For every 10 films produced, 2 succeed.
From this data we assume that a film’s success stems from the perfect script, the perfect story, or perfect performance. The 2 out of 10 data sounds like a fair market for a scripted film but let’s work with that last one, a film produced from live performance.
We can imagine that a remake of a broadway show, or theatrical play’s success at the box office was anchored in its critical acclaim and built in audience. Meaning, since the word is already out maybe the studio would commit to a smaller marketing budget than a normal scripted film, thus giving it a green light. Takeaway: If a live audience loves it then others must see it on the big screen.
In music there is a downward trend on succeeding in the recording business. In the major industry circa 2010 an artist was successful 1 in 5x’s. Three years later, in 2013, the odds are worse than scripted films. It’s now somewhere between 1 in 5 & 1 in 10.
Michael Green of The Collective (who announced recently that the company would be shuttering its music-management division to focus entirely on the digital-video business) says “What we need to figure out is how to begin to better filter out the talent from the non talent…”
There are different formulas for filtering talent so that the cream rises to the top, here is ours.
The major music industry reinvests 15.6% of their revenue into researching the artist, and developing the repertoire, but that’s not enough if less than 20% of acts cut bait. Today marketing is the single most spend in an emerging artist’s deal and the live space is the least. From this we believe there has been more focus on process than substance. Of the 7500 record deals, what happens to the 80% that fail? Is anyone responsible for these losses? The IFPI does not delve into which artists missed the mark or how the record businesses lost money, but it does clump the costs of breaking an artist (marketing), with research & development. The record business extends the role of A&R through the entire album cycle, but we need to see a more detailed report on the separate functions of R&D and marketing.
A&R is the first step in the signing process and is a crucial first step to the 7500 major deals signed in an average year. Great A&R understand artists that focus on their live show have greater confidence and are comfortable performing in just about any setting. Those live stressors make us human and durable artists are more comfortable interacting with an audience. This vulnerability does not extend to the recording studio where the intended audience are paid to provide commentary and the stress is usually over some sort of machine malfunction. Why does this matter? Because in the near future artists will not be able to fake it virtually if they plan to have a career in the physical. “Live events…now account for more than half of total music activity spending each year.” @Nielsen
Marketing’s basic function is to get the word out explaining the benefits of a product, and we all want to experience a great product. We can imagine the company that packaged this facial cleanser would be happy marketing the benefits of their ergonomically shaped bottle. Cleans your face, reduces waste.
Marketing follows a green-lighted project and that green light should come only after a strong A&R investment. If we focus our efforts on great writing backed by great performances, the concert becomes its own marketing & promotional tool. Focusing the budget on the live space will not only make the artist’s career more sustainable, but will also help codify the 360 deal. @meganbuerger says “The tech lane with the most potential to impact the business is using tour-based “metadata…” and Mark Geiger claims “It will also save marketing teams money on promoting an artist in an unfamiliar area.”
A lot of businesses claim they foster a direct-to-fan marketing approach, but unless they have experience in the real transaction we should be skeptical. The worst thing about the music industry are those who take up space in the business, but don’t care much about it.
The live show remains the most direct scenario where fans engage with music and data is a tool that predicts the present, not the future. Measuring the data outside of the real transaction returns results not based on actual response. To paraphrase @jimhake “In business, if you don’t understand where the real transaction takes place, you don’t understand anything.”
On the occasion where a machine does capture a performance, it is still in A&R’s best interest to attend the show for themselves. “I have always thought it’s simply not possible to fully experience something and be documenting/broadcasting it at the same time.” Graham Dugoni
The most relevant data exists in the real transaction, and the future of music rests on those who understand this transaction. We’re long on performance.
“Ain’t Nothing Like The Real Thing”
Ashford & Simpson performed by Marvin & Tammi