Off & On

 EDM is not defined as one single genre, style, or sound, but rather as a cultural movement. Its value comes by way of live/digital distribution and during the last eight years it’s blossomed into a movement for Millennial’s, but as of late we haven’t moved much.    EDM has been compared to the next RocknRoll movement, but so far it’s achieved only half its mission.  Millennials struggle to find jobs, have lots of college debt, and close to 30% of us still live at home.  Full disclosure, I’m an old Millennial, I turned 35 last month.

The world says we are stagnate, and the human body is an organic property, and to grow we need space, but today the space between rhythms & sounds are maxed, leaving the current EDM scene failing to motivate us further. “what is required is not a lot of words (sounds) but effectual ones.” Seneca

  The Generation X counterculture ravers of the 90’s should know the dangers embedded in Newton’s 3rd law of motion, which states “every action has an equal and opposite reaction”; concerning the most popular dance of “liquid”.   An individualistic style, it requires space to create the arm’s noodle-like effect; I’ve tried but can’t seem to grasp the technique. Millennial’s (me) also need space so we can move out of our parent’s house.  Interestingly enough  “house” music is very popular right now.

(Movement is motion and a lot of people have to be in motion to think clearly.  The “on” or  fouronthefloor  beats that were revived in 2007/2008 were introduced the same time that the Federal Reserve turned “on” their first round of quantitative easing. Coincidence, maybe. Pattern, definitely. )

The 2007/2008 brought a return of EDM (house, disco, the jig, fist pump, foot stomp,i.e. Mumford & Sons, Avicci/Aloe Blacc) Three years later (2011) the market tried to correct itself by awarding Dubstep artist @skrillex three Grammys,  but since this was ironically the 54th Grammy Awards, and ‘Studio 54′ focused on fouronthefloor dance music, the “off” beat was again repressed (we heard of nothing from the originators Rusko/Caspa). Everything that was Dub turned into Trap (to prop up the 20 year old classic genre of Hip-Hop).  In 2012 the “on” beat was (still) mainstream and a second round of stimulus was also turned “on”.   The “on” beat is important in rhythm, because we should always know where the “one” is.  It is also important in life because we should know ourselves before making commitments to others.

The Millennial’s EDM movement has legs & will be around for another 15-20 years, but are the brawls at festivals around the world pointing to fundamental errors regarding the state of the music economy?  (“When a system is too large it becomes more fragile.”  Nassim Taleb) Let’s imagine a festival of many thousands of people, the majority, male, ages 18-35, all crammed in the same space and all moving their arms. (someone is going to get hit) Probably the worst part about dancing with your arms (other than accidentally hitting someone) is that women don’t seem to find it attractive.  They don’t even consider it dancing.

dancing

~The above graphic is not to be rushed. The central part of the body is where growth starts.  People who put the emphasis on the brain first are missing that it is secondary for dancing (movement/growth ability). Plus, your mom was feeding you nutrients through the center (belly-button/umbilical cord) of your body, so, everything we are starts there, pimpin.~

Space is dark, and when we are in the dark (opacity), we should learn to trust our ears and not our eyes.  If men want to resume dancing with women they are going to need space to dance and the more danceable rhythm that allows for space stems from “off” or backbeat music (not the EDM stuff being thrown in our face)  An elliptical orbit consists of two bodies, one small & one large, and improvisational dancing is much better with a partner than going at it alone.  A sound wave has two parts (compression & rarefaction) and a rhythm can be defined as having two beats, one strong & one weak.   This two-part system is fundamental in understanding which rhythm motivates vs. agitates.   

(Technology can be described as doing more with less. Today we all have the ability to jump-start the recording process, but the goal isn’t to make more sound with more tools, but rather create more space with less sound. @joelbeckerman has been quoted as saying “The problem isn’t that there’s not enough sound. The problem is we are actually overrun by sound.” )

As Hip-Hop becomes the classic “off” beat form, a new backbeat rhythm must take its place and consumer choice can be very empowering.  Trap has had some time in mainstream sounds ,and fuzzy dub/synth gets a lot of play in live competitive sports.   A positive sign in the Pandora map shows audiences choosing “off” (chill) rhythms vs. “on”(forced) rhythms.  Today Dubstep is 20% more popular in the U.S. than its origins and a recent survey shows Drum & Bass (DnB) as the #1 genre.

  EDM is a revolutionary movement where we all feel free.  @BobDollNuveen says “I feel like 2015 will be the year where we will move from skepticism to optimism.”  I echo his sentiments.  The best part of EDM is that it promotes togetherness, unity, and an attitude of “we”.   The most popular songs are always sing-a-longs, but we can’t fall asleep during the change, we must be the change.

Just as RocknRoll motivated Baby Boomers to play instruments, Generation X has continued to show us that we can create. The stimulus of the last 7 years is a policy that relies on us (Millennials) to create new value, and today the Fed has turned “off” their bond buying program.  The only way to correct a bubble is to think for yourself.  So it is up to us to do something unexpected, something that leaves us space to think.  If we love freedom & we love one another we will continue to write and sing about it, but for this change to happen the “on” beat has to capitulate to the “off” beat.

Here we take a few moments to thank some of the founders, Rusko and his counterpart Sonny, for continuing their commitment to motivate our culture with “off” beat rhythms.  These backbeat grooves instruct us to swing our hips, not our arms.  (See: loco-motion)

Investors looking for sustainable businesses should expect the change to come from creative roles.

 “Some people need to write or speak, in order to know what they are thinking.” @thomasbeller   ~Thanks to Lucas for requesting I post something in my own words.   

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Engineers & Producers

Roughly 15 years ago, when music started shifting to digital, things started to change in all areas of music.  In distribution we lost audio quality, in production, music producers and engineers began using the same software.  Digital ideas produced with digital technology, it was inside this structure where EDM got its boost. This computing power afforded a producer the ability to engineer his/her own sound. And the engineer, who was great at adjusting sound with electronics, the ability to make his/her own music.  The greatest thing about this new technology is it made recording budgets feasible and do-it-yourself projects possible.

It is a fact that artists are recording more on the road, and this is a great thing for music fans.  Direct-to-fan, the stage has forever been the place where artists perform. Away from the fan, the studio has forever been the place where artists retreat to record.  The studio brings isolation.  This isolation cuts one off from the kind of knowledge on which life depends. “Retreat into isolation and one loses all contact with the sources of power.” -Robert Greene   In a world where we are distanced by technology, human interaction will continue to be craved. The live show is interactive and so is the new market for music.  That is, studio recordings have experimented with all sorts of production effects, and auto-tune is a great piece of technology, but it’s not the human voice.

It’s obvious everything is becoming digital, and touring is the major revenue stream, but I do not think that means humans will start paying for concerts sung by Siri. If the recording market is shrinking and live performance growing, that means the shift in music will begin to benefit top performers.  The EDM genre is doing great right now, but if you do not believe it is in a bubble then your idea of live performance metrics need some updating.   These performance evaluations are not taught by Universities, they are only quantifiable at the live show.  Live was never meant to be a playback of a recording. The live show is based around a playlist of hit songs or singles.

Some recording artists have a hard time translating live, and many signed acts turn out to be lackluster performers.  Is this because everyone is trying to deduce a hit from a youtube recording?  The average music fan spends roughly $46 per year on recorded music.  Compare that to the average ticket price and swelling number of concerts/festivals.  Labels of the past have not been interested in live metrics because the focus was on recorded sales, but today the live show is the major revenue stream.  With 360 deals cutting in to the artist’s all encompassing career, a label of the future will not be able to take a percentage from where they do not first invest.

The digitalization of music will continue to divide the role (17:17–17:45) of the engineer and producer.  In such a way that an engineer will be rewarded for his/her ability to navigate the ever growing software products for music and the producer rewarded for his/her ability to harness live performance metrics, and translate them to the interactive, direct-to-fan market.  

The future of music is live, don’t let anyone tell you different.   If it is not live, it’s a rerun.  

Blackberry & The Music Industry

Blackberry & the Music Industry are flat-lined.  Coincidence?  You betcha.

In 1999-2000 the Blackberry arrived,

berry1999

so did Napster.

napster

Everyone at a label use to have a Blackberry and most of the music industry used peer-to-peer or email devices.  Blackberry first offered a mobile email pager, then a phone.  Napster offered a way to access recorded music with an internet connection, and both of these companies connected peer-to-peer or group.  One was adopted by the music industry and the other sued.

Smart-phones are amazing platforms for interaction and their ability to connect one to many, allow for reply, groups and instant messaging are unprecedented. Blackberry’s service did wonders inside music’s corporate environment and until recently has been the preferred choice of the U.S. Government. We must not forget the keyboard is in heavy used inside computer science and journalism. In the beginning Blackberry helped to fuel the music industry and some say it also hindered traditional office interaction, but the same could be said for IBM

The editorial and production processes will have a huge role going forward, as they will begin to help curate the best content in a word-wide platform.  Interactive platforms are meant for interactive performers.  The revenue stream is no longer recording, it’s show value.

 If the music industry and Blackberry would have thought about including their consumers so many years ago, we wouldn’t be where we are today and Apple would not have surfaced the same.

 To artists and musical savants alike, and so this does not happen again, we should encourage the obvious, Spotify and Twitter to start talking soon. One platform that offers music and contact with the artist is going to be the place to go.  It’s not hard to interact with your customers, just ask performance artists.

Pandora & Spotify

The media talks a lot about these companies and their un-profitability.  Here we will attempt to break down why they are not profitable, explain how they are completely different services, and show which one resembles the new music model.

Why Pandora hasn’t turned a profit in 10 years is scary.  Their service is good, everyone uses it, actually 25% of America uses it.  Yep somewhere around 75 million users are Pandora listeners, or about 1 in 4 Americans.

This is great number for advertisers because they drive 70% of Pandora’s revenue, but just like terrestrial radio they are a passive listening service, or non-interactive.

Where these companies are the same: Right now they are both unable to turn a profit.

payoutspns

The reason they are unable to profit is because the licenses for digital far exceed the licenses needed for terrestrial.  Pandora and Spotify payout 55%-75% of their revenue to the labels in the form of licenses or as they like to say royalties.

Labels and Digital providers (DSPs) have non-disclosure agreements so artists are forced to take whatever is offered with zero transparency as to why.  Imagine if FM radio paid out 70% of their advertising revenue back to the label.

Where they differ– Some say these companies are battling one another  vs

but it is NOT true.  They aren’t even in the same business.

spotify-vs-pandora

It all looks very simple given their revenue models.  Spotify has subscriptions driving their service and Pandora has advertisers. Spotify offers an ad-based product with their version of @SpotifyFreemium, but where they win is the interactive service is where music listeners generate most of the action. This approach alone says that the new music model will thrive here.  Listeners activate the music and advertisers follow it.

In an interactive platform like Spotify, the direct-to-fan transaction gives the service momentum.  The fact that they are only 5 years old with more subscribers than Pandora (a 10 year old company) shows that people pay up when they have a choice in the matter.  The engagement that all internet radio services are trying to achieve can only be found inside the interactive platform.

I’ve had Pandora since 2006 and have long since created the maximum 100 stations.   So to get new music inside Pandora I have to get rid of some?  What listener wants to do this?  Pandora believes they will win on the ‘engagement’ front, but in reality their service is a subjugated listen to the passive audience which accepts their pick of music.  This sounds a lot like the radio broadcasting model.  In no way, shape or form will the 20% Superfan be convinced to give up their listening habits to a service which does not allow them to choose.

Spotify hasn’t turned a profit either but my bet is on them.  The interactive or on-demand service allows the listener, the fan, the user to have an active say in what they hear.  Never before has this been so meaningful to the music industry.

UPDATE: Three years later Spotify is even heavier in bed with the labels. They are not poised to break NEW sounds with this model.