Manage for Success: Year-End Comments, Newsletter #103, December 2009


"Manage for Success" is a free monthly newsletter for record label executives who want to operate their companies efficiently and successfully. It's published by Keith Holzman of Solutions Unlimited, a management consultant, troubleshooter, and trusted advisor, and is based on his many years as a senior executive in the music industry.


Copyright 2009 by Keith Holzman, Solutions Unlimited. All rights reserved.


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As we approach the end of the year it's a good time to reflect on what's happened during the last twelve months, and perhaps project what may happen during the next few years for our industry.


The most ominous trend is the continuing decline in sales of CDs, a development that's prevailed since 2001 -- the last nine years! And although sales of paid downloads continue to improve, they haven't been sufficient, dollar-wise, to offset the loss of hard-good sales. Unfortunately, I don't see any improvement in sight.


What concerns me the most is that there are far fewer retail locations in which an interested consumer can buy CDs. The loss of Tower, and later Virgin, and the reduction of CD space at Borders and Barnes & Noble have resulted in far fewer locations where one can just walk in and buy music. Yes, there are such major-market locations as Wal-Mart and Best Buy, but these sell predominately "hit" product, and very little in the way of music from Indie labels.


Which leaves it pretty much up to consumers to buy what they want from such online suppliers as Amazon, probably now the largest seller of indie label CDs. And if a consumer wants certain music in an instant, they pretty much have to rely on Apple's iTunes, now, amazingly, the largest retailer of recorded music in the U.S.


Marketing has become exceedingly complex and expensive. I read an article the other day that said that all marketing now has to be done online. This is patently ridiculous, especially for music. Although online should be a significant portion of your effort, labels must still market through such traditional methods as publicity in magazines, newspapers, fanzines, etc. And let's not forget radio airplay when appropriate for the music. Then there are street teams and most especially, live performances.


We've also seen major changes in the online world, such as Apple's acquisition of LaLa at a fire-sales price, and MySpace's purchase of Imeem, all of which will have some impact -- as yet unknown -- on music marketing. Is Apple going to offer streaming music from the "cloud" free, or for a fee? Stay tuned.

On a positive note, radio stations that exist only online, or are counterparts of over-the-air affiliates, are having some effectiveness in getting indie music exposed to the public.


Indie labels must continue to work efficiently and effectively to make their music known to potential buyers, using whatever legal methods they can come up with -- both online and conventionally.


As one who for years felt that video was too expensive for indie labels to get involved in, I've definitely changed my mind. The availability over the last few years of inexpensive video cameras, both high definition and conventional, plus inexpensive software such as iMovie and Final Cut, have significantly reduced the cost of the making of videos. And with the emergence of such online platforms as YouTube, Hulu, and Vevo, there are more outlets for getting videos aired than ever before. And don't forget to post them, and other live performance videos, on your labels' and your artists' websites.


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As a matter of practice, I try to stay informed on all matters affecting our industry, especially as related to independent labels. So if you need advice on how to make your label successful, let me help you as I've helped so many others "manage for success." Email me (see below) so we can discuss how I can improve your business.


In addition, if you're considering creating your own label, I recommend my book "The Complete Guide To Starting A Record Company," The Second Edition can be ordered as a printed, spiral-bound volume, or as a downloadable eBook in PDF form. You can read the complete Table of Contents and download the Introduction at <http://www.recordcompanystartup.com/>. Updates are available online to all buyers.


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As for the future, I suggest you fully think through your short and long-range plans. If for some reason you don’t have any, then this is certainly the time to develop them. I've written about such planning in previous newsletters, and you might want to review them at this time.

For example, I made suggestions on useful ideas that might make the next year easier and more successful in an article "Year End Ideas Revisited."

http://www.holzmansolutions.com/articles/68-dec06.html


I've addressed the importance of financial planning many times, most recently with "More Planning Ahead."

http://www.holzmansolutions.com/articles/67-nov06.html


Ideas on how to survive and be profitable appeared in "Staying Alive."

http://www.holzmansolutions.com/articles/72-apr07.html


A few comments I made in a newsletter about fifteen months ago also remain valid.


The majors continue to chase their tails as they attempt to seize market share and sign numerous acts on whom they spend too much recording and marketing money. Meanwhile they moan about loss of CD sales and argue about who and what's at fault. And I don't think they'll be saved by their use of so-called 360 deals with their artists.


Smart independent labels continue to "stick to their last" and record and market music for customer bases that they've developed and nurtured over a period of years. Most are niche labels, but it's concentrating on such core audiences and music that have kept them healthy and modestly profitable.


To my way of thinking, it's been the labels that record such music, and market carefully to their core constituencies, that have made the indie sector a reasonably healthy one.


To conclude, I've decided not to make any predictions at this time for 2010, however I would like to take this opportunity to wish you and yours a very happy Holiday Season and best wishes for a healthy and prosperous New Year.


Until next month,

Keith Holzman -- Solutions Unlimited

Helping Record Labels Manage for Success.

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You may use or reprint the above article provided that you include complete copyright and attribution with a link to this web site. Please let me know when and where the material might appear. Most important, should you have a topic you'd like me to address in future newsletters, please email: mailto:keith@holzmansolutions.com


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Copyright 2009 by Keith Holzman, Solutions Unlimited. All rights reserved.