We can all acknowledge that technology as a whole has transformed into so much more, but some focus on digital distribution and how it affects the role of artist manager is a must. “Instant gratification and limitless choice”, sounds like heaven doesn’t it? To a consumer it does, and they don’t have to permanently rest their eyes six feet under to experience this self-governing digital Shangri-La. “Millennials”, also known as generation Y, which are the digital guru’s and the consumers of our industry today. They competently navigate through cyberspace scouring for different ways to consume more and more information for free or at very low rates. Also, they can expertly handle computer devices that readily provide digital content for instant consumption and they are constantly looking for ways to personalize or customize their cravings for new products, including music. Distributing music to this type of digital consumer and making sure they buy the product once they see it is one of the most difficult questions an artist manager can answer today. Do our current forms of digital distribution help our artist succeed and fulfill the needs and wants of today’s consumer? How do we secure the business of this generation in order for our artists to flourish in this vast world of free accessible content?
In the past, traditional music distribution was tailored to a different generation with no access to digital music. In those times the only way to get free music was to steal it and believe it or not this is still illegal today, but much more socially accepted. From this we can see how the attitude of consumers has dramatically changed from an unimaginable concept to an expectation. Artist managers must understand that the dynamics between the artists, their music and their fans have not changed, but rather the shift is in the business model on how fans discover and access music. Music fans will continue to have and seek emotional ties to a song or artist giving the music industry a high demand for the music experience. How that experience is distributed and valuable to the artist is what the artist manager will have to figure out in order to provide revenue for their artists. A study done by Nettwerk Music Group reported that “The ways in which the music business will make money from this generation in the future will be with products that cannot be replicated - clearly, the live industry is already benefiting from that”.
Simply focusing on generating revenue from a digital distributor will not make for a profitable career. Focusing on revenue streams that are hard to replicate is a start to making sure the artist is getting paid and building a fan base in order to effectively distribute their music down the road. An example of an artist manager that is already taking this mentality is Scott Rodgers, a manager to Grammy Award winning indie band Arcade Fire. Last year, he was accused by music mogul, Steve Stoute to have played a role in lobbying for his band’s Grammy Award. This was exploited because Arcade Fire played over the ending credits of the show after they won their award. Stoute argued that the Recording Academy knew they would win, so this is why they were given the final slot in the show. Rodger’s final response in an e-mail sent back to Stoute regarding the accusations said: “Arcade Fire is now one of the biggest live acts in the world. It's not all about record sales. It's about making great records and it's about building a loyal fan base. The band makes great albums; they're not a radio driven singles band. On top of that, they own their own masters and copyrights and are in complete control of their own destiny. Things couldn't be better”. This kind of success shows that even though the digital distribution train is very popular there are some managers who see the bigger picture and are not taking traditional steps to develop their artists’ careers.
Digital distribution deals are a big part of contracts with new artists today, but according to Whitney Broussard music entertainment lawyer, "Given that it's not one of the biggest sources of income, even at the superstar level, it's not one of the most important issues". This type of mentality is allowing the artist manager to focus not so much on sales, but on branding and live performance. This is the reason for the current rise of the independent artist because the music industry is no longer driven by record sales. Likewise independent artists, established artists, as well as the legacy artists already know just how hard they must work on live performances in order to stay afloat in this industry today. Artist managers cannot rely on record sales from digital distributors as their focal point for revenue, but mainly as a promotional tool with some kickbacks. After all, how much in mechanical royalties can an artist get if the song is being sold at $1.29 on the front line?
As digital distribution continues to slip away many management companies have gotten creative and made deals with Live Nation in order to make up the difference in revenue through live performance. By some artists this is viewed in a negative way because they feel that their management should be defending their best interests and sticking up to the big record labels. “In 2011, Live Nation Entertainment and Universal Music Group's new management partnership invested an unprecedented amount of firepower in the concept of a management/label alliance. Under their joint-venture partnership, Live Nation's Front Line Management acquired a 50% stake in UMG's artist management companies, which include Trinifold, Twenty First Artists, 5B and Sanctuary”. The theory behind this is to have all the connections and advantages when it comes to live performance. Behind all the madness there is a method where digital distribution will for now play along with the idea of bundling. With bundling the consumer can get a digital album, backstage pass and other incentives through the purchase of a concert ticket exclusively through the providers’ website. This allows more revenue for ticket sales and digital distribution, but most important it allows the music labels to get closer to the end user.
Currently, in this new age of digital music distribution we see roughly two major forms of distribution: on-line subscription/ free streaming music and the pay-per-download model. Some experts say the future of digital distribution lies in the hands of the ISP companies through a subscription based model similar to cable television. This might sound like a good idea, but is the music industry factoring in the devaluation of music and the purchasing attitudes of on-line content by generation Y? How much can record companies and ISP’s charge for a monthly subscription when the consumer can get it for free? The risk of another independent automated music streaming service popping up in the market is always a possibility.
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