music business journal october 2010 issue

8/8/2019 Music Business Journal October 2010 Issue

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Music Business JournalVolume 6, Issue 1 5th Anniversary Issue October 2010

Berklee College o Music

The Publisher as a Record Label

Inside This Issue

Mission Statement

The Music Business Journal, published

at the Berklee College of Music, is a stu-

dent publication that serves as a forum for

intellectual discussion and research into the

various aspects of the music business. The

goal is to inform and educate aspiring music

professionals, connect them with the indus-

try, and raise the academic level and interest

inside and outside the Berklee Community.

(ContinuedonPage3)

At the start of the summer of 2010,the release of the self-titled debut album fromOklahoma rockers, Taddy Porter, signied alandmark shift in the music industry. Whilesales were low and chart time only lasted aweek (peaking at 24), the bands debut still mer-its signicance as one of the rst major releasesto be recorded, developed, and managed by amusic publisher.

As cost -cutting major labels continuesending departments to the chopping block,publishing com-panies are be-ginning to pickup the slack byopening shopin areas outsidetheir traditionalbusiness. Pri-mary Wave, inparticular, hasbecome a pio-neer among a

new breed ofpublishers. It isone of the larg-est independentmusic publishersin the world, andhas climbed toits rank in a rela-tively short time.Founded in April2006 by a formerVirgin Records executive, Larry Mestel, thecompany has established its reputation control-ling the rights to the catalogs of, among others,Kurt Cobain/Nirvana, Steven Tyler/Aerosmith,

Daryl Hall & John Oates, Founding Membersof Chicago, Steve Earle, and Bo Diddley. Pri-mary Wave also retains co-publishing dealswith artists like The Airborne Toxic Event, Sav-ing Abel, and Blue October.

Over the past few years, with thepublishing business clearly booming, PrimaryWave began noticing that changes in the indus-try were opening doors in areas outside of theirmtier. With record labels pinching pennieslike it were the Great Depression, the qualityof their service had been signicantly reduced,

leaving artists without proper tour support,promotion, and, in some cases, management.[Artists and managers are] looking for a lotmore from their publishers nowadays, saidPrimary Wave Music Publishing partner/GMJustin Shukat in an interview with Billboard.They want more than synchronization andwriter collaboration opportunities. They areexpecting a marketing plan and brand market-ing.

With this in mind, the company de-cided to try itsluck in ArtistManagement,forming itsUrban Man-agement Divi-sion in June2009. Two ofthe industryselite talentnders, RickSmith of Wild

Justice andScott Frazierof OvertoneMusic Group,were broughton to head thenew depart-ment. Rickand Frazier arean exception-ally talented

management team with a unique passion andcommitment to their artists, said CEO LarryMestel. By leveraging our relationshipswith key players in the music, television, mo-

tion picture and advertising industries, Prima-ry Wave will be able to add signicant valueto the artists signed to the new joint venture.So far, the Smith and Frazier duo has alreadysigned ve new artists to its roster includingSaving Abel, Croweld, Abby Owens, Rook-ie of the Year, and of course, Primary Wavesnewly-released Taddy Porter.

For Taddy Porter, the timing couldnot have been better. The ink had hardly driedon their Urban Management contract beforePrimary Wave announced the grand opening

By Evan Kramer

Gail Zappa

Page 4

Spotify & RDIOPage 6

Back to the Future

Page 8

Lawmakers in Brazil

Page 10

Catering to the Home Studio

Page 12


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Table of Contents

Business Articles

Primary Wave.........................................1

Spotify & RDIO.....................................6

Apples Ping...........................................7The Future of Online Music...................8

Touring..................................................11

Law Section

Copyright in Brazil................................10

Interviews

Gail Zappa...............................................4

Jim Odom...............................................12

MBJ Editorial

Mission Statement...................................1

Editors Note...........................................2

Upcoming Topics...................................16

Sponsorship

Berklee Media....................................... 15

Editors Note

Volume 6, Issue 1 Music Business Journal

This rst release of fall semester, 2010 marks the beginning of a very big year for the Music Busi-ness Journal. Its our fth anniversary, and with thirty-eight issues and over four hundred articles ofcontent, the MBJ is growing faster than ever. Our team is larger and more diverse than its ever been,and our commitment to delivering quality material is at an all time high.

In the beginning of next month, on November 9th, the Music Business Journal will be hosting its

rst sponsored event ever to celebrate ve vibrant years, and to honor those that have helped make theJournal a reality. If you are able, come join us at 7 Haviland St. in Boston, from 6-8pm, as we kickoff the new school year--or visit our facebook page for updates and pictures of the event!

In the meantime, this latest issue is sure to capture your attention. Most excitingly, and courtesyof long-time contributor Michael King (BerkleeMusic), the MBJ has been granted the right to pub-lish an exclusive interview with Gail Zappa (wife of Frank Zappa). Mrs. Zappa spares no detail indescribing her role as the sole owner of the Frank Zappa catalogue and her plans for its future--a mustread for anyone interested in the possibility of hearing some previously unreleased Zappa tracks.

It seems that online cloud-based music libraries are the wave of the future for consumers. NickSusi provides us with a very informative report on both RDIO and Spotify, and Spotifys attemptsto seize the American market. Alternatively, Jamie Anderson shares, an up-to-date (quite literally)piece on Spotifys largest competitor, iTunes Ping. Both articles point to possible directions of digitalmusics future.

Media futurist, Gerd Leonhard has graced us with an original piece entitled, The Price of Free,which examines the inevitable gains that spawn from distributing music for free. Leonhard discussesthe concept of Freemium, and explains his view that revenues are beginning to lose their directrelationship with actual music, forcing prot sources to be generated elsewhere.

The summer touring season ended falling noticeably short; Kerry Fee has provided us with aninformative follow-up report. Luiz Silva, a Brazilian lawyer/ Berklee student, has contributed a rareinsiders view to new copyright laws in Brazil. Hunt Hearin was able to sit down with Jim Odom,co-founder/ CEO of home-recording equipment pioneer, PreSonus. Odom shares company historyas well as his aspirations for the future. Lastly, Ive contributed a piece on independent publisher,Primary Wave, and their innovative new model that is reshaping the publishing industry.

It gives me great pleasure to introduce this rst issue of the MBJs 5th year. My hope is that youwill nd it both interesting and informative. Be sure to visit us at www.thembj.org and check us out

on facebook as well.

Thanks so much for reading,

Evan Krammer

Contributors

Editors Note.....................................................................................................................................................................Evan Kramer

Business Articles.................................................................................................................Jamie Anderson, Kerry Fee, Evan Kramer

Business Articles (cont)................................................................................................................................Nick Susi, Gerd Leonhard

Law Section...................................................................................................................................Luis Augusto Buff de Souza e Silva

Interviews....................................................................................................................................................Hunt Hearin, Michael King

Staff.................................................................................Moana Avveneti, Witt Godden, Ben Hong, Trish Hosein, Gabriella Howard

Staff (cont)........................................................................................Dean Millser, Silvina Moreno, Dahyun Ed Seong, Mia Verdoorn

2 www.thembj.org October 2010

Management

Editor-in-Chief ................................................................................................................................................................ .Evan Kramer

Content Editor.........................................................................................................................................................................Nick Susi

Webmaster..................................................................................................................................................................Itay Shahar Rahat

Faculty Advisor and Finance.....................................................................................................................................Dr. Peter Alhadeff

Layout Editor..................................................................................................................................................................Lau Meng WaiMarketing Manager........ ................................................................................................................................................. Minden Jones


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Music Business Journal Volume 6, Issue 1

Business Articles

campaign to secure corporate sponsorshipsto help ease the nancial load for their art-ists on tour. Being on the road is an inte-gral part of a bands success, said DevinLasker, Partner/Chief Imagination Ofcerfor Primary Wave. Unfortunately, touringis an expensive proposition, so we createdthis program to alleviate that burden. Re-cently, on August 26th, an agreement wassigned with Motel 6 that offered six weeksof free lodging to bands touring under theRock Yourself to Sleep banner. So far, thepartnership has been an enormous success,having helped subsidize the tours of StephenKellogg & The Sixers, Hit The Lights andSparks The Rescue. We are really gratefulto Primary Wave and Motel 6 for choosing usto be a part of [this tour] said Alex Roy, leadsinger for Sparks The Rescue. We are goingto rock hard and sleep well!

With hands in almost every pot ofthe industry, Primary Wave appears to beourishing, and has potentially found a qual-itative business model for the future. We arenow a full-service entertainment shop look-ing for opportunities in all parts of the busi-ness, says Justin Shukat. But from an aerialview, one cant help but be reminded of Ma-jor Labels extortive use of 360 record dealsdesigned to extract revenues from all fac-ets of an artists career. And under this light,

the Primary Wave model looks suspiciouslysimilar, only they actually do own the rightsto everything.

The problem is that it is actuallymore dangerous for the artist, because a pub-lisher would legally control an artists entirecareer, starting of course, with the assign-ment of the copyright. Such concentrationof power may pose a serious threat to mu-sical talent, and would arguably continue todeepen the industry divide that is so apparentin the existing business. While Primary Wavewas founded on the ideals of supporting art-ists and promoting great music, and it has

done nothing but that so far, the point mustbe made. Nevertheless, such innovations alsohave enormous potential to advance an art-ists career.

of its Label division in the earlier part of thisyear. Also called Primary Wave, the labelperforms all of the functions that one wouldexpect. It signs new artists, develops talent,and produces records. For physical distribu-tion, a deal was signed with EMI in March2010. GM and Sr. VP for EMI Label Servic-es, Dominic Pandiscia, speaks aboutthe deal: Primary Wave is a great partner forEMI Label Services, because weve both de-veloped a different approach to the businessin response to the changing needs of artistsand third party labels today.

Primary Wave is not the only pub-lisher to have ventured into record label ter-ritories. London-based publisher, NottingHill, recently launched an independent label,Transmission Recordings, last October. Thenew operation has already signed R&B/ Hip-hop artists like The King Blues, Bodyrox,Ezcapade, Rhythms Del Mundo, and Lil J.Bug Music, another independent publishingheavyweight, has also jumped on the band-wagon, signing a deal with the Kings of Leonimprint label and 429 records in June 2010.The label plans to debut with the release ofnew music by The Features. Other publish-ers, such as Peermusic and Sony/ATV, havealso entered similar co-production agree-ments.

Mastering the Recording Rights

The interesting thing about thistrend is that ownership of a label grants a pub-lisher exclusive rights to master recordings.This opens the oodgates for all sorts of newrevenue streams and promotional opportuni-ties. Take for example, the ability to controlboth sides of a synchronization agreementthe publishing and the master rights. Peer-music, a well-known independent publisher,suggests that total ownership is the nextstep in the evolving music business. Ameri-can Regional President, Kathy Spanberger,explains: We used to be able to develop new

talent without owning master rights, but thesedays, because Internet marketing and lm,TV and advertising promotion is such an im-portant part of development, we need to ownor administer the masters as well in order toexpand the development opportunities andease the licensing issues.

As Primary Waves Record Labeland Urban Management divisions were beingdeveloped, efforts to internalize tour planningand concert promotion were simultaneouslyin the works. Standing in the face of a harshindie touring industry, the company began a

The Publisher as a Record Label (cont.)

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Interview

By Mike King


in Freak Out. So I felt that for the people, forwhom the music exists, and they are going tosupport it early in, you can have your nameand your credit on this too because you de-serve it! It wasnt anything to do, really, withbeing interactive on the site.

MK: I know that you area selling a fewdigital releases of Franks music off of yourown site, and that there is very little avail-able on iTunes. Is that because you feelstrongly about the packaging? Can youtalk a little bit about why a lot of Franksmusic isnt on third-party digital sites?

GZ: Ok, this is a very big answer to whatseems to be a pretty straightforward ques-tion. First of all, what the studio audiencedoesnt know and whats behind the curtain,is that there is a lawsuit where certain partiesare claiming many rights, digital rights be-ing among them. I can tell you, absolutely,that it was never Frank Zappas intention thatanyone would control the digital rights of hismusic other than his heirs, so its not anythinghe ever told me to sell. The fact of the mat-

ter is he published a paper on how musicwould be delivered in the future in 1983and copyrighted it and just bemoaned thefact that he didnt have the budget to hireprogrammers to make that happen. So hewas way out there and he certainly knew.Although the term digital rights, at thetime of his death and the time of the sale,didnt exist, that doesnt mean that hewasnt thinking about them and planningahead for what would best serve the val-ue of the copyrights that remained withme. So he was thinking about his fam-

ily at the time and he wanted to protectthose rights. Thats part A. Part B is thatI am not a fan of iTunes. I am not a fanof their growth through their overbear-ing means by which they have a reducedvalue of music. First, they taught every-one how to steal it and then they said,Oops, sorry heres how you can pay for itreally cheap! So you know, Im not a fanof that and Im not a fan of price-xing,which is something they do. You donthave a lot of choice in what you can offerand how you can offer it. I mean they justhave rules and I understand that it is prob-ably just a by-product of some of their

programming issues but there should beother choices. I believe that the future isthat there will be other choices and theywill be on every artists own fan site or aconglomerate consortium of artists fansites thats not controlled by an outsideparty that does not respect artists rights.The part C of this answer, is that up un-til fairly recently and even still today, thesounds are massively compressed, theyare not the way the artist intended them tobe presented to an audience for an audio-phile experience. So there was a reasonfor me to engage in that. Now I dont careso much about Beat the Boots on iTunes

because thats not a recording made byFrank Zappa. Those are bootlegs as op-posed to counterfeits.

MK: I know that the releases you areselling off of Zappa.com are at a higherbit rate. Can you envision down theline that you would be releasing someof Franks catalog at lossless quality offof Zappa.com?

GZ: Yes

Gail Zappa was married to the leg-endary composer Frank Zappa for more than25 years. She is the mother of Moon, Dweezil,Ahmet and Diva Zappa; her own father wasa rocket scientist. Since Frank Zappas deathin 1993, Gail Zappa has overseen the releaseof his recordings, including many previouslyunavailable works, under the Zappa FamilyTrust. For more information see www.zappa.com.

Mike King, a frequent collaboratorofThe Music Business Journal, interviewedGail Zappa, who asked that questions andanswers be printed in The MBJ verbatim. Wehave agreed to make an exception to our usu-al editorial prerogative. Because of the inter-views length, however, we could not print itin full, and were given permission to selectour own questions and answers. The readercan nd the full text at www.thembj.org.

Zappas Releases

MK: You released The Making of FreakOut: An Frank Zappa Audio Documen-tary (MOFO Project/Object) in 2006, andput in the names of anyone who pre-or-

dered the record into the liner notes of therelease. I talk a lot about the importanceof artists personalizing packages for theirfans for direct sales off of their web site, asit helps to build the artist/fan connection.Was that part of the idea with MOFO?How did you come up with it in the rstplace?

GZ: We had actually done that as an experi-ment, when we put out our rst concert re-lease. I wasnt sure how the audience wouldrespond and it was FZ:OZ and we put every-bodys name on that, who ordered it in ad-vance, because I wasnt sure if we were going

to be able to make it happen. So the pre-ordersgave us an opportunity to see that we couldactually manufacture the way we wanted to. Ihave always felt very strongly about the pack-aging; I always have. That started with Frank,so even in the face of economic disaster in theindustry and digital downloads, I still believein the physical package. So we had alreadydone that, but the main inspiration for addingpeoples names into MOFO, the special edi-tion, was because Frank had listed the namesof people who helped to inuence that music,

Creativity, Copyright, and the New Marketplace:

An Interview With Gail Zappa

(ContinuedonPage5)




Interviewsomebody interpret Franks music becausein many cases its no different than identitytheft or character assassination. When peoplejust take it into their own hands and arrangeit without getting permission and do terriblethings to it that were never intended - because

for them its easier to play that way. So I feelthat I have a really strong contract with FrankZappa to get that music out there the way thathe intended it and thats the other part of howthe releases work.

But, getting back to the disappointing aspect.For me it is that there are all these people thatworked under Franks baton and not one ofthem does covers. You know, you would thinkthat somebody would think itd be a greatidea to do a cover version. Id love to licenseFranks music but its just so inappropriate tolicense classics in so many ways because theywere never written or intended for, especially

not those performances, they were never in-tended for commercial exploitation. If peopledid covers though, I could certainly considerlicensing those if they were something that Ithought was sincere and represented the intentof the composer.

MK: Could you give me an example ofsomething that you would be interested inlicensing?

GZ: Well, for example, I get a billion requestsfor Willy the Pimp, but there is no way thatI am going to let that go out there unless I hadsome other version because I dont think that it

is right to exploit Franks particular statementand that actual recording. I mean a lot of theserecords were made back in the day, wherethese studios themselves were instruments inthe hands of the composer and thats no lon-ger true. Everybody works out of a box nowthat you plug in. Back in the day, the studiowas one of the actual instruments and control-ling what you could do in a studio gave youas many opportunities in terms of the soundsthat you could get as any other instrument. Soa studio in the hands of a skilled composer is awhole other animal.

Artists and Copyrights

MK: I read an interview you did where youhad this great quote, my job is to makesure that Frank Zappa has the last word interms of anybodys idea of who he is and hisactual last word is his music. What doesthat mean in terms of your opinion of copy-right as it relates to Frank Zappa?

GZ: Well, I think that every person who cre-ates anything in the realm of intellectual prop-erty is protected under the Constitution of the

United States of America, because thatswhat copyright law is. I didnt invent it.Im not the bad (or good) guy that saidthis is how its supposed to go. Theresa reason for copyrights to exist becausethey actually are proof and a working ver-

sion of the ideas of those people, at thistime and this place and I like that idea.The more freedom there is to expressthese ideas, the better off we all are andthats the reason why I also love and en-joy the Bill of Rights. However, when youconsider the means by which other peopleare trying to take copyright law and try totake it apart at the seams, theyre doingit by misinformation. Its disinformationbasically. If you want to start a war andpretend that somebody took the rst shot,you use disinformation as weve seen inthe past, to make that happen. This is waragainst artist rights and I think that it is not

a very good idea, in this day and age, tointroduce any kind of arts programming,in terms of educational programs, with-out introducing also the means by whichyou protect your rights. Its no differentthan a signature at the end of the day. Itslike this, if somebody is a Muslim or aChristian, do they have the right to makeyou be one by voting by majority vote?No, thats clearly not the American wayand its the same with copyrights. If youwant to give your music away for free,that doesnt mean you get to join a groupthats going to take apart everyone elsesrights just because thats what you be-

lieve. You have a choice. Go ahead. Giveit away. If you think that thats the bestway to market your music, by never be-ing able to earn a living from doing that,great. Join that fabulous club and enjoy.

MZ: Any other thoughts on the state ofthe music industry, and ideas on how tomove ahead as an artist?

GZ: Mostly, the business of music thesedays is a popularity contest and its theability of some performer, primarily, tocapture the attention of an audience andexpand on that. I think as a musician/

composer, you cant look at that as com-petition. I mean this industry was boundto implode on itself because its like anyother. Once the distributors are more fa-mous than any artists they distribute,youve got a problem because theres a lotof money going in to support that struc-ture that shouldnt be in their pockets.You know, its like if an agency is morefamous that the actors it represents, in thepublics mind, you can see how thats aproblem. Well thats what happened to

MK: How are you working to exposenew listeners to Franks music? If a lot ofFranks catalog is unavailable digitally, andphysical retail is cutting back with their in-ventory, what other ways are you workingto expose potential fans to Franks music?

GZ: In an ideal situation, I would be able tohave more participation in the original catalogthan I do right now, and that may yet happenin the next few months. If it does, then youwill see a very big change. For me, any kindof release that we get out there helps to selleverything. I mean, people think Ive planned,perhaps with Dweezil, how to do this andDweezil has certainly contributed to introduc-ing music to a younger audience, for the mostpart, so that already exists. I get letters frompeople that are fourteen or under all the timethat are interested in the music. The problemis, is that you are ghting a huge battle. Its

great that Dweezil is out there performingthe music because the saddest part is that hecomes closest to having produced the bandthat I think Frank wouldve actually hiredhimself, including Dweezil on stunt guitar.That would have been ideal, but theres noth-ing else out there that touches that band, interms of Dweezils intention with respect towhat he is trying to accomplish with musi-cians of that caliber.

The Music

MK: I saw them two years back in Bostonwith Steve Vai and they were just great

GZ: Yeah, but that was back when everyonebelieved that you had to have former mem-bers of the band. With all due respect, youknow, we love Steve Vai - but heres a disap-pointment that I have to say fairly regularly,and that is that Franks agenda was to educatebecause when you educate the audience, yougive them the opportunity to experience awide variety of musical entertainment. NowI cant do that as well as Frank because Imnot in a band. I mean, on stage, he would in-troduce Stravinsky, Varse, and Bartok, youknow, all sorts of composers and lots of R&Bmusic that he loved when he was a kid and

he went out of his way to make sure peopleheard those sounds and heard that music. Itwasnt so important from them to know whothe composer was until he did interviews;you dont have to announce it on stage be-cause then people dont really pay attention.The fact is that their ears are being trained;I cant do the ear training that Frank did butI can constantly reinforce the idea that thereis a basis; there is a history behind all of thisstuff. Its based in intention; the composersintent is everything. So you cant just have

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Music streaming certainly seems tobe a formidable combatant against illegal lesharing and P2P users. Recently, the cloud-based streaming service Spotify has been inthe news frequently. Created by Daniel Ek,Spotify was only available in the UnitedKingdom, Sweden, Norway, Finland, Franceand Spain when it was rst launched, but hassuccessfully spread to the Netherlands andcontinues its attempt to break into the Ger-man, Chinese, and American markets.

Spotifys business model operatesthrough subscription fees and advertisement

investors. The company generates revenuethrough multiple price tiers, which include:

Free streaming for twenty hours per monthwith advertisements Free unlimited streaming with advertise-ments, but only with a special invitation code 4.99 euro per month for unlimited streamingwithout advertisements 9.99 euro per month for a premium service,which includes no advertisements, mobileapplications, and ofine usage

In regards to the premium service,Spotify has mobile applications available for

iPhone, iTouch, and Android, which conve-niently thrust users music playlists straightto their ngertips. In ofine mode, premiumsubscribers have the opportunity to sync upto 3,333 tracks to their computers hard drive,which are then accessible even when discon-nected from the Internet. With premium fea-tures such as these, Spotify clearly strives fora expedient and versatile listening experi-ence.

Spotifys interface resembles thatof iTunes, and it is incredibly user-friendlyfor making playlists and searching for art-ists/songs. Users can also upload the music

from their iTunes library or hard drive to thestreaming cloud. With social networking be-ing arguably the most prevalent contempo-rary phenomenon, Spotify cleverly incorpo-rates Facebook and Twitter features. Userscan connect with their Facebook friends andTwitter followers on a live feed, sharing thelatest music updates and suggested artists andtracks. Users of Spotify have quite an active-ly involved experience.

As far as quantifying Spotifys suc-cess is concerned, the information provided

by the company is limited. In April 2009,Spotify announced its one-millionth user,and claimed to accrue 40,000 new users perday. By the end of 2009, the company grewto over 6 million users, with 50,000 newcom-ers joining the service every day. Annualrevenue exceeded a staggering 10 millioneuro ($14.1 million). As 2010 commenced,Spotify revealed that it had roughly 250,000actual paying subscribers. By the end of thespring of 2010, Spotify increased its paid sub-scribers to over 320,000, with over 7 millionusers.

So what competition would Spotifyface in the United States? Internet streamingservices such as Grooveshark, Napster, andMOG pose threats. Grooveshark offers ad-vertisement-free streaming for $3 per month.In addition, Napster provides unlimited musicstreaming for $5 per month. Finally, MOGproffers music streaming along with mobileapplications for $15 per month. After con-version rates, most of these business modelsare cheaper for the consumer than Spotifys,but lack many of its features--most notablythe ofine service options.

Regardless of Spotifys competi-

tion in the United States, the company stillaims to tap into the American market. Forover a year, the company has fought to suc-cessfully extend its services but has continu-ously hit brick walls when negotiating licens-ing deals with labels. Spotify is without adoubt a very popular service in its operatingcountries, but the company continues to nddifculty monetizing their product. Becauseof this detrimental factor, the US speculatesthat the business model is not protableenough. Moreover, to use Spotify, whetheron a computer or a phone, one must down-load an application, rather than stream musicon the website itself. This limits Spotifys

expansion into other territories beyond com-puters and phones, such as in automobiles,televisions, gaming systems, and DVR units.

On that note, however, Spotify didrecently sign a deal with TeliaSonera, a tele-vision service in Sweden and Finland. Withinthose two countries, premium subscribers areable to stream music from their television setsin their living room. Spotify also recentlydeveloped a homepage takeover ad thatstretches across the entire computer screen,in an attempt to sway free users to upgrade

Down The Stream: Spotify and RDIOBy Nick Susi

to an advertisement-free subscription. Thusfar, on an international scale, Spotify has beensuccessful in bestowing avid listeners with alarge selection of readily available music.

In lieu of Spotifys inability to en-ter the US, a promising new music streamingservice, RDIO, has entered the music industry.Founded by Janus Friis and Niklas Zannstrom,creators of Kazaa and Skype, RDIO is nowavailable to the public in the United States andCanada as of August 2010.

Operating on a very similar model,

RDIOs price tiers include:

Free trial period for 3 days, then the usermust upgrade $5 per month for unlimited streaming on theInternet $10 per month for both online streaming andmobile applications (on iPhone, Blackberry,and Android)

The music-streaming site providesusers with a user-friendly interface for mak-ing playlists and searching for artists/songs.RDIO scans the computers iTunes libraryand makes suggestions to the user based on

their musical preferences. Moreover, it hassocial networking features, in which users canreview and share music with their friends. Allthings considered, a casual observer mightbegin to notice some distinct similarities be-tween RDIO and Spotifys features. AlthoughRDIO does not seem to bring anything entire-ly new to the table, perhaps the company willperfect the features already provided by othermusic streaming sites.

Since RDIO has only been in exis-tence for about a month, the company has notyet provided the public with numbers regard-ing its user/subscriber count or monetary prof-

it. RDIO has signed agreements with the BigFour major labels, as well as the IndependentThe Orchard, Ingrooves, Finetunes, and Iris.Online Distribution Alliance, The Orchard,Ingrooves, Finetunes, and Iris. However, thegrand opening might have been a bit hasty inthat, negotiations with independent music la-bel, Merlin (Arcade Fire, Vampire Weekend,et cetera), had not been completely nalized.This action led to a some-what turbulent weblaunch with Merlin accusing RDIO of notunderstanding or respecting what consumersreally want. As it appears in all cloud-based

Business Articles



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Business Articles


Editors Note: We are pleased to publish thispiece, which is used with permission. It was published by the Journal of the Royal So-ciety for the Encouragement of Arts, Manu-factures and Commerce, London, in August2009. Gerd Leonhard, a distinguished me-dia speaker and musician explains why freecontent can still pay in the long term. Formore information on Leonhard, see www.mediafuturist.com. The views of the authorare not necessarily those of The MBJeditorial staff.

Free information, free music,free content and free media have been

the promises of the internet (r)evolu-tion since the humble beginnings of theWorld Wide Web and the Netscape IPOon 9 August 1995. What started out asthe cumbersome sharing of simple text,grainy images and seriously compressedMP3s via online bulletin boards hasnow spread out to every single segmentof the content industry and even intomeatspace (real-life) services such ascar rentals. Without a doubt, free hasbecome the default expectation of theyoung web-empowered digital nativesand now the older generations are jump-ing in too.

On top of the already disrup-tive force of the good old computer-based Web1.0 we are witnessing a glob-al shift to mobile internet a WWW thatis, nally, so easy to use that even mygrandmother can do it. While ve yearsago, we needed a real computer tetheredto a bunch of wires to port ourselves to thisother place called online and partake inglobal content swapping, now we just need asimple smart phone and a basic data connec-tion. With a single click of a button, were inbusiness or rather, in freeloading mode.

As users, we love free; as cre-ators, many of us have come to hate the verythought. When access is de facto ownership,how can we still sell copies of our creations?Will we be stuck playing gigs while our mu-sic circles the globe on social networks, orblogging (now: tweeting) our heart out with-out even a hint of real money coming ourway?

Daunting as it may seem, we can

no longer stick with the pillars of Content1.0,such as the so-called xed mechanical ratethat US music publishers are currently gettingper copy of a song ($0.091). Nobody knowswhat really denesa copy any longer when the webs equivalentof a copy (the on-demand play of that song ondigital networks) may be occurring hundredsof millions of times per day. No advertiser,no ISP and not even Google has this kind of

money to pay the composer (or rather, thepublisher), at least not until the advertisersstart bringing at least 3050 per cent of theirglobal US$1 trillion marketing and advertis-ing budgets to the table.

Traditional expectations and pre-

internet licensing agreements are exactlywhat are holding up YouTubes deals with themusic rights organisations such as PRS andGEMA: this is what the rights organisationsused to get paid for the music that is beingcopied, and this is what they want to get paidnow. This impasse is causing signicant fric-tion in our media industries worldwide. Yet,below the topline issue of money, there lurksan even more signicant paradigm shift: theexcruciating switch from a centralised systemof domination and control to a new ecosystem

By Gerd Leonhard

based on open and collaborative models. Thisis the shift from monopolies and cartels to in-terconnected platforms where partnership andrevenue sharing are standard procedures. Inmost countries, copyright law gives creatorscomplete and unfettered control to say yes orno to the use of their work. Rights-holdershave been able to rule the ecosystem and, ac-cordingly, my way or the highway has beenthe quintessential operating paradigm of most

large content companies for the past 50years.

Enter the Internet: now the high-way has become the road of choice for

95 percent of the population, the attitudeof increasing the price by playing hard toget is rendered utterly fruitless. Like it ornot, a refusal to give permission for ourcontent to be legally used because we justdont like the terms (or the entity askingfor a licence) will just be treated as dam-age on the digital networks, and the traf-c will simply route around it. The inter-net and its millions of clever prosumers,inventors and armies of collaborators willnd a way to use our creations, anyway.Yes, we can sue Napster, Kazaa or ThePirateBay and we can whack ever moremoles as we go along. We can pay hun-dreds of millions of dollars to our lawyersand industry lobbyists but none of thiswill help us to monetise what we create.

The solution is not a clever legalmove, and its not a technical trick (wit-ness the disastrous use and now total de-

mise of Digital Rights Management in digitalmusic). The solution is in the creation of newbusiness models and the adoption of a neweconomic logic that works for everyone; alogic that is based on collaboration, on co-engagement and on, dare we mention it, mu-tual trust an ecosystem not an egosystem.

Once we accept this, we can start to discoverthe tremendous possibilities that a networkedcontent economy can bring to us.

Much has been written on the persistent trendtowards free content on the net. It is crucialthat we distinguish between the differentterms so that we can develop new revenuemodels around all of them. Free means no-body gets paid in hard currency content isgiven away in return for other considerations,such as a larger audience, viral marketing

The Price Of Freedom: Reinventing the Online Economy



velocity or increased word of mouth (ormouse). I may be receiving payment in theform of attention, but that isnt going to bevery useful when its time to paymy rent orbuy dinner for my kids. Free is... well, un-

paid, in real-life terms.

Feels-like-free, on the otherhand, means that real money is being gen-erated for the creators while their content isbeing consumed but the user considers itfree. The payment may be made (ie spon-sored or facilitated) by a third party (such asGoogles recently launched free music of-fering in China, Top100.cn); it may be bun-dled (such as in Nokias innovative ComesWith Music offering, which bundles themusic fee into the actual handsets) or thepayment may be part of an existing social,technological or cultural infrastructure(such as cable TV or European broadcast li-cence fees) and therefore absorbed withoutmuch further thought. Feels-like-free couldtherefore be understood as a smart way tore-package what people will pay for, so thatthe pain of parting with their money is re-moved or somewhat lessened everyonepays, somehow, but the consumption itselffeels like a good deal.

Freemium is a word concoctedby VC Fred Wilson and Jarid Lukin, andpopularised by Wired magazines Chris An-derson. Freemium combines free and pre-mium business models into new forms thatbasically follow the old marketing principleof giving away something for free only toup-sell many of those happy users to thenext, paid levels. The Freemium approachhas been very successfully used by manyWeb2.0 companies such as the broadbandvideo, call and messaging service, Skype(get hooked on free calls and then buy Sky-pe-out credits or local calling plans) and theinternets leading photo sharing site, Flickr(spend $29.99 for a bit more storage spaceand the cool FlickrPro badge). The bottomline is that all digital content (includingbooks) is moving from paid hardcopies to

free, feels-like-free or freemium servicesand bundled access and there is seriousmoney in all of these options.

And while we creators struggle tocome to terms with the challenges of free,lets not forget that, in those good old daysof paid copies, people mostly paid for theprinting or pressing costs, the shipping ordelivery, and the retail storage space. Con-sumers did not actually pay very much forthe song, for the words, or for the genius of


Business Articles

the scriptwriter; they mostly paid for the mid-dlemen, the studios, the publishers, distributorsand retailers. Therefore, when these costs aretaken out as they are in many internet-baseddelivery mechanisms it may not necessarilyhurt the actual creator, but those middlemenand the industries built around them. How-ever, because free is such a strong meme inthis economy, I believe that we will see a lot ofredirected creative juices ow into that crucialconversion process from the initial attraction tothe faithful consumption of and engagementwith our content. Now, the mission of recordlabels, managers and publishers is to invent and

realise new streams of income that simply didnot exist until we ceased our obsession withcontrolling distribution and selling copies. Itherefore believe that the value of a given pieceof content will depend greatly on what Wiredsinspirational co-founder Kevin Kelly calls theNew Generatives those new embodiments ofvalue.

The new means of content monetisa-tion include elements such as:

packaging and alternate outputting for ex-ample, selling a smart-phone application thatprovides access to all an artists music, videos

and pictures, instead of just selling a simpledownload of a song

immediacy the option of getting the newsong, the new book or lm right away, withouthaving to wait

curation and ltering. The added value of hav-ing someone programme my playlists or recom-mend TV shows or lms

or added values such as higher denition (in-

cluding 3D) or better sound or image quality.

Personalisation, customisation andvarious premium-like options will make veryfruitful turf for up-selling, and are alreadywidely used across the web, such as by theblogging service Typepad. We may well seea future where the basic services are entirelyfree, or bundled, or advertising supported. Inthe music industry, we have recently seen ser-vices such as Spotify emerge with a similaroffering: the user can listen to any song on-demand for free, but can also pay to get ridof the audio advertisements or make use of

better playlisting tools. My hunch is that, be-cause of the increasing wealth of the availabledata and the much improved use of behav-ioural targeting functionalities, advertisingwill soon become valuable content itself thus eliminating consumers desire to get ridof it altogether.

Again, if a global advertising andmarketing budget of US$1 trillion can bepartly diverted to pay for content, that shouldmake a lot of content creators very happy.Virtual goods products that are only soldand used in virtual environments (such ascustomisable avatars for my prole page)

are already big business and will grow togenerate new revenue streams for all kinds ofcontent creators.

As an example, my avatar in mydigital world may want to surround himselfwith the latest John Mayer track when heshanging out at the virtual beach theresanother euro for the creators. Similar to thepopular ringback tones in Asia, this is a typi-cal case of how I am using music to presentmyself in a different way; rather than for my

(ContinuedonPage14)


10/1610 www.thembj.org October 2010


Law Section

Last year, Brazil was rated theeleventh top country in recorded music sales.It was responsible for a signicant rise inoverall music sales, a claim that few coun-tries, if any, can make. In addition, it is oneof the fastest and largest growing emergingmarkets, classed under the BRICI umbrellaof outstanding performers (Brazil, Russia,India, China, and Indonesia). It is the mostpopulated country in Latin America, and inthis regard dwarfs Mexico, its nearest rival.The future looks bright for Brazil, who willalso host the FIFA World Cup in 2014 andthe Olympics in 2016.

Recently, Brazil conducted apublic consultation about a bill to reformthe actual copyright law proposed by theMinistry of Culture (MOC). The Ministryis working on a nal report that should besent to the new president elect on October 31for analysis. The major role of the bill is tostrengthen and balance authors rights, alongwith a constitutional guarantee of free accessto culture. In addition, the bill promises tomake concession to modern forms of distri-bution.

The current copyright collectionand distribution system in Brazil is quite dif-ferent from that of the US and other coun-tries. It is administered by a central organiza-tion, the Escritrio Central de Arrecadao eDistribuio (ECAD), which is responsiblefor collecting all royalties from performing,mechanical and neighboring rights and thendistributing the proceeds to the relevant au-thor societies. Those societies then distributethe royalties to their members. In the lastcouple of years the ECAD has shown a lackof transparency in the distribution of collec-tions, leading the Legislative Assembly of

Sao Paulo to open an inquiry. The investiga-tion has revealed wrongdoings far beyondECADs legal and statutory rights.

To correct this, the reform of thecopyright law aims to create the InstitutoBrasileiro de Direito Autoral (IBDA)--an or-ganization controlled by the MOC that over-sees the administration of copyright in Braziland provides arbitration. Many entities havecriticized that idea, claiming that it wouldbe public interference in what is a strictlyprivate commercial matter. In a recent pressconference, the Brazilian Minister of Culture,Juca Ferreira, explained that this organizationwould be created to serve as an intermediarybetween artists, the collecti societies, and allother parties by helping them litigate conictand provide administrative support. The state-ment was meant to demystify the idea that thenew IBDA would nationalize the collectionof copyrights, which will continue in privatehands. It is important to mention that all thetop 20 music agency market and develop newartists. I fmarkets already have an equiva-lent administrative structure to manage theircopyright collections.

In order to give authors greatercontrol of their work, the new text of thecopyright law claries the licensing concept,allowing the exploitation and usage of the in-tellectual work without a total transmissionof the rights. The publishing contracts will nolonger be able to contain clauses alluding toa (voluntary) cession of rights. The proposalalso foresees the revision and cancellation ofunfair or abusive contracts.

The concept of fair use will be in-corporated in the law, guaranteeing the rightof free access to culture and allowing the use

of intellectual work for educational and di-dactical purposes. In the Academy, the needfor authorization and prior payment wouldnot be necessary since it does not involveeconomic exploitation of the activity. Afterthe public consultation, however, it was ne-cessity to revisit this statute, so that authorswere better protected from the misuse of fairuse.

The new law will also allow some-one that owns an album to make copies ofit for private use without the need of autho-rization. That guaranties the interoperabilityof digital les. Therefore, to own a CD and

transfer its music to an iPod will now be le-gal. In addition to that, depleted works couldbe reproduced without the need of authoriza-tion for non-commercial purposes.However, the rising of broadband servicesand mobile subscriptions increases the worryabout illegal le sharing. This is a problemthat affects almost all countries and it hasbeen difcult to nd a satisfactory solutionin the new bill. A lobbyist group, the Interna-tional Intellectual Property Alliance (IIPA),has criticized its le sharing and piracy pro-visions. The nal text will likely addresssuch misgivings. Moreover, at its nal hear-ing the MOC attested that it would work to

improve the concept of interactive access inconjunction with better distribution provi-sions, thereby allowing the development ofnew business models for the Internet.

Another important change pro-posed regarding the music market is thecriminalization of payola. To avoid unfaircompetition, the act of articially forcing theplaying of songs through payment or favorswill be considered a violation of the eco-nomic order and the right of free access toculture.

An intractable amount of legal is-

sues clutter the music business today all overthe world. The bottom line is that all theinterests of the music stakeholders must betaken into account and, to some extent, bal-anced. The questions raised in Brazil overthe modernization of its existing copyrightlaw could well be the new template used byyounger nations as they adjust to shifts in thedissemination of content.

Sources

[1] http://www.cultura.gov.br/consultadireitoautoral

Music & Copyright, Issue 414, Informa UK Ltd.

[2]http://www.gpopai.usp.br/blogs/files/2010/08/brazil-

ian_copyright_bill_consolidated_june_2010.pdf

A Far Reaching Copyright Change in BrazilBy Luis Augusto Buff de Souza e Silva



consistently across the board year after year,

regardless of circumstance. Paul McCartneyand Lady Gaga have proved to be recession-proof, but typically acts are competing witheach other; established acts, like Justin Bieber,

James Taylor, and Carole King, have the ad-vantage.

Music festivals compete too for thesame business. Fans can examine festival line-ups, and can spend all their music money on

one ticket to see a number of their favoriteacts over a weekend. This year alone, C3sLollapalooza smashed its attendance record

with a whopping 240,000 people. Festivalswork a great deal with bands, fans and spon-sors, generating enormous publicity as well as

revenue.

All things considered, some sources

are pointing out to a shortage of new blood

within the live music world. This year, Sugar-land emerged as the only new rst-time head-liner (not surprisingly, the tour was not well

attended). Promoters now seem to be addingmore international artists to their rosters, hop-ing to create a new wave. In the grand scheme

of things, it is evident that there is a huge dis-connect between what music is popular rightnow, and what can be seen live.

Changes were implemented to try

and compensate for low attendances. LiveNation, the biggest concert promoter in thecountry, discussed new ways of handling their

artists. CEO Michael Rapino stated that thecompany would be negotiating lower guar-antees for existing talent on their roster. This,

fused with other measures, would help LiveNation get better results and sign up more art-ists. Overall, and according to Rapino, there is

a supply problem with talent, and tour dates,given their limited market appeal, are now fartoo expensive.

Lowering ticket prices is also part of

the discussion. Live Nation offered discountson tickets as low as ten dollarsand with noservice fees; the company had been toying

with such deals for years, anticipating that theancillary revenues from parking, merchandise,food and other areas would offset the potential

losses of weaker shows. Ticketing reductions,however, can be a double-edged sword. Kevin

In an industry believed to be re-

cession proof, live music has indeed seenan overall dip in sales throughout the primesummer touring season. There are of course,quite a few explanations for the downturn,i.e the economy, ticket prices, reductions indates, and the overall cancellation of tours.Regardless, the main goal for promoters,ticket sellers, artists, and managers is to ndwhat model works best for them in the cur-rent environment.

Some believe that the touring in-dustry is now beginning to feel the crunchthat the rest of the music business has beenin for the last few years. The slow pace ofthe economy, coupled with summer festi-vals and an oversaturated live music market,has turned its prime season upside down.In a tight economy, concertgoers are cau-tious about how they spend their disposableincome. Were asking an awful lot of thepublic, said Pollstar editor in chief GaryBongiovanni. [For] the acts that are really indemand today, fans are opening their walletsand buying tickets, and theyre buying thepremium seats, too. But in a down economicmarket, it just means you arent going to dothe kind of volume that you might expect andpeople are more selective.

After the summer came to an end,it was reported that the gross revenue for theTop 100 tours in North America was down17 percent from last year. Some of the mostanticipated tours were no-shows. ChristinaAguilera and Limp Bizkit announced tourdates and promptly cancelled them, as theylikely could not deliver on the guaranteesrequired by the large arenas and amphithe-aters. The shock of the summer came withU2, which, following last summers 360Tour, was poised to be a record-grosser.Emergency back surgery for a front man is,nevertheless, a rare event, and U2s cancel-

lation seemed reasonable. However, no suchfactor played into the sporadic deletions oftour dates by The Jonas Brothers, LillithFair, Rihanna, American Idols Live, TheEagles, Kings of Leon, and Rascal Flatts.

It must be duly noted that even dur-ing the downturn, there were a few tours thatmanaged good numbers. Although no ofcialrecords of attendance have been released atthe time of writing, it is apparent that Jim-my Buffett, Brooks & Dunn, Tom Petty andToby Keith were at a sellout or near-selloutlevel. A handful of acts have been able to sell


Business Articles

Live Music in the US: A Cold Summer Squall

Kevin Lyman, who spearheaded The

Warped Tour, says that they bring (sic)fools gold. In times of recession, who isto say that ancillary revenues will be up tosnuff, with the off-the chart prices of food,drink and merchandise? He continues:We are going to train the public to wait forthe discount; people will wait to buy theirtickets until the last minute. Lyman sug-gests going for a fair price at the beginningthat people can be comfortable with. Al-though some fans will always pay premiumprice to go and see their favorite acts, a dif-ferent overall approach seems to be neededto drive the business forward. Tiered or dy-namic pricing will still be around for long,but prices may have to come down overall.In the short run, discounts are unlikely tolead to packed houses.

Still, for Pollstars Gary Bon-giovanni, this summer was nothing morethan business as usual in an industry thatsusually volatile. Indeed, it might be diffi-cult to make any predictions about the livemusic industry at a time of crisis, and morenormal times may have to set in for changeto be considered in earnest.

[1] Branch, Alfred Jr. Live Nation Moves To Pay Artists

Less To Tour In 2011. TicketNews. http://www.ticket-

news.com/news/Live-Nation-moves-to-pay-artists-less-

to-tour-next-year091017689. 09/17/2010.

[2] Peoples, Glenn. Live Nation Pushing Back On Artist

Guarantees. Billboard. http://www.billboard.biz/bbbiz/

content_display/industry/e3ia497cf655575dc8301f2e-

59a7e03dc81. 09/20/2010.

[3] Mervis, Scott. Summer Concerts Highs and Woes:

Amid the cancellations and sluggish sales, the 2010

season had its up sides. Pittsburgh Post-Gazette. http://

www.post-gazette.com/pg/10259/1087708-388.stm.

09/16/2010.

[4] Talbott, Chris. Sour Note: Economy Hits Summer

Tours. AP Entertainment Writer. http://www.msnbc.

msn.com/id/38043219/. 07/1/2010.

[5] Live Nation On Track To Meet Reduced Outlook

Associated Press. Billboard. http://www.billboard.biz/

bbbiz/content_display/industry/e3ie4f24b85cbd4c811d-

32939040b61ef30. 09/17/2010.

By Kerry Fee


12/16


Interview


Jim Odom is a co-founder andCEO of PreSonus Audio Electronics, a Louisiana-based designer and manufac-turer of digital audio equipment. Since thecompanys inception in 1995, PreSonus hasbeen a leading pioneer in the home studiomovement and is responsible for many ofthe standard products used in the industrytoday. Adhering to the PreSonus ideal, formusicians, by musicians, the company hasexperienced exponential growth, designingaffordable equipment for recording and livesound without sacricing quality. Over thesummer, The MBJ had the chance to talkwith Jim about his company and its role inthe changing recording industry.

MBJ: Tell us a little bit about your back-ground

JO: I started playing music around BatonRouge in the mid seventies. I started play-ing guitar at about 10 years old I got goodpretty quickly, it was kind of natural for me.By the time I was about 12 or 13 my momwas dropping me off at gigs around town.By the time I was about 15 or 16 I starteddoing session work around Baton Rouge.

There used to be something called profes-sional studios everywhere there was aplace called Miscellaneous Records, and alot of jingle studios making radio commer-cialsso there was work doing that.

MBJ: You toured with the band, LeRoux,playing guitar for a while. How did thisexperience affect you as a musician?

JO: In 1981, after a few semesters at Berk-lee [College of Music], I left and joined aband from Baton Rouge called LouisianaLeRoux, who was signed to RCA records.I recorded and toured with them for a few

years until 1984 when I went back to Berk-lee for one last semester.

The experience was a whole lot differentthan what I had at Berklee. I went fromplaying in a local scene around Boston to awhole different world. You end up loosing alittle bit of your creativity when you go intosomething like that. We did a record, wenton tour, it was fun; I met a lot of people,played on a lot of big stages. It was my rsttaste of $300,000 dollar recording budgets.Wed spend a month living in the recording

studio recording and thats where you reallyget your chops up.

We were recording down in Bogalusa, LA atStudio in the Country Warren Dewey didthe engineering. We mixed at Studio B inCapitol Records out in Los Angeles. That ex-perience really kicked my career, in terms ofbusiness, into gear.

We were working with Budd Carr he man-aged Kansas and us (LeRoux) at the time, sohe kind of helped me get a career path to-gether.

MBJ: Were you developing any engineer-ing chops?

JO: Absolutely I guess my last year in highschool my dad had an old barn I took it andrenovated the upstairs. I was about 17 or 18.It was just a practice room at rst but thenI bought a Tascam 80-8 analog recorder. Weput that and a small console up there and iso-lated everything and just started recording.The rates to record in town were ridiculous,so we just built our own. We let that studiorun 24/7 - it was free if you brought your own

tape. People were in and out all the time wemet a lot of people doing that. It helped meget my chops up.

MBJ: When did you rst become interest-ed in designing/building gear?

JO: Speaking of studio in the country - afterLeRoux fell apart in about 1985, the membersmoved all over the place. I was helping Generebuild the room we installed the Neve con-sole. Him and I spent months doing that.

I was playing guitar, mixing, and engineer-ing and doing a lot of stuff. I would run

into issues and there wouldnt be a piece ofgear to x. Back then, one of the things wewould run into was synchronizing multiplemachines we had Linn drum machines,Ensoniq sequencing machines none of itwould sync up. One of the things I did wasdesign a box to sync all these different signalstogether. Out of frustration, more than any-thing, I went back to LSU and got a degreein Electrical Engineering and Computer En-gineering because I wanted to design my ownproduct for the studio environment. That was

By Hunt Hearinborn out of I cant get anybody to do this forme so Ill do it myself and my eagerness forchops. Thats kind of how I got involved inElectronics and Electronic Design

MBJ: Where did you start PreSonus? Didyou have much help?

JO: I was always doing a lot of recordingand working in studios, but between collegeand starting PreSonus I was designing SonarEquipment working with underwater imag-ing and acoustics. After doing that for fouror ve years it was really all that I could take.

I had started on a project - I was mixing ona lot of old consoles that didnt have a lot ofautomation and it was a little frustrating, so Idesigned a product to insert into every chan-nel of these analog boards called the DCP8that gave you automation, compression andgating on every channel. Same thing weused to have on the Neve and SSL boardsbut we could use them on the older, cheaperconsoles. You could take the sequencer andautomate your whole session to bring up later.

MBJ: The DCP8 was truly a groundbreak-

ing product in that it brought previouslyunavailable functionality to the consumerlevel. Tell us a bit about how this productset the tone for PreSonus and its future de-velopments.

JO: We created the DCP8 in 1995, but hon-estly we havent gone too far away from that.Now were making products for live sound,which incorporate some of the same functions automation, recall, and now the incorpora-tion of digital recording. Our new console,called the StudioLive, allows you to do allof those things plus recording live, plus per-forming with tracks. All of our developments

have spawned from that.

Then we got into interfaces. In about 1999we started working with FireWire products We released a product called the Fire Stationin 2001 and followed that up with the FirePodshortly after.

MBJ: PreSonus is known for creating pow-erful tools for the musician at an afford-able price. Was this always your vision forPreSonus?

Synching Tools For MusiciansAn Interview with Jim Odom of PreSonus Audio

(ContinuedonPage13)




Interviewgreat record, but we cant afford a lot of stuff.This was really true in the mid 90s. Therewas a huge gap between the two that gaphas closed a lot, you can make good record-ings now with pretty inexpensive stuff. Butwe wanted to empower the musicians that

was our goal.

MBJ: My rst recording inter-face was a PreSonus FireBox alot of other musicians can saythe same. What impact do youfeel that you and your productshave had on the home recordistand the bedroom studio trend?

JO: We were certainly part of it PreSonus and M-Audio were therst two companies on the marketoffering rewire products. Thereason that we liked rewire wasbecause of the ability to get highchannel counts at the time, as wellas the ability to power the devicethrough the rewire cable. Thismade our interfaces extremelyportable and very simple to use.

Our vision has always been togive you an affordable productthat sounds as good as some of thereally expensive consoles I used touse if our product can get youa solid recording and prevent youfrom having to rent an 1000 dol-

lar/day room, were done.

MBJ: A lot of musicians are see-ing the ease and value of record-ing themselves. How has thistrend affected your business?

JO: It has been tremendous wehave this saying that the recordbusiness is over, but the musicbusiness is just beginning andthat has to do with a shift in control. Insteadof being controlled by the industry, the indus-try is now controlled by the people. There is

an amazing amount of talent that can be foundon the Internet now.

Were very excited about some cloud-basedtechnology weve been working on. Oursoftware, StudioOne, now works with Sound-Cloud and were working on some collabora-tion software so that musicians from all overthe planet can easily work together on thesame project without a whole bunch of work.

MBJ: It seems like more and more famousstudios are closing their doors these days.Some attribute this to the explosion of af-

fordable technology available to musicians

on a budget. Do you feel as though com-

panies like yours have been vilied and/or

blamed for this?

JO: Not at all. It still takes, in my opinion, aroom and an engineer and a producer to pro-

duce certain records at a certain level. Surethere are some talented musicians who have

the chops to do it at home, but there still are a

lot of artists that need help. A lot of the artistsyou hear on the radio still

need a producer and an engineer they needsomeone to keep them on track and on budget

in order to get their record released.

The record industry really just lost its foot-

ing maybe it was overspending. They justwerent properly managing their businesses.There was a lot of excess going on too much

prot was being taken off of artists, there wasa lot of excess spending going on.

walked in with the DCP8 to the NAMMshow in Los Angeles. For our first show wehad a little 10 x 10 booth where we put theproduct out, had some cool graphics doneup. As it turns out we got a spot in the top10 products of the show by Craig Anderton.

They were open to innovation of a really bigkind. I think its still that way where you

run into problems today is with dis-tribution. Distributors arent reallykeen on taking big chances likethey used to be, especially withnew products. What Ive foundover the years is that brand is re-ally your most valuable asset. Youcan create hype like crazy over theInternet with all of the newly avail-able avenues, but to go all the waythrough that to the basic consumer(the musician in his bedroom) isvery difficult. It takes time and alot of hard work.

MBJ: As a businessperson, howdoes your training and experi-ence as a professional musiciancome into play during your dayto day?

JO: I think it had a lot to do withit I often tell people that beinga musician is the ultimate entre-preneurial event. Even as early ashigh school, if youre going to bea musician, you have to be a good

entrepreneur. You have to create aproduct and advertise it. You haveto sell and promote your product.You have to take care of issues andhandle problems, deal with peopleand listen to feedback. You have tohandle employees and pay people it is basically no different. By thetime you want to start a business,having done all of that for five orten years, you have a good idea ofhow to handle yourself. Being a

professional musician was wonderful train-ing for the business world.

MBJ: What advice would you give tosomeone interested in creating/marketinghis or her own music equipment?

JO: Fortune favors the bold even if youdont have the most breakthrough or inno-vative concept, youve just got to show up.You have to put it out there. You learn morefrom the response you get then by all theschooling and studying in the world. Youlearn more from the feedback than you everwill in a classroom.


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MBJ

Some of the topics we will tackle in

next months issue of the Music Business

Journal:

VEVO & Google TV

RightsFlow & Music

Licensing

Mergers in the Products

Industry

The Music Business Journal will be released

three times in the Fall, three times in the Spring,

and once in the Summer.

Formoreinfo, please contactany core

memberof theeditorial board.Thejournals

e-mail address is [email protected]. Also,

ourwebsiteiswww.thembj.org,wherewehave

notonlyourcurrentissue(aswellasallback

issues)available,butalso,muchmore.

Volume 6, Issue 1 October 2010www.thembj.org

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