Blues Music In The Digital Age - Part Three - Licensing and other Revenue Streams

By Nikki O’Neill

With the massive changes in technology that have taken place in the music and media world for the last 10 years, we at Blues Blast Magazine wondered how these changes are effecting the Blues music industry and Blues artists.

How are digital downloads and social networks affecting the careers of Blues artists — especially those who aren't computer savvy? We contacted a number of prominent Blues labels and publicists to hear their thoughts on marketing the Blues in the digital age. We also included a Blues artist and founder of a Blues society, who actively uses Internet technologies for promoting and networking in the Blues community.

Everybody answered independently, without hearing the other's responses.  In part three of this report we look a how Licensing, other Revenue Streams and marketing trends are impacting the Blues music market. We sincerely thank those who took the time to respond to our questions:

Bruce Iglauer - Alligator Records

Scott Billington - Rounder Records

Thomas Ruf - Ruf Records

Jerry Del Guidice - Blind Pig Records

Randy Chortkoff and Robert Fitzpatrick - Delta Groove Productions

Joe Morabia - Blues Leaf Records

Steve Dawson - Black Hen Music

Michael Powers - Yellow Dog Records

Mark Carpentieri -  M.C. Records

Richard Chalk -  TopCat Records

Fred Litwin -  Northern Blues Music

Michael Frank, Earwig Music Company, Inc.

Betsie Brown - Blind Raccoon (publicity firm)

Mark Pucci - Mark Pucci Media (publicity firm)

Phil Gates, founder of the Los Angeles Blues Society, producer and blues artist
 

As record sales are going down, alternative revenue sources have become increasingly important to artists and music companies of all genres. Many hope to get their music into film, TV and ads through so called synch deals (synchronization = putting music to moving images.) Others aim to get their music into games like Guitar Hero, and then we have the world of ringtones, plus various types of merchandising and licensing deals. But how lucrative are these areas for Blues musicians and Blues songwriters, really?

Richard Chalk: Synch deals are where the "Big Money" is. Ringtones and games are miniscule revenue generators for us. Licensing/distribution deals are very important.  

Fred Litwin: Synch deals can be huge and are important.. ring tones are not that important anymore.

Bruce Iglauer: Synch deals for film and TV can be very important and lucrative. We spend a lot of time trying to get these. We have placed songs in many TV shows and some feature films. Ringtones have proven to be a very small market for non-pop music. Frankly, they're not worth the effort. We have pushed hard for Guitar Hero, but still no luck. We've had one other game placement, some years ago, in the UK. So far, we've done very little with licensing of our logos or artist images, but we have licensed for lots of CD compilations. We are working hard to place music in advertising, but with very limited response so far.

Scott Billington: Licensing for film, TV and commercial use can be a good source of income, although it’s obviously hard to predict. We have an in-house person as well as an outside agency dedicated to finding placements for our music. A licensing highlight for me was when the Johnny Adams recording of “There Is Always One More Time” was used over the opening credits of the Eddie Murphy/Steve Martin film, Bowfinger. Not only did millions of people get to hear Johnny (probably more than ever heard him before), but Johnny’s widow, the songwriters and Rounder got a nice payday.

For ringtones or games to generate much income, you generally need a hit record. Lately, we have gotten more involved in creating merchandise for a few of our artists. This requires an agreement akin to a record contract.

Jerry Del Guidice: any label that's going to survive has to generate income from as many sources as possible. Half our income comes from sources other than physical sales nowadays. I would think this will increase significantly over the next few years.

Michael Powers: All of those are potentially lucrative, but are also really hit-or-miss because they require you to have exactly the right thing that someone else needs at exactly the right time for them.  There are things you can do to increase your chances of being in that situation, but I wouldn't want to rely only on revenue from those sources.

Mark Carpentieri:  We’ve had songs and music placed in movies and cable TV. Didn’t see much of a bunch in sales after the synch. That’s why it’s important to get paid.

Phil Gates: From the DIY point of view, all of these resources are important. I'm not a label, so for my artists the ringtones and merchandising are as important as the CD sales themselves.

Steve Dawson: a) Synch deals for film/TV are very valuable. When you can get them, they can provide a solid source of income. Some are small, but some can be significant.
b) Ringtones - I have no interest in those. I guess I'm ignoring a revenue stream there, but I find it kind of a repulsive way to sell music, speaking mostly as a music fan. I just don't like the idea of putting effort into something like a ringtone. I spend countless hours making records, and breaking it off into a ringtone seems ridiculous to me.
c) I've never had experience with games aside from playing guitar on one or two. We've never licensed music to a video game.d) Merchandising in the blues/roots field has always been a break-even endeavor. We never sell enough to profit, but it usually pays for itself and it's good promotion, so we get involved in it to a certain extent. But again, our focus is really on the music, so we don't put a lot of effort into the merch side - we let artists deal with it themselves.

Randy Chortkoff: HUGE!! As I said, it is increasing SLOWLY everyday.

Michael Frank: Synch deals for film are very important and a great way to make money for those who are patient. From the time a song or master recording is licensed, it can take over a year to get paid. Earwig and our artists do not get any significant revenue from ringtones, though all Earwig recordings are available through my digital distributors The Orchard and Bug Music, Inc. Game manufacturers seem to be interested in celebrity artists and hits. I am always interested in licensing and merchandising. I have over the years licensed tracks to other labels, and a few to films. I also sell all Honeyboy's CDs, books and DVDs by all labels, not just those done for Earwig Music. I also co-produced a documentary on Earwig and its recording artists, Six Generations of the Blues: From Mississippi to Chicago, and we are seeking to license it for worldwide television broadcast, theatrical release and DVD and CD sales. In this case, the documentary will incur significant licensing costs for synch licenses, but will hopefully also generate significant revenue after expenses, at least to break even and then some. Documentaries are very expensive to produce. 

More and more EPs are appearing on the Billboard top album charts, and many labels are trying that approach instead of releasing a full-length album once a year in order to maintain "buzz" and keep an artist's presence on the market. Does the EP strategy work in Blues/roots music?

Fred Litwin: No.

Betsie Brown: It works for the consumer, but it's still too early to tell if radio/media are ready for the EP in the blues world. In the roots world it is already being done.

Mark Carpentieri:  Not sure, haven't tried it.

Bruce Iglauer: Honestly, we haven't tried it. Traditional retailers aren't very interested in EPs. They want the larger profit margin from CDs. But at the same time, there is intense pressure from retail on the labels to give them prices so they can sell CDs in the stores for $10. This is really pretty much impossible, considering the costs of recording, paying the artists, paying the song publishers, manufacturing, advertising, promoting, publicizing and giving the distributor their sales percentage. Actually, if the price of CDs were 'fair' (based on the price of an LP in 1965) they'd sell for about $40. Pretty much the only things that haven't gone up at this rate are CDs and movie tickets. But movies have multiple income streams — theatrical, DVD sales, rentals, premium TV, commercial TV, etc. We have one income stream — sales of the music in either CD or download form.

Steve Dawson: It's a good idea in some cases, but I'm not interested in EP's, so we don't ever bother. The album format is still viable.

Richard Chalk: This is the traditional means of "breaking" a new artist or song, but blues fans seem to want the whole CD so as to experience and enjoy the artist's full range of music and talent.

Jerry Del Guidice: We haven't been doing EP's, but we are talking about doing some 45's. We also started doing select titles as vinyl LP's again.  That's been fun.

Joe Morabia: The EP strategy could definitely work, as an artist always has to have a new product to promote. A lot of artists make the mistake of waiting too long in between releases.

Mark Pucci: As far as EPs go, I think blues is a more “artist” and album driven genre, as opposed to pop/rock music, which has always been driven by singles or EPs. That was the case years ago with 45 rpm singles, before albums became the catalyst to help launch artists into much longer-lasting careers. Depending upon an artist’s timing and situation, though, sometimes a single or EP could work to bridge the gap between album releases.

Phil Gates: Does the EP strategy work in blues/roots music? I think it can, labels have been using slow release models for years. I might be wrong, but I think the blues audience is more the "whole CD" type than the single song type, but the EP might be a good lead in.

Robert Fitzpatrick: Blues is not a single driven format. The entire market is an artist driven one. It's not like the pop field where it's hit driven.

Scott Billington: EPs sold from a band website can be a good idea. The Billboard charts have very little to do with what a roots music band might offer to fans.

Thomas Ruf: Well, it's a strategy that works for some. Basically, the music industry is going back to the era of the pre-mid 1960's, when labels mostly produced singles and it was all about getting airplay. Later on, acts developed profiles as album artists — sometimes without having any radio hit singles. This is still the main concept for touring blues artists today: you make a new album; tour for two years to push the album until it runs out, then make a new album and continue the album release  and touring routine.

The younger generation that consumes music on iPods and computers and doesn't own a stereo system or CD/LP collection mainly downloads single tracks, not entire albums.

That's why labels in the pop field generally start carefully with a new band, by only producing a couple of tracks rather than an album, to see how it does. The label checks how the band develops a fan base before they invest into an entire album.

As long as there is a consumer interest in the concept of an album, there will be albums. If a younger generation does not rediscover the album format as an artist's concept worth owning and identifying with, it will go away.

Michael Frank: I think it could, although for a small label or independent artist without a label, the cost can be high, unless they burn the eps themselves. I think a monthly or weekly email and regular mail newsletter is a better approach, than doing an EP.

Here's a question about live shows, which is the main source of income for Blues artists. The jam band ethos — which was covered in a special issue in Billboard Magazine in August, 2009 — has always been based on touring hard, making money on merchandise... and letting fans tape shows. Billboard raised the question if this is the future success model for other genres as well. What do you think?

Mark Pucci: As someone who did a lot of publicity work with the jam band audience when I was the VP of Publicity at Capricorn Records in the ‘90s, and worked with bands such as Widespread Panic, that type of marketing and promotion was a huge factor in making Panic the big success it’s become.  And because blues music has an honest and real quality to it that jam band music does – many of the bands and their music are rooted in blues – I think it could work very well in being applied to a blues marketing and promotion campaign.

Bruce Iglauer: This ethos has worked for some jam bands. Some allow live taping, some don't. We totally object to it, as the blues artists don't make so much on their live gigs that they can forget about making additional money on CDs. If the audience records, they don't buy CDs. As far as merch, most (not all) blues artists sell CDs at gigs, and this represents an important part of their touring income. The CD sales can pay for the rooms for the night, or the repair of the van, or next month's rent. Now, more than ever, the fans can't find the CDs in the store and the gig is often the only place other than Amazon or the label website where the music is easily available.

Richard Chalk: CD sales at shows are very important. Merch sales are much less important. Allowing fans to tape/video/distribute live shows for free (usually ending up on YouTube), although good promotion, it doesn't generate sales revenue. However, this is difficult/impossible to  stop, so 'If you can't beat 'em, join 'em!'

Joe Morabia: Touring is really the main way to sell product. An artist can make a considerable amount of money from CD sales and merchandise, many times even more than the gig pays itself.

Scott Billington: Touring and building a fan base must be the primary focus of any blues artist. If people keep coming back, then merchandise, CDs, etc. make sense.

Fred Litwin: It is now essential for blues artists to sell as much merch as possible...

Thomas Ruf: I am surprised that so many people have this perception that jam bands are something unique. All of our blues artists make a living on touring, and they all must utilize the sales opportunity of their concert appearance by selling CDs, t-shirts and other merch.

Michael Frank: It is nearly impossible to stop fans in the audience from taping shows, even if they are asked or told they do not have permission from the artist, as evidenced by all the recordings on YouTube. Earwig artists for the most part are opposed to allowing taping for free. 

How lucrative is merch as an income source for Blues acts? What else can you sell in that area besides CDs and t-shirts?

Mark Pucci: Merchandising, if done properly, can be a bigger income generator than album sales for bands that tour a lot and develop the right products for sale at gigs.

Steve Dawson: It's lucrative, for sure, but we mostly leave that up to our bands. I think if you're touring a lot, it makes a lot of sense. If you're just doing local shows or touring in small amounts, it's not going to make much difference.

Phil Gates: Merch is only as good as the people selling it. It's Sales 101 at that point. The idea is to be creative. Place in the booth whatever you think can sell. Whatever sells, stays. What doesn't sell goes. Just like a dept store.

Joe Morabia: Besides CDs and t-shirts, you can sell caps and posters, etc. But you need to invest in all that, and that is not something many artists can do.

Richard Chalk: Novelty items: shot glasses, panties with the artist's or band's logo, etc. Very small volume though.

Thomas Ruf: Blues artists mostly sell CDs and t-shirts. There are very few other items that are of interest to the fans. Merchandise sales are a substantial addition to any artist's yearly income.

Bruce Iglauer: A few artists carry T-shirts or other merchandise, but as most blues artists are playing clubs with a few hundred people or less, investing in these things can be a risk. If you print t-shirts in bulk to save costs, it may take you many months to sell them. If you print less, the price goes up. The labels invest in the CDs, so it's easiest for an artist to sell them, rather than manufacture his own merchandise. I think that many of your readers would be surprised at the prices that blues artists command, and how difficult it is to survive financially playing the blues. To invest in merchandise, first you need the money to do so.

Randy Chortkoff: It's all about touring and trying to cross over to different audiences. Selling any kind of product at live shows is a great way to make money for the artists and keep the labels open. The problem is... some artists are so desperate and broke that they spend the label's or investor's money to support their gas, food or rent, etc., etc. This creates a situation where the labels or investors will not front any more product. It's a Catch-22. The artist must always remember... the profit belongs to them, but the cost of the product belongs to someone else. Artists starting out have to realize that spending what they owe the provider is cutting their own future supply and is comparable to stealing. Being a musician (as I have been), is a huge sacrifice but well worth the pain!!

Michael Frank: I sell books and dvds, and some artists sell ballcaps, pins, stickers, posters, photos. I sell whatever I can carry in my car or on an airplane in a suitcase, or that is not too prohibitively expensive to ship ahead, and to have to ship back if it does not sell on tour.

Selling CDs, DVDs, t-shirts or anything else that a fan will buy, is absolutely essential for any musical performer, local or touring. Labels now need their recording artists to buy CDs form the label, for resale, due to the vast numbers of stores which have gone out of business, that fans used to buy from. For touring artists, gig sales can make the difference between a profit, breaking even or losing money on any given night and on a whole tour. For musicians to do well on gig sales, it is absolutely essential that they stay after the gig as long as possible to sign autographs for fans who buy and for those who do not, and to get at least the name and email address of everyone whom they encounter while on their gigs, and add them to a mailing list, which they need to keep current by regular follow up with those fans.

And here's our last question: what marketing trends for Blues acts do you see happening in 2010?

Richard Chalk: More growth in digital downloads and blogs via the Internet. Continuing decline in physical CD sales volume. Now that the Grammys finally have recognized the blues as a major music genre and have established a separate blues category, hopefully this will result in growth of the blues market and increasing sales volume.

Phil Gates: It's all about getting the blues to more fans. The artists and labels have to stay on top of evolving technologies in audio and video. I also think the fans will have a bigger say, as disposable incomes shrink. So we need to listen to the fans, continually query them about how they like to listen to music, where, how, when, why, and make our products more available to how the blues community will see it as a simple, cost effective way to connect to the continually growing list of blues artists.

Joe Morabia: I don't really see any new marketing trends in 2010 that weren't done in 2009, but again, it is rather early in the year.

Mark Carpentieri:  Trying to work social marketing as best as you can.

Fred Litwin: More reliance on gigs to sell CDs and merch.

Thomas Ruf: The ways of doing business and promoting a career are changing all the time, but in essence I do not see much difference to what it takes to be successful.

Those who work hard, have long term goals, and are willing to pay the price without moaning about it — those who are in it for the right reasons and do not hold on to false illusions will find a place to perform their music and make a living. How large or how small their success will be depends on many factors, but in essence anybody who has real talent, real charisma and a kind personality, who utilizes it all well and works hard, will find an audience and appreciation.

Betsie Brown: Using all the tools effectively and efficiently. Working it day in day out. There's no shortcut for most of us. And don't get caught up in hype or the short-term fix. Have a plan.

Steve Dawson: I think web marketing will start to take over way more than print marketing. It's more affordable, and seems to be more effective these days.

Jerry Del Guidice: Blind Pig Records stays focused on the music and the people that make that music. The music should always speak for itself first and foremost. Good music is its own reward. Whatever shape the music business takes, and whatever trends develop, they will be developed by independent labels.  That's been the case throughout the history of the business, and I don't think that will change.

Mark Pucci: I think things will continue to develop as they have, with more downloads and an increase in ways to deliver music to existing and potential customers. For my money, however, there’s no substitute for hearing an artist performing live. Blues has – and will always be – best experienced in a performance situation, where fans can also enjoy the company of others who enjoy the same music. Blues is visceral; it’s a feeling unlike any other music that’s been done, or will ever be done, in my opinion. That’s what’s always made it so special to me.

Robert Fitzpatrick: As for marketing trends, I believe it is more imperative than ever for labels and artists to focus on touring and live performances.  This where the artist makes the connections with his fans and new audiences and gains acceptance, and in some instances, crosses over in to multiple markets.

Bruce Iglauer: We continue to base a great deal of our marketing around live performances. Almost all of our artists gig year around, and we create publicity and resulting sales around those gigs. We publicize every single artist appearance, with two full time publicists on staff, and two full time radio promotional people setting up interviews, in-station appearances, whatever they can.

We continue to depend a great deal on non-commercial radio. It would be incredible if there were a national NPR blues show, like there is on CBC in Canada, but it doesn't exist. We'll try to follow up on every new technology tool that comes along. For example, we're working with Pandora, last.FM and Spotify, the streaming services. They are very cool for the fans, but they pay so little for using the music that we can't count on them for anything except exposure.

The future may be in music 'rental' rather than ownership--basically streaming on demand. But if that's the case, someone is going to have to figure out how to glean enough money from that to pay the cost of making and promoting new records.

Frankly, I'm very anxious for the future of the recording business, and not at all sure that most of the blues artists can survive and have careers without the support of the labels. It's relatively easy to make a record these days; almost every "weekend warrior" band is doing it. But taking the steps for the public and the potential audience to discover and embrace the music requires a huge amount of effort and expense.

Commercial radio and major media isn't going to pay attention to someone with a self-released record. Also, do-it-yourself artists aren't necessarily do-it-yourself publicists, or distributors. And traditionally blues artists are people with very little in the way of financial resources. So, they must depend on folks who can invest in their careers. Mostly, that means labels. And because the blues market is very small (perhaps 1% or less of the music sold in the USA), no one with big money is likely to invest in making a blues recording or managing a blues artist, because the chance for any major financial return is so slim. It's a really, really tough business, both being a blues artist and being a blues-centered record label.

We hear all the time that 'the blues will never die', but no one says that about rock, or hip hop, or classical, or many other forms of music, because they aren't in peril. The blues is. For blues to have a future, we need younger fans, we need the loyalty of older ones, and we need blues to continue to evolve so that it is relevant to a new audience. The existing blues audience hasn't been very hospitable to artists trying to push the blues envelope and widen the definition of blues, even if some of the critics have. The reality for all traditional music is that it must evolve or become a museum piece. That includes evolving musically, and evolving in the way the music is exposed to the public. So, new technology must be embraced, as long as it treats the musicians and the songwriters, and their patrons (the labels and the song publishers) fairly.

Michael Frank: I do not know what trends will be happening, but I know that I will not be waiting for customers to find Earwig artists and recordings. I will also be looking to diversify the Earwig mail order catalog by adding CDs from other compatible labels. I will be much more proactive in direct marketing on a more frequent basis and in many more ways than previously. One trend I would like to see but do not expect, is that festival talent buyers become more proactive in booking acts from more sources than just a few well-known booking agencies. I expect that labels will want their artists to get up to speed in the use of social media for promotion, in collaboration with the labels.

Nikki O’Neill is a singer, songwriter and guitar player in Los Angeles. She fronts the Nikki O’Neill Band – a soul, r&b and rock band. She's included in Sue Foley’s upcoming book “Guitar Woman,” featuring a who’s-who list of great players like Bonnie Raitt, Ana Popovic, Me’shell Ndegeocello, Jennifer Batten, and more. www.nikkioneillband.com   www.myspace.com/nikkisguitarlessons

Online Class in Music Publicity: http://www.musictalksedu.net/content/nikki-oneill

Music Business articles: www.onlinerock.com  (the One-On-One section)