Current and Future Trends in the Entertainment Industry

Today’s entertainment business in on an ever-changing plan, this plan balances between traditional and digital solutions for each of the major industry products. An example of how the movie industry is still the same as it always was but advancing by leaps and bounds in the public eye would be the need for high definition digital projection systems. Though the demand for seeing a film in a theater is more popular than ever the days of the moving platters from reel to reel have been finding they way out of movie houses for years. These days, the film industry licenses a copy of the film to the theater that wants to show it to the public, it’s then mailed to the theater on a hard drive and then the film is loaded into what is known as the L.M.S. projection system where it can then be scheduled to transfer to whichever house projector needs to play it. The digital key to unlock the film on the hard drive and for each of the projectors is then installed to the main system from a USB drive and the film then has permission to play for whichever allotted amount of time the theater has paid for its licenses.

Some of the trends in the music business that should be paid close attention to can be divided into the three following segments:

Breakthrough Trends

Reports from the recent New Music Seminar are showing where “Albums Earn Less but Songs Learn More”, “Top 100 Songs All Have Shorter Introductions”, “Singles Are Taking Longer To Break Than Before”, “Half Of Recorded Music Revenues Were Digital In 2011”, “Digital Music Retail Dollars Are Up By 44%”, “Music Sales Volume Is Up By 85%”, and “Music Metrics Show Paid File Sharing Trends On the Rise”.

Staying Ahead of the Curve

To stay ahead of the curve industry professionals are looking at the key elements that compel a person to download, purchase, or view content released by major labels.

Peter Spellman has a great blog about jumpstarting careers in the music business and also lists several different ways a person can capitalize on the current market trends and the near future in the music business. A few of these examples include:

1. Empowering the music consumer to view content through any medium they’d like, such as AOL Music, XM Radio, iTunes, etc. 2. Using a music product as a music service, meaning “anywhere, anytime listening and entertainment. 3. Building creative alliances with existing companies, taking advantage of low overhead and the ability to morph as a project. 4. Segmenting music markets and niche market cultures into micro-media off-spins with high-quality music and releases. 5. Know and understand that the next big thing starts out small. In yesteryear there were only three major networks and if an artist were able to get on one of those networks success was almost guaranteed. These days, there are hundreds of smaller networks, take advantage of the smaller ones and create one gigantic representation of the featured product.

The Future of the Music Industry

Many speculate as to where the future of the music industry will be, no one quite knows for certain how each stage of evolution will play itself out, but what can be determined by the direction of the industry, according to Jason Ankeny’s webinar and blog, the future of the music industry lies within each mobile device.

Streaming media services like Spotify, Rdio, and Deezer have ushered in a new era of mobile experiences that are not only redefining how users discover and share music but also how the record industry will promote music in the future.

Some of the advantages of the “music on demand” approach directly affect the physical cost of the products’ production. Digital technology is easier and more convenient to the consumer and gives the artist more budget money to concentrate on the quality of their recorded product and marketing strategies. The royalty returns are usually fair and the reach of the product can grow on a large scale without having to wait on CD pressings, factor in shipping costs, or allow for product breakage.

Breaking Into the Local/ Regional Market for New and Existing Talent (Tad Dickens Interview)

One of the great pleasures of being a local musician is the ability to creatively express oneself in front of both peers and other music lovers, in a local market or region. The privilege of being able to showcase talents that have taken an individual, or group of individuals years and countless rehearsal hours to hone can be a very exciting and validating experience to those with a desire to perform in public venues.

Today, I had a great conversation over coffee in my own hometown with one of our industry professionals and local heroes, music reporter Tad Dickens of the Roanoke Times & World News. Tad is an artist himself with formal training from the Musician’s Institute in Los Angeles, CA and over ten years of real world education in various touring bands. Our conversation has four main focal points with some excellent insight on how local musicians can become either a performing part of their local scene or an even more viable part of the entire region.

I. What makes a local project marketable and ready for expansion into the region?

·       Make the project simple and easy to review

·       High Resolution Photos

·       Short Bio

·       Plan for self promotion

Explanation:

A talent buyer, music writer or industry professional that usually receives a large number of submissions each week doesn’t really have a lot of extra time to seek out reasons to like, book or want to review a project that may otherwise have great potential. If the submission is clean, easy to read, good quality and answers the who, what, when, where, why and how of the information the group is trying to convey, it makes the entire process much easier for the person considering and researching the project.

Photographs and recordings (live or studio) should always be good quality. More often than not, a group will get overlooked because their press shots and recordings aren’t in the proper format to be featured in the media.

The band biography should be easy to read and convey the group’s information clearly to everyone wanting to learn more about the band. The shorter, the better; pack a great punch, but do it in one page or less. Music Dish’s E-Journal has an awesome resource for learning to elevator pitch a band’s bio for press-worthy consideration.

II. What are the key things a group needs to do to get involved in their local or regional market?

·       Get the right venues

·       Be persistent but not pushy with the talent buyers

·       Be dynamic in the promotion of shows

·       Be well rehearsed and honest with themselves as a musician and someone that wants to perform in front of an audience

·       Professionalism

Explanation:

One of my favorite quotes is “Success is stumbling from failure to failure with no loss of enthusiasm.” –Winston Churchill I am a firm believer that persistence is a virtue and if handled correctly will pay off tenfold; however, when calling a talent buyer, club owner, music writer, etc. more than once a week without their solicitation or request, this is an absolute sure-fire way to shoot oneself in the foot and potentially have them cringe each time they hear the caller’s name. (Note: this is not a positive cringe)

Some venues are more receptive to certain types of music and groups than others; this is simply a fact. Booking an original punk band at a cover venue or jazz club usually doesn’t draw the best crowds for that particular show. Booking lots of clubs at first and then narrowing down where and how often the project performs in that region will be a huge help when trying to build the best audience for the performance(s).

Once a group is starting to book shows and establish their presence in a particular area it is extremely important to be well rehearsed and play each show as if the group is at a civic center or well-known venue, to a packed house. People that are initially excited to come see a show and tell all of their friends how great the band is won’t usually come back if the group seems let down by the turn-out or the quality of the venue. Have fun and love the fact that the group is actually playing live! This will work to the groups’ advantage every time.

Be dynamic in the event's promotions. Though digital technology and social networking are huge pluses for a project, and also has the potential to help save money in advertising dollars, that doesn’t mean that each member of the group is exempt from becoming an active part in their own street team. Blending traditional advertising (print ads, radio spots, local magazine announcements, newspaper announcements, flyers, etc.) with the digital marketing (Facebook, Twitter, Reverb Nation, blogs, RSS feeds, etc.) in conjunction with the venue getting behind the performance and lending their own promotional efforts is absolute the best method for drawing and retaining larger crowds at each show or event.

Finally, being professional. I spend a great deal of time speaking on professionalism in the music industry, so it was great re-enforcement of that principal to hear Tad speak on the subject as well. No one is saying that a band can have a great time at the shows or that that they can’t live La Vida Loca if that’s what they chose, but what the industry professionals are saying is that there is a time and place for everything. Being honest about what the group looks like to the club owner, talent buyer(s) and show-goers should be at the forefront of the entire thought process and at the top of the preverbal list. The absolute last thing a group with great local success potential needs is to be blacklisted from the venues that are gracious enough to give them a shot and open the doors to their project. It’s better to address this issue upfront and keep each person on the same page, or put the project on hold until the group has the right members to accomplish their goals, instead of making each individual member of the project look bad to the public and other venues in the area. It is a huge disappointment for a music journalist to be excited to scout and review a band and then leave thinking they’ve wasted their time due to lack of professionalism. A great interview on band professionalism is the Ramones interview “End of the Century” and on what Brian Epstein brought to the Beatles concerning being true professionals.

III. What are some suggestions for people searching for other like-minded musicians to write, record and (or) perform?

·       Network, Network, and Oh Yeah, Network

·       Local publications, forums and musicians’ boards

·       Tradeshows (if applicable)

Explanation:

The busiest musicians are the ones that are out networking with other musicians. Supporting the other bands and musical groups in the local area is a huge plus when it comes to finding other like-minded talent with which to partner for additional projects. Having a strong alliance with the peers in the music community leads to recommendations and word of mouth advertising and then ultimately a diverse group of people that can be called upon to fill a spot, a gig, a recording need or any other number of voids in a local music scene.

Tradeshows and industry get togethers can be a great way to network for other musicians. Companies like the Music Taxi, OneSheet, Harmony Central and The Local Musician Union, all have wanted listings for musicians in each local network, as well as Craigslist want ads, local musician boards, music store musician boards, coffee shops, etc.

It’s obvious that some areas have more musicians than others, but the only tried and true way to find others to work with is to go out there and look, regarding what works best for that particular project.

IV. What are some examples of groups making headway in the region that others can learn from?

Tad and I briefly talked about some of the more interesting new bands and regional acts that he’s had the opportunity to see in the area. Here is a short list of some that are currently doing great things and also some groups keep an eye on in the near future.

The Sword, Baroness, The Floorboards, The Bastards of Fate, Heevahava, Mafia Track Suit, Madrone, Amanda Stathos, The Niki Barr Band, Honor By August, and My Radio to name a few.

It is always a pleasure talking shop with Tad Dickens. He’s truly an asset to the local community and well respected by every venue and musician in the region. If and when you see him out and about in the Roanoke, VA area, please don’t hesitate to shake his hand and thank him for all that he does for the community and spreading the word on what’s happening in the area musically.

Plan, Plan, Plan... and then Execute! Updating and Improving An Investment Pitch.

The past several weeks I have been updating and revamping my management company’s feasibility study, in a way that will allow for some of the critical data to be included in the final business planning and better convey to the potential investor(s) how they will profit from their equity portion in the business. Over the past two years I have found some great resources for identifying and understanding which aspects of a persons’ company are the most appealing to an investor as well as which elements are the most important when pitching the business’s ideas and financial structures to others that could help grow the business. Some specific resources are: The Small Business Administration, Roxanna Webber’s Blog and Forbs Magazine’s professional sections on what investors are looking for in a pitch.

Recently, I had the opportunity to study some of the Reid Hoffman methods for investing in and obtaining funding for new businesses and start-ups. Some of Mr. Hoffman’s ideas have truly changed the way I view building and pitching new company models to others. These new approaches are simple, yet quite valuable to anyone looking to gain funding for their own venture; after all, the main goal of showing a potential investor how a person’s plans on making money is to give the investor a more clear idea of how his or her money can better work for them by giving the entrepreneur a portion of it to start or grow their business.

Mr. Hoffman says, “Poor planning often is the death of great ideas”. Being clear on how it is that the company will make money and how easily an investor can recoup their initial portions is absolutely one aspect of my own personal planning on which I will spend a great deal of time.

Some specific changes that I have made thus far, that I’m hoping will help others reading this blog include:

•       Spending more time explaining how and why my company is relevant and making sure the investor can clearly see how and why they will profit from the joint venture.
•       More clearly explaining the overall state of the market and ability to learn and grow from its past mistakes in the future, as well as briefly spending time on how newly forming trends will help propel the business through its developing stages.
•       Describing, in detail, which are the target consumers of the company’s services are, as well as who the target customers are for what the company develops in these emerging projects.
•       Describe which companies or individuals are in direct competition with the company’s business model, how to overcome those obstacles with a more modern up to date approach, and most importantly how to become strategic partners with those other entities that would normally be considered direct or indirect competition to the business.
•       Simply and clearly showing how the low overhead and duplication process in the company structure will show greater long-term profits without having to over extend the list of projects at any given time. This will not only solicit the help of the potential investor in the scheduling of which projects will be released in the future but will also help the company grow by getting the knowledge of a veteran in the financial and investment industry. 

Though each of these aspects all work hand in hand with the ability to convey the ideas and profit potential of the company, I feel that being simple in the explanation of what the company actually does in the industry, in conjunction with clearly explaining why my business’s approach to working with artists is more unique and mutually beneficial to other professionals, will more than educate the investor on what the business is and how it will profit for them in the near future. After all, investors are in the business of making money on the great ideas and hard work of others. If a person can clearly and easily show the investor how they will profit without a ton of their own input or confusion, this will prove to be one of the deciding factors and most important aspects of what is being pitched to the potential backer.

The Value of the Business Plan

To often people ignore the power of pen and paper. Many people aspiring to become more in business have great ideas, but by the time they start talking to someone about investing in that idea or business, the details are either forgotten or not retainable by the potential investor.

There are many benefits to writing a business plan, and even completing a feasibility study for the project in the market for being funded. Other than the obvious benefits of knowing and understanding the markets and how a company could benefit from being introduced into a specific one, it gives the writer a professional’s insight to their own ideas and also offers a medium that can be placed in front of a complete stranger to go over the ways they could perhaps make money with a solid partnership with the venture.

This week I’ve researched two experts who have done great things with their business plans.

Reid Hoffman, the co-founder of LinkedIn and investor in PayPal and someone that is considered to be a prolific angel investor. Mr. Hoffman is an accomplished entrepreneur, executive and angel investor. He invests in many technological companies and usually helps drive them to success through their early stages and periods of explosive growth.

According to his guest blog on TechCrunch some of the most important aspects of the business plan include: the ability to reach a massive audience, the unique value proposition and whether the business will be capital efficient or not. This is part of the reason that he likes to invest in software and technology. A product like the iPod or iPad can grow from nothing to everything very rapidly.

The second expert I researched this week is David Skok, Mr. Skok has built three very successful companies that have exceeded 100 million dollars in revenue in 20 different countries and also employs over 800 people.

David best known for his value in helping JBoss, Netezza, AppIQ, CloudSwitch, Tabblo and Diligent Technologies to successful exits. David serves on the boards of CloudBees, Digium (makers of the very popular Asterisk Open Source PBX/telephony software), Enservio, GrabCAD, HubSpot, Meteor, OpenSpan, and VideoIQ.

David is a very popular blogger among entrepreneurs and spends a great deal of time writing articles on the viral marketing machine and how it can help new startups and business owners.

David wrote a great blog on which aspects of a business plan are important to the future owner. Some of his tips regarding the value of the business plan are: understanding how startups are valued, identifying risk, mitigation of risk quickly, matching the milestones of capital, validation of milestones and avoiding a down round at all cost.

Both of these individuals explain that key elements to an investor spell money and profitable return on their investment. Being confident in the person asking for the investment is a huge portion of their ultimate decision to invest or not to invest. Knowing and understand how the entire planning process works is a key element in securing the right funding for the project and also gives the future business owner the ability to better understand and negotiate the terms of the agreement.

Coffee, Conversation and Strict Liability of Dangerous Activity(s) In the Music Business

Today I had the opportunity to discuss legal liability issues with a friend, whom just so happens to be an entertainment attorney. Normally, when a person asks me “what are you doing, as a project manager, to avoid liability on tour?” I cringe and feel as if they’re trying to sell me something or get me to invest into a “new business idea”, but in this case I truly got to learn about how a group can be affected by both chance and tragedy.

Many people dream of becoming successful in the music and entertainment industries; either by managing a band, booking nightclub projects, touring with a group, or just simply being part of a well known theatre production. The majority of these individuals have very little formal training in business, entertainment business, or music composition; only the passion for helping artists realize their dreams through hard work and dedication. One of the most important parts of being successful in an industry based around aweing crowds, upstaging competition in the marketplace and constantly trying to innovate artistically without becoming unmarketable, is to understand which liability issues could directly affect their careers and witch aspect(s) of their groups’ performances could cause the beloved professionals to find themselves in a serious legal battle.

One significant liability for any type of public production, regardless of the size, is called Strict Liability of Abnormally Dangerous Activities. The basis for this liability is founded on creating an undue element of risk or harm to others in a community, regardless of how much care was exercised in the undertaking of that risk.

A specific example of such a risk is the case of nightclub owners Jeffery A. and Michael Derderian, as well as, road manager Daniel M. Biechele. This is a strict liability case where the tour manager of a group set off pyrotechnics during a performance, without proper licensing or permits, and a flammable material intended for insulating the walls and celling on and around the stage caught fire engulfing the entire venue in less than 5 minutes, injuring over two hundred people and killing one hundred individuals.

During the investigation, the two owners of the nightclub and the band’s tour manager were charged with two hundred counts of involuntary manslaughter and earning themselves prison-time, probation, and restitution fines for the victims’ families. Because of this type of liability, not only were the owners of the venue and group’s road manager held criminally responsible, there was a huge backlash of civil cases filed and nearly one-hundred-seventy-five million dollars has been offered to the families of the fire victims.

Lawsuits were filed against anyone and everyone thought to be responsible for any part of this tragic incident. Among the companies and state representatives that were included in the law suite are: JBL Speakers, Anheuser-Busch, Clear Channel Broadcasting, Home Depot, Polar Industries, Sealed Air Corporation, Great White Band and the American Foam Corporation.

Some of the insurance policies that are available for a nightclub and/or touring artist(s) are:

Band/ Touring Group

1) Touring Artist General Liability Insurance. This type of insurance is the industry standard for a touring group and is similar to the general liability insurance that a promoter or venue would have. 2) Workers’ Compensation Insurance. Many states require a company to carry this type of insurance, it provides for injury and death benefits to employees that are injured on the job. The band lost a member during the fire and this type of insurance would have helped his family with burial, lost wages, etc. 3) Musical Equipment Property Policy Insurance. This insurance covers certain types of damage to sound, lights, and related musical gear. There is an additional policy that can be included in this type of insurance that would have covered the pyrotechnical gear if it had proved that it malfunctioned. 4) Touring Artist Cancellation/ Non-Appearance Insurance. If the group would have had this type of insurance, even though they had to cancel the rest of that particular tour, their revenue stream would have continued for what would have been considered the remainder of that set of show dates.

Club/ Venue/ Promoter

1) Spectator/ Premises General Liability Insurance. This type of policy is very beneficial in releasing many of the liability issues of the promoter, club owner, or venue. If this particular policy had the option for a pyrotechnic policy it would have probably prevented the club from having any of the cover for the claim. 2) Workers’ Compensation Insurance. This policy is the same as the band’s policy but would have been beneficial to the employees’ families of the venue that had been injured or perished. 3) Property Policy Insurance. Depending on the terms of the lease with the owners of the building this insurance would have covered the liability issue pertaining to the building and the business’s equipment that was destroyed in the fire. 4) Business Interruption Insurance. This is a policy that provides loss of income coverage due to the destruction of the venue. Typically, this insurance will pay for the loss of income for up to twelve months.

Many lessons can be learned from a management standpoint regarding this incident. Though many of the circumstances that led up to actual fire could have been avoided, what a perceptive road manager or business owner will take away from researching this case is the ability to hope for the best but plan for the worst. Having proper licenses to utilize pyrotechnics, proper planning for a mid-level tour should be considered rather than trying to bring such a large scale show to the small event, making sure all of the proper disclosures are signed with the venue before playing the event, working with local fire and ems services for any event that will draw a large crowd, having an emergency exit strategy in place if an issue were to occur, and making sure that all applicable policies have been purchased before the group embarks on the tour and/or the venue is open for business.

Applying these painful lessons to future business is quite simple, and following five simple rules can do this.

1) Make certain all policies are in full force. Policies include: general liability insurance, workers’ compensation insurance, automobile liability insurance, property insurance, and business interruption/ event cancellation insurance.

2) Check the limits. Know how much liability insurance is needed per venue, especially if the club doesn’t hold more than a few hundred people.

3) Make sure the policies cover the activities in the show and what is done onstage. If there is no pyrotechnic clause in the policy it is a great idea not to have pyrotechnics or explosions in the show.

4) Know and understand the financial strength of the insurance carriers. Make sure the insurance carrier is well known with a fair track record and does business honorably, a B rating or better.

5) Make sure the insurance broker knows the type of business the group is in. It makes a great deal of sense to have an agent that actually understands the project and its individual needs, especially if the show has any element of danger.

In conclusion, there are no foolproof ways to completely eliminate the potential for someone or something being injured at a live event. Regardless of the situation, a professional entity has a moral and ethical duty to its followers, patrons and/or fanatics to spend as much time as necessary planning for their safety and the safety of the overall company and/or event itself. Being aware of the changing laws and regulations, as well as being reasonable when pertaining to the design and parameters of what the performance has to offer any given venue. Paying attention to the mistakes of other companies and applying the best business practices available will help eliminate as much liability as possible and better provide for a successful, entertaining platform and medium for all to enjoy.