big audiences.
Ignore that they are proven in the market place.
Ignore that they already have fans who support the art they create with their hard earned money.
The big machine ignores these factors in favor of taking a vote from the peanut gallery — people who invariably suffer with shiny object syndrome in a digital form —as the primary method of decision-making on whether the art an artist is creating is worthy of release.
This is short-term thinking at an extreme level and it's a truly sad state of affairs, that despite the fact that the big machine is making more money than ever before, the music business has got to a place where it really no longer cares about artist development.
As you might figure, I'm a big believer that in every seemingly terrible situation, there is always a silver lining.
Such silver linings bring about huge opportunities and now I'm going to talk about why I truly believe the conditions are perfectly set for me to be able to fulfill the original objective I had fourteen years ago.
Before I do that, let me talk about one final thing.
When I talk about the big machine, I'm talking about the major record labels (Universal Music, Warner Music and Sony Music), along with the rest of the traditional music business.
I'm also talking about behemoths such as Live Nation who not only control many of the live music venues around the world, but also have an effective monopoly on the ticketing itself through it’s wholly own subsidiary: Ticketmaster.
And I am including the gross-commission-driven artist managers, agents, lawyers and business managers.
The big machine combined together is one that takes thirty (at best) artists in, and pumps out twenty nine of them broken into pieces and dumps them in the gutter.
The one that wins, as I mentioned earlier, pays for all of those who lost and even though they've won, the incredibly unfavorable deal structures means they rarely actually 'win'.
They don't actually win, because this is how it looks:
The record label deal they signed is a PPD (Published Price to Dealer) royalty deal, which means they get paid only after all the costs that are incurred by the label from recording, marketing, distribution etc.
These costs are not off the top, they're exclusively recouped from the artist’s share.
Let's keep it simple and presume that the artist has been given a 10% royalty (common for new artists), if the label spends $1,000,000 it means that $10,000,000 has to be generated in order to recoup.
Only... the label will continue to spend.
$100,000 on an extra marketing campaign, now the artist needs to bring in another $1,000,000 to get back to zero.
This cycle goes on and on, and the label will always be spending, ensuring that the artist never recoups.
This is how TLC sold 14,000,000 albums in one year, generating 100's of $millions in profits for the label, while only receiving $200,000: the advance they got for signing the deal in the first place.
If this all sounds rather bleak, it’s because it is, however, it's just part of the extreme exploitation that is unfortunately shrugged off as being ‘just the way it is’ in the music business.
I'll reserve discussing in detail about the other players for future articles, but, from what the artist does get, there are gross percentage commissions being charged by multiple players.
For example, traditionally an artist manager might get 15-30% gross commission.
Let's say it's 20% (very common), the $200,000 the artist got, is now $40,000 light.
Managers commission upfront on these advances and the artist has to use the funds to get by for what can be anything from 2-4 years.
On top of that, there are lawyers and business managers getting their slice of the pie, also upfront and gross.
All in all, it's a situation where the artist is the least rewarded player in the team, despite the fact that none of it exists without them.
I have one final thing to explain before I take you through the final and most important part.
Let's call the big machine the traditional music business.
And the so-called new music business is called 'kill yourself while trying to make it work', AKA as the DIY music business or the new music business.
The new music business is significant, because it now accounts for a sizable chunk of the global recorded music market, at around 30%.
With the emergence of the internet and Apple creating a solution to solve some of the problems around piracy, there was a movement towards creating distribution systems that would allow anyone to upload music firstly to iTunes, then other download driven marketplaces AKA Digital Service Providers (DSPs).
After downloads, came streaming via Spotify, Apple Music, YouTube Music, Amazon Music etc.
The new music industry has seen the creation of a multitude of distribution companies, who, for a flat fee (as low as $20 per year) or percentage (5 - 25%) will ensure that the artist's music is promptly delivered to DSPs.
These distribution companies have one interest only: to make as much money as possible by doing as little as possible, through luring in artists at scale (as of right now, there are an estimated 8 million artists worldwide who have music uploaded to Spotify).
A combination of access to the DSPs and an increasingly low cost barrier to entry to self production, has seen this explosion of of wannabe artists - all ready to make their own little bit of noise in the marketplace - grow year-on-year, to the point where there are now over 100,000 tracks being uploaded to the DSPs every single day.
With music created, the yearn for exposure is a big one, why would an artist make music only for nobody to hear it?
This yearn is compounded further, by the need to be recognized - with vanity metrics now including how many streams and listeners an artist has on Spotify, on top of social media numbers being generated on TikTok, Instagram and YouTube etc.
At this point another player enters the game, the 'Music Promotion' service company, who promises to solve the artist's exposure problems, both on streaming and social media platforms.
With such a huge volume of music being released, the demand for artists yearning exposure is at an insane level.
There is one major problem with this.
With so much music being self produced and the barrier to entry being zero - with no quality control checks on the music itself - the majority of these 100,000 tracks being uploaded every day, are unfortunately often not fit for human ears to consume.
But, this is not a major problem to the ‘Music Promotion’ service companies, not at all, because they have playlists and ways to find ‘real people’ who will absolutely love your music, even if it's literally inaudible.
The sale to the yearning exposure artist is an easy one, but the people who will listen to the music not fit for human consumption, don't actually exist.
Here enters the infamous bot, bots that can do most anything you can imagine in both the social media world and the streaming world.
Now would seem to be a good moment to introduce my good friend and colleague, Mr Vin Clancy who has crafted this exposure article:
If you read his piece you'll learn that everything you see on social media in terms of vanity metrics can be faked with ease and for pennies.
Instagram followers, likes, comments, shares - all readily available.
YouTube / TikTok views, likes, comments and shares - all readily available.
Vin purposely left out the section in his exposure article about the music streaming bots, to allow me to reveal this myself.
I'm not going to go into details on this now, that's a place for an entire article, but there are 'panels' - the place where you activate the bots, to allow you to generate, acquire and manipulate every metric imaginable on streaming platforms.
So, here is how it works: the 'Music FAKE promotion' company offers services to help artists get all of the exposure they ever need. They charge a premium for this, because artists believe that to get real people listening and engaging, it would cost a pretty penny.
The unsuspecting hungry, exposure-yearning and, well, desperate artist, invests into said services, achieve a spike in the vanity metrics they desire, perfectly delivered to the exact numbers the 'Music FAKE promotion' company promised and within the desired time frame.
Until the service is completed at which point the streams, follows, listens goes from great numbers, to crickets in the flick of a switch.
There are lots of other things I can talk about in relation to the new music industry, but the final thing I'll highlight is the rise of the 'Internet Music Marketing Guru'.
These people are often failed musicians, or failed music industry employees who can leverage stories of the past as a mechanism to show credibility - despite the fact that they had absolutely nothing or very little to do with the artists success.
Many have actually have no true claim to success at all, yet, they create education programs and content designed to lure DIY artists towards following their methods via eCourses, group coaching and consultancy services.
To this day, I have yet to see a single artist follow the 'Internet Music Marketing Guru' methods, actually build a highly successful artist business. It's not to say they don't exist, perhaps they do, but the reality is that just like the 'Music FAKE Promotion' and the distribution companies, they don't care if the artist's music is not fit for human consumption or is totally inaudible.
They only care about making money from the millions of DIY artists yearning for exposure.
Between the big machine and the DIY marketplace, there is an incredible amount of noise, so much so, that most artists are simply overwhelmed with information, confusion and are drowning in a sea of advice.
The music industry is so fragmented, disjointed and broken, it's no wonder why artists are struggling to make ends meet or launch a successful career.
Further, the advent of the new music industry has added fuel to the fire, making it more fragmented, complex and uncertain than ever.
The level of commitment by these various new players is invariably non-existent, meaning they have little to no skin in the game to justify making a real investment into artists.
All of this means that artists still see working with the big machine as the only option to make a serious attempt towards having a successful career.
To this day I still can't believe that such an unethical music industry has been allowed to continue for so long or that nobody has been prepared to truly tackle it head on.
Initiating any type of change is never an easy task, not just because of the resistance by the big machine, but also because people are far more happy to stay safe inside of their comfort zone.
The truth is that comfort zones inhibit creativity, vision and drive; the opposite of what it takes to create meaningful change.
As I write these words, I am doing so not only to provide you with value, but to make myself accountable to execute on every action necessary and within my power to make the mission I have set myself become a reality.
This mission is one where when it becomes reality, will ultimately make the world a better place for all of us.
This mission is to 'Build the Biggest and Fairest Music Company in the World'.
The vehicle and brand tasked with overseeing this mission, will be called 'High Time'.
High Time will officially launch on February 24th.
I will be publishing an entire article on how this mission will become a reality in the coming days, but let me outline to you now, some of the fundamental components that will make this music company incredible to artists, people who work with artists and to the wider population:
High Time will be a music company that is obsessed with 'People Metrics', so much so, that 'Vanity Metrics' will not even be a consideration when deciding if an artist is ready to be partnered with towards helping them to make the biggest impact possible with their art.
High Time will be a music company that is not only loved by the artists themselves, but also by the consumer. Through the creation of direct transactional connections with music fans (almost everyone on earth), High Time will bypass the inefficiencies of both the traditional and new music industry.
High Time will create an ecosystem that will see songwriters - the absolute heartbeat of the entire industry - begin to get rewarded financially, not only from the revenue streams they receive today, but also from all other income streams their works have contributed towards generating.
High Time will create fair, equitable and long term partnerships with artists who have the qualities both in terms of talent and 'People Metrics' to become viable and successful businesses. High Time will support these artists through the good and especially in the bad times. To this end, High Time will be a music company that becomes a real alternative to the big machine, for artists who have the aspirations and desires to become global superstars.
From day one of launching, High Time, will provide viable, effective, affordable and legitimate services to artists. These services will include distribution, promotion, accountability and support at unprecedented levels. Only those truly ready to receive these services will have access to them - for those not yet ready, support and education will be provided for free to help them get there.
High Time will be self-sufficient and will therefore never have to partner with the big machine nor get into bed with the devil by accepting Venture Capital financing. High Time will never sell or be purchased by the big machine or any other party motivated purely by money.
High Time will narrow the value gap*, through sharing profits with artists within the ecosystem, including profits from revenue sources not directly generated by the artists.
*The value gap in music is the massive discrepancy between what an artist gets paid for the music they create and the commercial value that their art brings to a label or streaming provider.
In taking on this mission, I've decided to be the person to lead the charge towards the change I want to see.
As I commence this journey I do so with my eyes wide open—the powers that be will no doubt try to stop me (as they already have!)—but, with a level of clarity, understanding and determination that will see me utilize not only the experience of the past fourteen years, but of my entire life so far as an entrepreneur.
I’m truly excited, because I believe that not only is this mission achievable, but that the demand for it is so big—not just from artists and people who work with artists, but equally by the wider population—and that it can happen much faster than anyone would believe were possible.
My single objective with creating this Substack is to use it as a way to galvanize and activate a community of people who believe in this mission as much as I do myself.
No matter if you're an artist, if you work with artists and especially if you consider yourself to be in the ‘wider population’ category of person, my plea is for you to subscribe to receive my updates—your support is greatly needed and my promise to you is that you’ll learn things about the music business that will likely horrify, shock and move you to want to see major change happening.
It's High Time for change - #TheTimeToDoIsNow
Carl Hitchborn AKA 'The Baker'
P.S. In between now and the High Time launch on February 24th, I’ll be posting 60+ valuable, insightful and eye opening pieces of content.
Some of this will be contrarian, with topics such as:
Fake stream, follower and engagement numbers have wasted millions of dollars for artists - here’s what you should be measuring instead.
Spotify saved the music business - and I’m tired of acting like it didn’t.
The Russ ‘Illusion’ - Russ calls himself a voice for the “little guy”, an independent artist against the big bad industry - but here’s why his narrative isn’t entirely true and why its bad for artists who look up to him.
Artists big and small refuse to invest in growing their fan base - here’s why that’s a very bad thing.
Do less, not more: growing an artist project is simpler than most people think - IF you can get these basics right.
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