Category Archives: Guest blog

Guest post: Jaddan Comerford, Australian

As we have seen over and over again, it is really hard for a band to make money, especially on tour. Overhead costs are ridiculous. But, let’s assume an artist invests the time, and the money, and begins to do well here in the States. They’ve likely accrued a lot of debt and touring becomes their primary source of income. So the artist starts their year with a tour of the major markets. Then maybe over summer they do a big festival tour. Then in the Fall they go out and tour again, this time in a position to command large guarantees from the promoter. In a period of nine months they’ve played the same market three times – and they’re only halfway through their record cycle!

There’s a lot of bands out there. Getting kids to pay money to see an artist perform once is hard enough. Three times a year is stretching it. The money is good so bands repeat the cycle, and then face consumer fatigue the following year. They go from playing to thousands of kids to hundreds. The bubble bursts, the excitement that fed the hype falls away, and everyone is on to something else. It’s probably the #1 mistake I see in the touring world.

Personally, once my bands establish a foothold in America, I try to only let them tour the States twice on an album cycle – one in the beginning and one at the end. The rest of the time, I send my band overseas. It is very expensive. As a manager, it is difficult to approach your artist – who is finally seeing a little bit of money – and ask them to re-invest that money into plane tickets to go play small clubs overseas. But if you start early enough the returns can dwarf anything you can make in America.

I met Jaddan on my couch. He pronounced things funny and added an extra ‘u’ to every other word. My roommate, Eric Tobin, had invited him to sleep over on one of his first trips from Australia. I think Jaddan was barely 22 or 23 and had just started to see some success with his indie record label and had begun doing management. Now Jaddan pretty much runs Australia.

Jaddan doesn’t sleep on my couch any more, but I had the privilege of catching him in town last week. Since Australia is so squirreled away in the corner of the world, I asked him to send me his thoughts on the international perspective of a touring artist. His notes are below.

Mining or the music business? 

While having lunch the other day in Silverlake, with my good friend mike, he asked me if I’d be interested in writing a post for his blog. It was a fun lunch, where we both realized that we’d recently done things to upset the other, without thinking about it. So we called it even, ordered the same meal (he paid) and went on to talk about our cats.

Eventually, of course, we got back to business and more specifically the music business. Well we started on other business – mining to be exact – which was quite funny but probably not appropriate for this post.

Mike asked me to write something about Australia, so I guess Im best to speak from experience, as I am from Australia, where I have quite a successful group of businesses doing touring, management, merchandising, publishing, marketing, label.. and a few other things. In a lot of ways, Australia is the land of opportunities. We are a very entrepreneurial nation but at times, we can be a little relaxed and kind of wait for others to do things. My company obviously didn’t wait, and we seized the moment. I started the label right after finishing high school and after no one wanted to manage our bands, we started managing them ourselves. Then we started doing their merch. Then one of the majors saw how we were doing street marketing, and hired us to market their bands. You see where this is going….

So over a period of 10 years, we went from me releasing records in my parent’s house in my underwear, to a company with over 50 full time staff, 3 offices and what is hopefully unlimited potential.

Now the issue plaguing me at the moment, is, is the above enough? The answer is OF COURSE NOT! So the logical next step is to look overseas. Australia is the 6th biggest music market in the world, which is a huge achievement for a country of 25 million, but 6 isnt big enough for me. So like most Australians we look abroad. England, Germany, Japan and of course, the United States of America is the jewel in the crown. The one that you know if you can conquer, everything will be OK!

We release records all over the world and our bands are constantly on tour outside of Australia, but in most cases, these are cost neutral activities, at best. So where do we draw the line? Where does the dream end and we just be content with the success we have in Australia?

From an artist’s point of view, I think a band needs to own their home market before leaving to go abroad. Especially in Australia, as we are extremely blessed. It’s an expensive country to live in but we also have a high (ish) minimum wage, so quality of life is good. Further to this, the economy is good, and ticket prices, merch and records prices are high. So it is possible for a band to make quite good money in Australia. The trick is leaving Australia, which brings me back to my original point. Airfares for a 5 piece band from Australia to either Europe or North America are going to cost between $10,000 and $15,000 and by the time you do shows we usually say that just leaving the country is a $30,000 exercise at minimum. Match this with little to no income from first time trips overseas and you’re looking at a pretty big loss. Once again, we are the lucky country and we get some support from our government, but this is a re-imbursement grant in most cases, so you need to spend the money before they will pay you money.

It is similar for a business- we will strive to achieve abroad but at some point we also need to be happy with what we have in this wonderful country of ours.

It’s a similar challenge for international acts wanting to visit Australia. In one way we are lucky as we have a lot of festivals, and this is often a great way for acts to visit Australia in a less risky manner. The issue though with the festivals, is that without massive clout, young acts often end up playing to only a handful of people, and although the experience will be fun it won’t actually build a career in any way.

My favourite way to get bands in and out of Australia are tour swaps. We’ve done it successfully for years and it’s usually a surefire way to ensure your band will play to people in another country.

At the end of the day, it is going to come down to the music. If it is good or great, it will travel. Look at Gotye. We (the business) will continue to strive to set up our business in a way to ensure we can operate on a global level but after some point it comes down to the content. I’m not one of those people that thinks the business rules the world, I think some people forget that its called the music business. Without music, it’s just business, and then it’s off to the mines for Mike and I.


Guest post: Eric Tobin, VP of Hopeless Records

If you were to ask me who the top ten smartest people in the music industry were, I would hand you a list of the gentlemen running each of the major labels. Haha, wait, no I wouldn’t. The ‘smartest’ people are the ones with a positive attitude, who recognize there is still plenty the music industry could be doing right, if only we re-thought some of the core business models.

So I would add Eric Tobin to my top ten list. Eric has been driving a lot of the business development and A&R at independent label Hopeless Records, and is the man behind building and/or revitalizing the careers of All Time Low, Yellowcard and The Used, among many, many others. I asked Eric to respond to my last post, about future business models for the music industry, which really struck a nerve with some people. Eric’s reply is below.

Optimism in the business of music. You forgot what that is right? Here is the opposite of optimism.

R.M.S. Music Industry

No wait. This is better.

“The future of video”

Yeah yeah. It’s all going to total crap. I know.

It’s very American to get all caught up in a sensationalized version of every little thing happening (think: “the country is going to shit” – my favorite phrase – said for 200+ years). If we can make it the end of the world, we will – and I am damn proud to be a member of it.

The source of my optimism? My uncle Bob, a self proclaimed music lover, and a little thing that comes up from time to time in music – format wars.

My mom wouldn’t buy this one for me and now look where I am.

We’re right in the middle of another format war. The industry isn’t dying – it’s just not living off the back of an amazingly high margin product anymore. That product? LPs! We’re back to the same length plays as that first incarnation of the album in 1948 (thanks RCA!) which consisted of just a couple songs. High margin and cheap to make in volume. Yup, we are back to singles, with iTunes leading the charge.

OK so this new format changes the way you think about music and now it’s digital downloads, digital singles, ringtones! And then subscriptions, and DRM downloads, and blah blah blah… And our new music discovery leader YouTube and digital radio! And, of course, the CD is still selling (my pops just got Willie Nelson’s Greatest Hits on CD and had my technologically challenged mother “put it on her lap computer” – 2 for 1 in that quote really, go dad!).

I hear it all the time – where’s the money in these formats? How will we ever get back to where we were? Especially in this hot topic of streaming. Cue the complaints – the artist doesn’t get paid! The money is bad!

My point – let’s get back to being optimistic! Get excited! Music is no different than it was when it started. Millions of people continue to consume music that is created and mass marketed to them, and there are so many ways to monetize it – and there are smart and passionate people who want to help make even more money on the rights they own. Those who can’t get into optimism and new business models? Well, take an economics course.

Details, details – here we go:

Here’s an example (and I am the most qualified to say I am not the only guy thinking of this – not even close to first) – streaming subscription companies will make deals with your providers of data (ie the cable or phone companies) with their previously acquired rights. The biggest pain in the ass for any company is the licensing of rights from the big companies, but once they do it, they will sell the partnership to some data provider and “package” it. Boom! The upsell continues. “Unlimited music with your cable TV connection and free for two months.” Technology is catching up with your living room, i.e. Integrated TV sets, synced up to our car, our kitchens, our bed rooms. We have mom’s credit card paying the bill and our own playlists and mom is in the kitchen playing the newest TV sensation from the newest American Idol or other amazingly high-concept TV show to sell the idea of talent. Sure it’s small now – Pandora and Spotify penetration is not there yet because the access to the technology is not there for everyone and the brand trust isn’t there yet – especially for my Uncle Bob who loves Lynard Skynard and Guns n Roses and lives in a town you will never ever go to.

It takes about 3000 streams to equal the same fees the industry is getting now on a record. That certainly seems like a lot of streams – 2009 industry revenue was about $6.3 billion which means we’d have to stream approximately 7 trillion streams to equal our current revenue. Sounds crazy right? But let’s think ahead to when a third of the 300 million Americans will have access to “packages of music” from their mobile or terrestrial data provider at $9.99 a month, or free versions that are advertising at much higher CPMs. If those 100 million people stream just 20 songs per year – well that is 2 billion streams right there. Getting closer.

Which brings me back to my Uncle Bob the music lover – he will NEED to have the music package as much as the sports package. I mean he loves music (all 6 artists he knows) and my guess is that when he figures out how to use it he gets in about 47 songs played a year at the cost of $120 (@$9.99 per month) which equals $2.55 per song. Beats our current $1.29 standard = a 98% increase in song value. I can tell you who is winning there. Of course not everyone is like Bob – though I can’t say many won’t be like him either – it’s hard to say how the standard “music lover” in middle America will treat his music day-to-day when he gets busy.

Of course I could be wrong! And this format could be gone in two minutes – such is the way of entertainment and the way it’s consumed. But we must have optimism! People need music.

One more thing about my Uncle Bob. He has no idea about the state of the music industry. He still hears his 6 favorite songs on his local classic rock station. He is stoked – and he is not sure why I listen to this “hippy bullshit, you kids have no idea of what real music is!”

Everyone has an opinion about music.

Thanks Uncle Bob.

Uncle Bob, signing off (on fun!).