The Fix

After lashing out at Smashing Pumpkins’ former label, Virgin, earlier this week for threatening his band’s “artistic integrity” by sticking its name on a “Pepsi Stuff” promotion, Billy Corgan is speaking out on the breach-of-contract lawsuit against the record company.

“I’m sure they indicated to Pepsi that they had a right to do this, full well knowing they do not have the right,” the frontman told Billboard.com. Which, if you think about it, makes a lot of sense.

He went on to say that even though the Pumpkins have been at war with the label for years (with whom they are co-owners of their back catalog), this particular incident “crosses the Rubicon. You’re going to see more of this playing fast and loose with the rules, hoping they don’t get caught. At face value, it’s not a huge deal. But in terms of precedent, it is, because there will be much more of this coming.” We’re not sure what a “Rubicon” is, but in “Dungeons & Dragons” terms it sounds pretty serious.

Meanwhile, Corgan said the band, now operating without a label, plans to release pieces of new music over the next two to three years with the hopes of having it all culminate in another record at some point, even though they said they recently said they wouldn’t make any more records. Oh, and did we mention, Pepsi, Pepsi, Pepsi?

“Are You an Idiot?”
I can still remember the day a few years ago when I was running along the Embarcadero in San Francisco, thinking about the state of the music industry and, well, how drastically fucked up it was…that was the day that the initial idea around Fuzz was born. The night before, I’d been talking to a friend married to the front-man of a band that toured about 150 nights a year. The band had fans all across the US and internationally. Their most recent gig was at the Fillmore and I assumed they were blowing up. Exactly wrong. I asked about record sales and she nearly punched me. “Are you an idiot?” she asked. I nodded pretending to empathize, but I was really nodding in response to her question as I had no idea what she was talking about. She explained, “My husband, like most artists, has never made money selling music. The reason he tours and is never at home is because we pay the rent by selling merch and playing live. He’s signed, has thousands of fans, and from the outside, he’s a success. The truth is we’re still having problems making ends meet.” To ensure her further ranting, I naively asked about the label and what they were doing to improve the situation. She then went nuclear and began spewing concepts at me like “recoupment” and “advances are akin to slavery.” My wife then came running over to apologize thinking that I was drunk and was being a jackass. It was a pretty sobering chat to say the least. I was confused though–was it the artist that just didn’t have the business sense to make it work or was it that there were fundamental problems with the industry? Was it a little bit of both? As I started to find the answer, I was soon hearing similar stories on an increasingly frequent basis.

I’ve played in several bands since I was 13, none of which you’ve likely heard of. For me, I just loved the end to end process of playing - the nervous anticipation prior to a show, lying awake all night imagining playing to a packed house, hanging backstage after the show with, you know, attention, the focused intensity as I set up my gear. I loved the whole basic routine: properly setting the levels on my amp, not too much reverb to sound cheesy, but enough to cover my mistakes–check, making sure the 9 volt battery in my pedal still worked–check, tuning and re-tuning–check, making sure the makeshift channel switcher still worked–check. Then when the lights came on, the thrill of going on stage to be met with the harsh reality that there were more people in my band than folks in the audience…

OK, so it wasn’t always like that. We had our moments of glory. Maybe not in a universal sense, but enough to keep me tooling away in the woodshed practicing my chops, driving my parents crazy by asking for every piece of new gear that came out on the market, and the countless guitar geek zines that seemed to find their way to every corner of the house. Rewinding and playing cassette tapes to capture every nuance of one of Jimi’s riffs or even trying to learn Larry Carlton’s solo note-for-note on Kid Charlemagne was part of an ongoing ritual. The world was a great place and music was everything. Like every kid with a guitar in America, there were times I thought, “One day, I’m gonna be a star!”

Now I look back on those days thinking, “Damn, I was a clueless.” The reality of the music business then and now is that trying to be a hit making machine is next to impossible. Becoming a star or being “discovered”–forget about it. Trying to be that artist (or the label for that matter) at the top of the pyramid that can sell a million units–highly unlikely. Sure, there are always exceptions to the rule, but the truth is that going about the music business the way that it’s been done for years is a recipe for disaster.

Steve Albini once wrote a famous article about the dreams and the realities of the music business entitled, “The Problem with Music.” It’s an eye-opening piece that transparently and plainly discusses the dreams and the harsh realities of artists trying to make it in the traditional model.* After reading it, my entire conversation with the angry wife at the party made perfect sense. It’s no surprise that being signed to a traditional label has often times been described as the modern form of indentured servitude.

But, there is hope, if one can overcome the narrow notions of success as an artist. Success in today’s music industry can be defined differently, individually, and with more tools at your disposal than ever before. Success can be defined within the context of being able to pursue one’s art on a full-time basis; it’s about taking control of one’s own career and having the choice to make decisions both creatively and financially based on actual information that’s available anywhere at any time; it’s about realizing that dreams can be quickly smothered by the weight of harsh reality, but hard work increases your odds for success; it’s about the willingness to do business in an entirely different way–and it’s about making great music that means something to you.

It’s a revolutionary time to be in the music business…if you have the willingness to do things differently. You don’t need to be a 30-year industry veteran to figure that out. The web and technology has challenged the fundamental way that the music business is done. From discovery to production, marketing to distribution, the landscape has changed dramatically. Artists, known and unknown, are self-releasing new albums and are reaping the financial benefits overnight while maintaining full ownership of their masters. Gone are the days of $100,000 production costs for professional recordings. Mainstream music is dying fast as the internet has provided an easy means to discover even the most obscure niches and genres in the long tail. Online marketing has become a key means other than touring for emerging artists to make a name for themselves. One of the majors is owned by a private equity firm and radio is no longer the primary music discovery vehicle. In fact, more than 5,000 folks have been let go from record companies since the turn of the millennium. It is changing.

The turbulence brings great opportunity–artists now have more choices about how to take their career to the next level than ever before in the history of this industry. The four pillars of the old regime are decaying rapidly as new entrants are evolving innovative ways to contribute to the music uprising. No one has all the pieces and it’s going to be a hell of a show, but revolutionizing and democratizing the production and access to music is certainly a cause worth fighting for.

*In April, watch for the exclusive interview with Albini here on The Fix as he revisits his infamous observations on the music industry

As a teenager, Jeff Yasuda cast aside his cultural roots of violins and violas and asked his parents for an electric guitar. They said “no.” After saving to buy his own, further years of gear acquisition, and miles of tablature studies, he proudly states he is a bona fide hack. Yasuda strayed from his true love while pursuing bean counting, the IPO market, and venture capital. After 6 months away from that to travel the world, he reunited (and it felt so good) with his passion for music and the artists that create it. Yasuda grew up in San Francisco and has lived in Hong Kong, Boston, and New York. He started Fuzz with a few friends who share his belief that the music industry is ready for change and his strong desire to do something about it. Between being a husband, father, and running a start-up, he continues to hack in two San Francisco bands.

Elvis Costello is the latest in a string of high-profile artists who are utilizing vinyl records to set themselves apart from the same old music industry release dilemma. Momofuku is the title of Elvis Costello’s latest album, to be released exclusively on vinyl April 22 on Lost Highway and containing a coupon good for one free digital download of the album with purchase. No CD counterpart in sight. The album title translates roughly to “lucky peach,” a bit of rough slang that mixes up Japanese and Korean. But New Yorkers and followers of culinary trends know Momofuku as the name of a small but popular chain of Asian restaurants in Manhattan owned by culinary wunderkind David Chang.

Coincidence? Parallels? Would we go so far as to liken the original Momofuku Noodle Bar to the true aim of Costello’s career from its starts up through Spike? To compare Momofuku Ssam Bar, its trendier and more daring successor, to Costello’s wild experiments of the ‘90s from opera to duets with Diana Krall and Burt Bacharach? And now, Momofuku Ko, an intimate dining experience involving a menu that changes at chef David Chang’s whim, and an exclusive online reservation system…to Elvis’ own Momofuku.

Sure, we can go there. In the past six months, bands like Radiohead, Nine Inch Nails, and Jack White’s supergroup the Raconteurs have all figured the format significantly into their latest releases, coinciding with an uptick in vinyl sales across the music industry. Maybe it’s the collectibility factor, or a growing desire for formatted, curated content among the listening public: the return of the album, if you will, and the return of artists whose careers have been staked on the long form object, rather than single tracks. But it seems to be working, at least from the looks of intrepid indie labels like Matador, Sub Pop, and Secretly Canadian, all of which have been including download coupons with their vinyl titles for the past year or two.

A vinyl-only release is a bold move, one which surely might limit Elvis Costello’s audience on this one…but hey, much like Chang’s done with Ko, it’s his choice. No word on whether Costello’s a fan of Chang’s restaurant, but if he could find a way to give out an order of Momofuku’s steamed pork buns with the record, that’d be good enough for me.

Kevin Kelly, the founding executive editor of Wired magazine, consistently adds insight on how to cope with our rapidly evolving digital culture. Since survival in the “long tail” environment is a major concern of indie artists, it is not surprising that Kelly’s web-article on “1000 True Fans“, first posted on March 4, 2008, has gone viral in the blogosphere. If you are not part of the group that caused this phenomenon, you should certainly read the article now because it is relevant to you as a passionate stakeholder in the future of music.

I view with wonder both the adulation and controversy created by Kelly’s article. Its title, “1000 True Fans”, is only a metaphorical benchmark, yet it is precisely because it is a powerful and easy to grasp symbol that many fail to get Kelly’s basic premise, which is reflected in his simple and true statement, “Direct fans are best.” The key word to tag here is direct.

Kelly frames his 1000 True Fans formulation as follows: if your True Fans (and 1000 is a feasible number) spend one day’s wages per year of, say, $100 in support of what you do as an artist, that sums up to $100,000 per year–which is a living for most after deducting modest expenses. Kelly stresses that the key challenge for an artist is to maintain direct contact with their True Fans who can provide them with a living through multiple revenue streams if they “cultivate” the “direct support using new technology”. These “diehard fans” will be surrounded by “concentric circles of Lesser Fans.”

While Kelly’s perspective certainly resonates in broad terms, $100,000 per year would be a dream come true for most struggling artists with day jobs and who are on the verge of giving up on their dreams of making any money at all. The contra-Kelly view that $100,000 per annum is not an easy task to achieve (in acquisition or maintenance) is well presented in Scalzi’s article on “The Problem of 1000 True Fans“, which artists and music fans should also read. However, most critics overlook the important point that Kelly uses the “formalized” term “1000 True Fans” to represent a process or path rather than a specific result. As Kelly states, the “actual number is not critical”, it’s the “mid-way haven” where you “make a living instead of a fortune” that is “a much saner destination [for artists-in-the-making] to hope for”.

So let’s take Kelly’s notion of using technology to obtain the direct support of True Fans to find a good “home for creatives in between poverty and stardom” and break it down into some workable baby-steps first. That is, before artists give up their day jobs, let’s look at the process to make, say, $1000 per year, to see if we can find the “sweet spot” of focus as artists try to create aesthetic values that should, somehow, generate a return commensurate with the value created.

First, consider the following range of possibilities on how to make a thousand bucks. All of these formulations are based on some simple mathematics and immutable economics that markets clear according to supply and demand for value created:

1.) 10 fans x $100 = $1000 [this reflects on a smaller scale the “one-to-one business model” of “direct contact” that Kelly favors to acquire True Fans, defined as “someone who will purchase anything and everything you produce”.]

2.) 100 fans x $10 = $1000 [this reflects the “one-to-few business model”, being the inner-circle of Lesser Fans in Kelly’s formulation of “concentric circles” on their way to becoming True Fans willing to part with more money as more value-added direct connections are made. NB: this was the “album-centric model of the major labels (multiplied by millions of fans rather than 100) in the good ol’ days (or bad ol’ days depending on your perspective).]

3.) 1000 fans x $1 = $1000 [this reflects the “one-to-many business model”, being Kelly’s concurrent process of nurturing “many more Lesser Fans” as you acquire True Fans. NB: this is the core of the “one-price fits all” iTunes model currently pushed by Apple (multiplied by millions rather than 1000) but morphing as Apple makes its real margins on iPod sales.]

4.) 10,000 fans x 10 cents = $1000 [this reflects the “many-to-many business model”, that Kelly suggests may be higher up “the narrow and unlikely peaks” of the long tail. NB: this “marginal pricing to zero” is essentially the environment of “music for free” that is currently forcing artists to search for other business models that generate, somehow, returns commensurate with value extended.]

If you have earned your Master of Business Reality, you will note in the foregoing formulations the countervailing trade-offs between generating “high margins” ($100) and “high velocity” ($1) as the primary revenue driver. But, let’s face it, margins vs. velocity is only a theoretical framing exercise for most artists. It is exceedingly difficult to get anyone to part with a hundred bucks, except maybe family and close friends. Equally, when artists are just starting out, it is difficult to get a thousand folks to part with a buck. And we know that even when downloads are free, an artist will likely not get 10,000 people to take them. Where then, indeed, do you find the “sweet spot” of your focus if any and all of the foregoing business models seem to be difficult to achieve for artists just getting started or artists who have always struggled to make a financial breakthrough? I believe that even on a smaller scale of revenue possibilities, Kelly has the right answer.

For indie artists, the key take-aways from Kelly’s article (or what he calls the “gist of 1000 True Fans”) are his observations [emphasis added], “To raise your sales out of the flatline of the long tail you need to connect with your True Fans directly. Another way to state this is, you need to convert a thousand Lesser Fans into a thousand True Fans…the technologies of connection and small-time manufacturing make this circle [of direct contact, feedback, and love] possible.”

What Kelly is saying in his prescient and now famous article is that even within the long tail environment fostered by new technologies, there are practical opportunities for artists to make a living by focusing on “the heads within the tails” rather than the stardom of the “heads within the heads.” This is accomplished by using the power of “the very technology that creates the long tail” to establish direct rather than indirect connections. The reason this sounds familiar is that it is the very same reason we are all here.

Last week Time Warner’s AOL, getting somewhat long-of-tooth in the digital age, announced the $850 million acquisition of Bebo, described as the third largest online social networking site after MySpace and Facebook. This major web-related M&A deal comes on the heels of the proposed $44.6 billion take-over of “web pioneer” Yahoo by Microsoft (or the ultimate combination of Yahoo with another large corporate or private equity aggregator that Yahoo prefers in order to retain its iconoclastic persona , to the extent it still may exist).

I just learned that “Bebo” is a backronym (love that word) for “Blog early, blog often”. Indeed, early-adoption and frequent, even obsessive, participation may well be a necessity for developing a sustainable identity and voice on the Web.

The recent deals by the Masters of Universal (read: suits) are centered around projected future revenues streams derived from high velocity “web-action” not yet proven to be capable of monetization. To justify the hefty amounts involved in the recent M&A transactions, fiduciary and shareholder pressures will force the suits in these hierarchic organizations to try to commercialize and monetize the activity within the still “protected walls” of the acquired “networks” in competition against one another.

This arms-race to commercialization by each of the major web-oriented players operating behind their own protected gardens is based on a dubious proposition. Most of the existing online social networks (MySpace, Facebook, and Bebo) and others are already only one “OpenSocial” click apart. This one-click is, for now, a barrier to seamless connectivity–but the walls are about to be breached. The techno-gunslingers, an independent breed of giant killers nurturing their magic bean-stalks in their garages everywhere, are developing a multitude of schemes to merge online activity across networks. This will increase the rush to monetization and the web frenzy.

Within a few short months we will have de facto convergence into the Mother-of-All-Social-Networks, the effective consolidation of Bebo, MySpace, Facebook, and most other platforms in cyber-space. This motha will be big, wild, and woolly–and cluttered with commercialization. What happens then?

There are already a mind-boggling eight million (8,000,000!!!) bands registered on MySpace alone–with duplicate satellite pages created by musicians at “OppositeOfMySpace” for redundancy and reach, and the numbers keep growing. The 1) pressures for mass-based commercialization and monetization of web-action by the major players and 2) convergence of all music sites described above, encompassing established artists, indie artists, and artists-in-the-making, will present (as usual) both crisis and opportunity.

Netizens use the web in two operating modes. 99% of the time (it is probably more) we are in “passive” mode, and 1% of the time we are in “active” mode (blogging early and often, whatever). It is a no-brainer that it is better to be in active mode as a player rather than a passive observer if one chooses to enter the digital arena. If, as an artist, you are unable or unwilling to increase the amount of time to project your true identity and voice on the web, you should align yourself with those you trust, your most passionate fans and intermediaries/facilitators, who will “be-bo” on your behalf if you give them the proper incentive.

How do you project your identity and voice on the web effectively? Let’s frame this issue for possible resolution in terms of 1) “signal” and “noise” in the broad context of 2) linkages operating within a hierarchy of networks within networks (within networks–you get the picture). You must create nuanced identity and voice to fit network context ranging from “small groups” to linkages in a hierarchy interconnected by “super-nodes”. In communications theory and in life, what is “noise” (spam) to some, may be “signal” (a valuable communication or network connection) to others–depending on what part of a hierarchy of networks you are dealing with. Even spam sucks for some, but not necessarily for others. As the techno-slingers like to say, this is a non-trivial exercise. Again, without a calibrated incentive/disincentive system, the complexity of this undertaking would defy resolution.

There are elements of “value” in our activities as economic and social beings that cannot be quantified with the same level of precision as financial capital (i.e., money). For now, we call these things of value “social capital,” in contradistinction to “spam” on the one side with little or no value and “tangible capital” on the other side that clearly, and by definition, is value that can be created, stored, and exchanged–Economics 101.

Our inability to quantify social capital gets to the very heart of the dilemma facing indie artists: the wild and woolly web in process of infinite expansion at the same time that Mr. Big is trying to consolidate and commercialize the web-action, a process that most indie artists as iconoclasts find antithetical to every fiber of their being.

When convergence takes place, we should strive to develop at our Nightschool a better way for indie artists to create, store, and exchange social capital which is, for now, a default metaphor for things of value that cannot be measured. Just one notion that seems to be heading in the right direction is the concept of SocialBuxx™, a well-articulated quantitative approach to “keep score” and maintain some semblance of order without surrendering to Mr. Big. To be sure, trying to quantify an elusive intangible to become a de facto standard may well be quixotic–and some have noted with insight that it may take the magic out of creation and discovery. Nevertheless, in my view, excellence is the absence of disorder without unrelieved uniformity, and we should do our utmost to establish this condition as we individually seek to develop our identity and voice on the Web.

Bloggers are bloggin’. Magazines are writin’. Newspaper editors are yellin’ “Stop the presses!” What’s the good word? Apparently, vinyl is back! Vinyl records–seven-inch singles and twelve-inch LPs, and all the in-between formats–are back in vogue. Turntables are once again being produced for a market more than willing to snatch them up, plug them into their USB ports, and digitize their collections. Speculators are out there, digging through the crates at stores, flea markets and yard sales, their eyes and hands serving as some manner of divining rod that’ll net them a solid return on investment via eBay.

The resurgence of public interest in vinyl resides primarily in circles of independent artists and labels positioned outside of the traditional music industry, as well as those within who are looking for some leverage against the slump in CD sales, stemming from the surge in both the sales of electronic media and the act of illegal downloads. Last year, the U.K.’s legendary and forward-thinking Southern Records launched a vinyl-only label, Black Diamond, with its first release by indie underdog P.W. Long, God Bless the Drunkard’s Dog.

Vinyl, you see, is the peoples’ medium. Rejected by an industry that once held it as its backbone, it’s become the mouthpiece of counter-culturists, DIY lifers, and the disenfranchised. It’s a format that’s breathed life into genres like punk, garage, and power pop both in their infancy and in each of its revivals. It’s been used by artists with voices as strong as their marketing savvy to improve their own individual outlooks on how to gain notice and operate as their own self-sufficient entity–see Superchunk or the White Stripes for a concrete example. As a used medium, it’s even sweeter: fans can purchase classic albums for pennies on the dollar, eschewing technological advances for an unbeatable bargain.

Vinyl’s also a medium ripe for exploitation. With the sales of music declining across the board, pressings of new records have dropped significantly, upping the collectability factor. Being in the right place and time counts in such matters of hoarding, and a group of would-be “blue chip” record collectors have proven that a rare record is a rare record, be it old or new. Thus, we have a fairly unscrupulous set of diggers out there who are driving up prices on desirable releases, the revenue from which is rarely seen by the artists responsible. This sword has two edges; witness the recent vinyl/data disc box set release of Nine Inch Nails’ Ghosts I-IV, limited to 2500 copies, priced at $300 a pop, and sold exclusively by Trent Reznor’s web operation. It’s great to provide superfans with such an intimately packaged artifact, but to blow past the standard price point for such a release by about $200 raises questions about the nature of music as a commodity.

As the technology and formats of music delivery continue to evolve, vinyl is somehow still a player. Whether or not younger generations without the sentimental association will embrace it as a valuable or interesting option remains to be seen. Still, if you stumble across a turntable in a thrift store for $10, you might want to pick it up.

Doug Mosurock will be leading a panel discussion about the vinyl revival at Austin’s SXSW this Saturday, March 15th at 12pm in room 15 of the Austin Convention Center, joined by panel of independent label personnel, distributors, and record store owners to discuss the current state of vinyl, where it might go from here, and if there’s a chance that the format that started the music industry might be able to save it after all.

Trent Reznor has made good on his promise to never work with a record label again (sorry, Interscope and parent company Universal Music Group), and shown the world that you can give songs away and still make a profit off downloads.

Ghosts I-IV was released March 2 via the Nine Inch Nails website, torrent sites, Amazon MP3, and is still up at The Pirate Bay .

With this release, Reznor did it all: the music, the packaging, setting the price (36 songs can be yours for just $5, but there are download packages for every wallet size), and setting up extra servers to deliver to his fans. And if, for some reason, you have a problem downloading via the NIN site, look around on the internet. Free downloads are available and Reznor encourages you to take what you want.

The NIN Wikipedia entry notes that in September of 2007, “Reznor continued his attack on Universal at a concert in Australia, urging fans there to ’steal’ his music online instead of purchasing it legally. Reznor went on to encourage the crowd to ’steal and steal and steal some more and give it to all your friends and keep on stealin’.'” His primary complaint was that Universal stood in his way of creating an interactive fan site on which users could remix his tunes .

Ghosts I-IV was made easily available for “stealing,” and yet fans, recognizing the collectability, bought up all 2500 of the extremely limited edition of Ghosts I-IV–which gets you four 180 gram vinyl albums, two CDs, art removable for framing, a Blu-ray disc, and tons of extras, all numbered and signed by Reznor. At $300 a copy, this is no entry-level purchase. Fans committed and proved Reznor right.

Always known as a studio recluse, Trent Reznor has finally outed himself as a near-classical composer–his latest album has 36 tracks broken into four segments, with zero vocals. Guess he can say everything he wants with a drum machine.

Trent Reznor explains, “I’ve been considering and wanting to make this kind of record for years, but by its very nature it wouldn’t have made sense until this point. This collection of music is the result of working from a very visual perspective–dressing imagined locations and scenarios with sound and texture; a soundtrack for daydreams. I’m very pleased with the result and the ability to present it directly to you without interference. I hope you enjoy the first four volumes of Ghosts.”

Seth Colter Walls of Newsweek described the album as “the kind of absorbing musical experience that the surviving ranks of know-it-all record-store clerks would be pushing on customers, if only they could offer it for sale.” Reznor has allowed fans to bypass the store and the monolithic labels of the past.

In Vol 1, No. 1 of Rolling Stone (November 9, 1967–price: twenty-five cents), the then underground publication self-described as “The Revolution Chronicled By Revolutionaries”, there is a Letter from the Editor that states in part:

“We have begun a new publication reflecting what we see are the changes in rock and roll and the changes related to rock and roll. Because the trade papers have become so inaccurate and irrelevant, and because the fan magazines are an anachronism, fashioned in the mold of myth and nonsense, we hope that we have something here for the artists and the industry, and every person who ‘believes in the magic that can set you free.’

“Rolling Stone is not just about music, but also about the things and attitudes that the music embraces. We’ve been working quite hard on it and we hope you can dig it. To describe it any further would be difficult without sounding like bullshit, and bullshit is like gathering moss.”
-Jann Wenner

Rolling Stone is itself chronicled in Wikipedia and has, to me, gone from underground to mainstream and thus represents both the promise and failed possibilities of an epoch-defining period. The second period of dramatic disruption is occurring right now.

Paul Resnikoff at Digital Music News described the insidious lack of trust that is plaguing the music industry today. I thought it apt in these acrimonious times to post a few observations at our collective Nightschool concerning the evolution of “trust” and “honor” in music.

While looking at the business side of the music industry, I see an entire ecosystem that has lost its compass, morally and economically. The RS Revolution (version 1) failed to gain headway and the lack of direction is creating both hardship and opportunity for existing Artists and Artists-in-the-making. It is time to disaggregate the old music ecosystem. And perhaps this time, the Music Uprising will take hold.

I. Resurrection of Trust in Music
At thecapitalclinic, I found that, by looking at the negative side of things, you can find the positive side hidden underneath and in contradistinction. What I see all around me in the music industry in transformation is a lack of trust among the constituent parts of the system, the Artists, Fans, and the necessary Intermediaries/Facilitators. I, thus, ask myself: How can Trust be resurrected in the presumptively segmented society in which we now find ourselves? I have spoken long and often about the importance of communication links and supernodes in an digital world and the emergence of alternative forms of capital to “keep score” (and we will get back to these themes), but for today, I would like to focus on the importance of ritual honor in restoring trust.

II. Ritual Honor In Music
David Fricke, senior editor at Rolling Stone, has been described as one of the “most passionate, influential and knowledgeable music writers” in the industry and, to me, his observation that “buying music is a social transaction” provides the key to resolve the current artist/music industry dilemma of “digital for free”. Since Fricke works for Rolling Stone, we might call the new revolution (music uprising) RS Revolution (version 2). Let us elaborate at our Nightschool.

Fricke’s insight is blindingly simple: the traditional buy/sell relationship between artist and fan as a one-time market transaction is DEAD; however, the continuing artist/fan relationship itself is very much ALIVE, but conditionally.

How to monetize a continuing social relationship as opposed to a singular commercial one is then just a matter of elegant execution that can take a myriad of forms, depending on how industrious and clever Jenny and Johnny are.

Once you move outside of the single buy/sell market (i.e, a price-driven or price-led supply/demand) paradigm to a broader artist/fan relationship in a hybrid digital/personal context, the world of possibilities opens up to increase the velocity of your social capital.

A “social transaction” that transcends a sale of a product but is more akin to the ritual exchange of honor given for honor received may well cut the Gordian knot that has constrained the development of the music industry for decades and trust will be resurrected.