Manage for Success: Atoms and Bits, Newsletter #87, July 2008


"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 2008 by Keith Holzman, Solutions Unlimited. All rights reserved.


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Atoms and Bits, or Bits Without Atoms?


The "digerati" among you will note the above reference to Nicholas Negroponte's thesis in his provocative 1996 book, "Being Digital," Negroponte refers to bits as the binary ones and zeros of computers, and by extension, all the software, websites, and most meaningful to us, the digital information stored on the web, and various downloadable music files. Atoms, on the other hand, are the tangible items one can actually hold, such as books, CDs and LPs.


For most of us it's not a question of bits or atoms, but bits with or without atoms?


Just about every artist and label is releasing music in some digital form these days. That’s a no-brainer, and I see no reason not to release any new project digitally -- as bits. There's lots of upside and no discernable downside.


But many clients are asking themselves if they also need to release in one of the traditional physical formats such as CD or LP -- in other words, as atoms.


Such a decision has to be based on the many disparate aspects of a business and will be different in each instance. It all depends on an artist's or label's circumstances.


Why wouldn't one want to release a CD? Well first there are all the costs -- designing the packaging, plus the printing of tray cards, booklets or folders or other special packaging such as Digipaks, the pressing of CDs, the assembling of all the materials, and finally the expense of shrink-wrapping. It also means the necessity of keeping track of inventories and accounts receivable.


Next there's the matter of attracting the attention of a distributor willing and able to get a reasonable quantity of CDs into the marketplace. Most established distributors -- even those that specialize in indie labels -- won't take on a new account unless they can be guaranteed about a million dollars worth of business. That's a lot of money and an unlikely circumstance, particularly to a new and unestablished artist or label.


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Need advice on how to profitably run your label, or are you suffering from too much work and day-to-day problems that you no longer have perspective on your label?


Let me help you as I've helped so many other labels "manage for success." Email me at <mailto:keith@holzmansolutions.com> so we can discuss how I can improve your business.


Or should you be thinking of starting your own label, I suggest you get my book "The Complete Guide To Starting A Record Company" which can be ordered as a downloadable eBook in PDF form, or as a printed, spiral-bound volume. Download the Introduction and read the complete Table of Contents at <http://www.recordcompanystartup.com/>.


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So if you're an unknown or a start-up, you may have to consider going it alone. And that's not an easy task. It means that that you'll have to make deals directly with retailers willing to stock your music, plus you'll also be on the hook for the costs of manufacturing and shipping, not to mention returns.


Yet I've known of artists and labels who've started out on their own in a small way, but with lots of drive, stamina, and stick-to-itiveness, found themselves eventually succeeding. A substantial part of such a winning formula is that you be extremely proactive.


This means that if you're a musician serious about your music and your career, or if you're committed to the eventual success of your label, you must see that your artists are constantly performing in front of audiences, thereby building fans and a constituency. Such artists are also not ashamed to sell CDs, T-shirts, and other related paraphernalia at all their performances, and it can become a substantial part of their income.


You've also got to make lots of sales calls to accounts. In addition -- and this applies also to those who only release digitally -- you'll have to work all possible avenues of publicity -- be it local newspapers, fanzines, or national magazines and syndicated news programs. You must also try to get your music played on as many appropriate radio stations as possible. Then there's the matter of trying to get your music used on televisions shows, feature films, and even commercials. This may be the hardest task of all, but it can mean the quickest way of getting your music known, and paid for!


And don't neglect your website which is a great way to sell digital downloads, CDs, and other merchandise.


It's my opinion that releasing physical product -- a CD -- legitimizes a release and means you're serious about your music. It makes it "official" and shows you're committed. But, just as important, it will also sound better than any compressed form of download such as an MP3.


And what was that about the old-fashioned LP mentioned earlier? According to an article in the July 3rd issue of Digital Music News, sales of vinyl (LPs) surged 77 percent in the first half of this year to over 800,000 units. That's not exactly "chopped liver" where I come from. LPs are of particular value to audiophiles, so if your music warrants the additional processes and costs, it might be worth considering. But I suggest you wait to make such a decision until your music starts to sufficiently catch hold that there seems to be a market developing for it.


Therefore I recommend, in most circumstances, both bits and atoms.


Until next month,

Keith Holzman -- Solutions Unlimited

Helping Record Labels Manage for Success.

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Copyright 2008 by Keith Holzman, Solutions Unlimited. All rights reserved.