Paranoid venture capitalists in the stock music business are at it again

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  • #32858
    Music1234
    Participant

    Did everyone notice how everyone is having panic fire sales these days? My e-mail boxes have been lighting up this week with:

    -15% OFF ALL STOCK MEDIA

    -30 TO 50% OFF ALL VIDEO AND MUSIC

    – 50% BACK TO SCHOOL BLOW OUT SALES ENDING AUGUST 20

    -50% OFF ANNIVERSARY SALES ON ALL STOCK MEDIA

    It all looks pretty desperate and foolish to me.

    Let me start by saying these “VENTURE CAPITALISTS” that invested in these companies are so stupid, greedy, and ignorant that they have literally no business even investing in our business. They have no clue as to how this business really works or what is really going on in the minds of our buyers: video editors, post houses, marketing agencies, content creators, tv show producers and so on. Instead of staying patient during a slow summer when half the world is taking it easy somewhere on beach or near a Lake and riding out a weakening worldwide economy, stock sites are hitting the panic button and dropping prices of “stock everything” hoping that it will increase revenue.

    When are these fools going to learn that the price of a music composition for a video project is, for all intents and purposes, irrelevant. $9, $19, $39, $49, $59, $99 for a standard youtube license…does it really make a difference? People will buy what they need based on the need of their project!

    I have news for all. I too recently tried dropping prices of tracks that never sold thinking “hmmmmm..maybe my volume of units sold will go up” . The end result is ..well…Less monthly revenue! The same amount of units are getting sold, but the price drops serve no purpose other than reducing my monthly revenue.

    Price dumping is a failed strategy, and always will be. Price dumping needs to stop. No one makes more money with fire sales. All it serves to do is create insanely stupid price cutting wars that result in no one making more money (not even the stupid venture capitalists that decided to come and play “hipster investor dudes” in the music biz), but everyone making less money.

    A recession is in the making. All news and data seem to point to that. Dumping prices will not sell you out of a recession. Just buckle in and deal with it but stop dumping the prices of music tracks to $5. Everyone loses when you play that card. Recessions never last forever. In the end it’s all about quality, well curated music. It’s not about the cheapest price.

    Can anyone out there refute my observations?

    #32860
    LAwriter
    Participant

    Yeah, everyone seems to be having “sales” right now. Back to back sales even. One sale ends, and the next is just a week away. Why would anyone buy at “list” price when the sales never end.

    “Good business” seems defined by how many sales you can have, and how much market share you can grab from the other guy. The real, honest to goodness, SMART businessmen know how to work the market. And they are quietly doing just that. Behind the scenes, no sales, no hype, no flashy hoopla. Just solid product, solid marketing, solid customer service. They will survive.

    The VC endeavors? Who knows, but their strategies are definitely on shaky ground. I think your assessment is pretty spot on Music1234

    Oh, and yeah, the price difference between a $15 track and a $50 track is nonexistent for businesses making videos. IMO it’s shortsighted and ignorant to dump prices and try to compete at the bottom. A loosing strategy.

    #32861
    BEATSLINGER
    Participant

    Maybe it’s just Me. BUT, I see ALL of this as an easy fix.

    There needs to be in place a “clear” distinction between “Consumer, and Professional Usages”, with specific rules and regulations in place.

    I am tired of companies “deciding wether or not they will submit accurate cue sheets”, and I am tired of “low-balling by/for Professional Applications that have decent/great budgets in place”.

    #32862
    Music1234
    Participant

    That’s common sense beatslinger. A Madison avenue ad agency, or a Disney certainly has truck loads of cash to license a piece of music. These kinds of companies also have staff (music supervisors) that understand PRO’s and how publishing works. Venture capitalists do not have a clue about this stuff. They just see a “platform” that they can “scale”. Units sold and Market share seem to be all they are chasing.

    It’s time for the pendulum to swing back to a more strict “rights managed” approach especially when all these frivolous law suits are popping up daily. This business of “making it simple, easy, and less complicated” to license music is increasingly a failure. Buy once, use in perpetuity, no strings attached…is a total failure.

    You can not treat a student film maker or mom and pop youtube channel the same way you treat medium/ large size ad agencies, TV networks, and post houses in major markets. You also need people in the customer service centers who understand the nuances of: end usage, broadcast territory a track is used in, PRO’s, and how cue sheets and advertising claims really work.

    It’s sad, but none of these licensing platforms and their venture capitalist investors (still in 2019) seem to truly understand how the sync license business really works.The only strategy they can come up with is price dumping to grab more market share. Price dumping never works. If your price is lower, well guess what?….your revenue and monthly earnings are lower. It’s that simple.

    #32863
    BEATSLINGER
    Participant

    You can not treat a student film maker or mom and pop youtube channel the same way you treat medium sized and large size ad agencies, TV networks, and post houses in major markets.

    I completely agree!!

    If we can get a “2 Tier system” in place.
    1) Professional Usage (which also means that a consumer product that goes over a certain threshold/amount will automatically become tiered as Professional)
    2) Consumer Usage

    It will not only give us opportunities to earn a fair wage. I believe it will also start weeding out The Sharks, and Money-grubbing Venture Capitalist.

    #32864
    Art Munson
    Keymaster

    In response to Music1234, this is my own personal perspective.

    “Music is business, business is war, war is hell, adapt or die!”

    I came up with this phrase in 1980 when I was burnt out on studio and road work as a guitarist. I was no longer a writer/producer at A&M and was trying to figure out what to do next. That led me to building a studio in my home and teaching myself to engineer. This was at a time when home studios were cropping up all over L.A and the big commercial studios were incensed. They were doing their best to put us all out of business by reporting us to zoning. Didn’t work, and there are now home studios everywhere!

    This is just one example of how “nothing changes but the changes”. Just because something is true today doesn’t mean it will be true tomorrow!

    This is also a story about capitalism, Econ 101 and supply and demand.

    Reality is reality. You can bang your head against it all you want, but that doesn’t change it. Today we live in a global economy where an accomplished composer living in a third world country is happy to make $50, $100, $200 a month. This is our competition folks!

    There is a story on The Society Of Composers & Lyricists web site https://thescl.com/mission-and-history/ that tells the frustrating tale of trying to fight reality. These were the biggest composers of their time, and they still could not prevail over the music business, which was effectively screwing them over.

    We all want to make money with our music, but if our only goal is making money — and we have no love for what we do — what’s the point? The other day someone said, “Just ‘write hits’ and you will make a lot of money in production music.” God, how many times have I heard that over the years?! What is a “hit”? My response was, I can only write what I write. Trying to fit myself into a mold has never worked for me, and it takes all the pleasure out of creating music.

    And let’s face it: Music is product and, as in any business, we just want to move product. We have had more than a few businesses and have always had sales. Sales do work! It doesn’t mean you have to have sales constantly — doing so diminishes their effectiveness. But you can’t blame a business for wanting to stimulate sales!

    As far as investors go; I find the best revenge is to be an investor! Invest in the stock market, real estate or — whatever. Study and learn. Fortunately we have been able to do well in the market, but others have had success in real estate, Amazon stores, Ebay, even Bitcoin. Invest in yourself and create a business. Heck, I was flipping homes in the 70s in L.A., in the middle of a busy music career. Robin and I also created a web site in 1994 that turned into a successful business. We sold it 10 years later, at which point we entered the production music business. Through it all, we never lost our love of creating music. I don’t mean for this to be all about me or us. The point is, I think, one has to be a serial entrepreneur to survive.

    Of course there will always be that 1% of composers/artists that beat all the odds where everything falls into place! But, it’s always been my philosophy that you have to have multiple income streams. If you’re of a certain age with a family and responsibilities, I think it’s tough to put all of your eggs in the music “basket”. If you’re young and single it’s a totally different ball game. I would advise a young composer to move to L.A. (or other suitable location) and get on the inside track. That’s what I did in the 70s, and I know younger composers doing that now.

    So, I repeat: “Music is business, business is war, war is hell, adapt or die!”

    #32865
    BEATSLINGER
    Participant

    The other day someone said, “Just ‘write hits’ and you will make a lot of money in production music.”

    I’m checking back through my posts to see if I said that.

    If I did, I need My Head examined!!

    #32866
    Art Munson
    Keymaster

    I’m checking back through my posts to see if I said that.

    If I did, I need My Head examined!!

    Ha, ha, ha! No my friend, it wasn’t you. 🙂

    #32867
    b1nrybl0ke
    Participant

    The point is, I think, one has to be a serial entrepreneur to survive.

    A really useful reminder, Art. Multipotentiality!

    #32869
    MichaelL
    Participant

    I’m not sure that the libraries are being paranoid. Because this is vacation season, the end of July through August is one of the slowest times of the year for libraries. Offering deals to motivate sales during slow times is a common marketing strategy, which doesn’t necessarily signal doom and gloom.

    “Music is business, business is war, war is hell, adapt or die!”…

    …We all want to make money with our music, but if our only goal is making money — and we have no love for what we do — what’s the point?

    As I’ve said before, “There are easier ways to make money and better ways to make music.”

    This is also a story about capitalism, Econ 101 and supply and demand.

    Reality is reality. You can bang your head against it all you want, but that doesn’t change it. Today we live in a global economy where an accomplished composer living in a third world country is happy to make $50, $100, $200 a month. This is our competition folks!

    Absolutely. The reality is that this business is saturated. It’s not just saturated with content. It is saturated with people creating content. You can’t sustain high value in that environment.

    The other day someone said, “Just ‘write hits’ and you will make a lot of money in production music.

    “A lot of money,” compared to what? Working at McDonald’s?

    I’m not sure that earning a living from production music today is a realistic possibility for 99.9% of composers. On the other hand, as a source of additional income or ongoing passive income it’s not terrible. Most people would say that they can’t live on $10K to $20K per year, which is very true (depending on where you live). But consider the amount of money you’d need to have invested and earning 6% interest to generate a similar amount. We can’t roll back the clock and change global reality but we can adapt, manage our expectations, and plan accordingly.

    #32870
    cyberk91
    Participant

    “Music is business, business is war, war is hell, adapt or die!”…

    …We all want to make money with our music, but if our only goal is making money — and we have no love for what we do — what’s the point?

    Wise words….for this business….I’ve had to have multiple paths of income..unless I wanted to lose a lot of body fat…

    #32871
    Music1234
    Participant

    July through August is one of the slowest times of the year for libraries. Offering deals to motivate sales during slow times is a common marketing strategy

    Michael, you are missing my point. My point is that when our customers need a track, they go on a search to find the right track for their project and the price of the track is the last thing they are worried about.

    I still believe what I say is true because I have heard so many editors make the statement too. Video editors using our music will buy what they need period. Whether the price is $15 or $199…if they hear and temp in what they need and want, they will buy it. These “sales” are desperate and pointless. Price dumping is pointless and will only result in less monthly revenue for both composers and music licensing platform operators.

    If sales are down, it’s because big companies are spending less on media production at this time. Dropping the price of music tracks is not going to motivate companies to increase purchase orders for media production.

    Price Dumping and “50% off sales” serves no purpose whatsoever in our business.

    In regards to saturation and over supply, that always has been the case and always will be case. Cues that never sell essentially just fall into the garbage bin and are obliterated into ether dust. They essentially are not even inventory any more because they are burried into non-existence within search engines. Frankly, in 2019, why are stock music licensing platforms even holding these irrelevant and dated cues on their servers? Just blast them into non existence and eliminate the inventory that is, for all intents and purposes, “dead content”.

    You “win” with quality music and quality service, not with price. You “win” by understanding publishing and how PRO’s pay. You win by gathering the data from clients as to how they intend to use the track? Web only? TV Spot? radio Spot? TV show? Vlog? Podcast? Film? These ignorant venture capitalist “investors” do not understand any of this.

    We all want to make money with our music, but if our only goal is making money — and we have no love for what we do — what’s the point?

    You folks are implying that there is little money to be made? Then why are venture capitalist investors jumping in this game? They jump in because they see an opportunity to exploit. They succeed at that but they also do it in a manner that from my perspective is just so stupid and foolish and is…well…just a bad business plan. They leave ridiculous amounts of money on the table from overt ignorance and a total lack of knowledge of how music publishing really works.

    Selling music is not like selling apparel.

    #32872
    LAwriter
    Participant

    how do I give that ^^^^^ a big thumbs up??

    #32873
    Art Munson
    Keymaster

    they go on a search to find the right track for their project and the price of the track is the last thing they are worried about.

    That, I can agree with.

    These “sales” are desperate and pointless.

    If they didn’t work, the world would be “sale” free.

    Cues that never sell essentially just fall into the garbage bin and are obliterated into ether dust. They essentially are not even inventory any more because they are buried into non-existence within search engines.

    That is not necessarily correct. Case in point: We had an alt mix of a track that had not sold in five years on one site (it has sold on other sites). That track finally sold and ended up in a Gorton’s Fish Stick commercial and will probably generate about $1k based on the occurrences picked up by Competitrack.

    Dropping prices on tracks that have not sold previously has resulted in sales for us. Are you saying composers should not have the opportunity for more sales because you do not like their pricing? Remember these are tracks that have not sold. If they start getting traction I will raise their prices.

    You “win” with quality music

    These kinds of comments always amuse me. Just who is defining “quality”? After all one person’s trash is another person’s treasure. I’ve heard a lot of quality music (IMHO) that does not sell and vice versa.

    You “win” by understanding publishing and how PRO’s pay. You win by gathering the data from clients as to how they intend to use the track? Web only? TV Spot? radio Spot? TV show? Vlog? Podcast? Film?

    This I can also agree with and I think most successful libraries try to do that.

    These ignorant venture capitalist “investors” do not understand any of this.

    Just who are these ignorant venture capitalist “investors” you are talking about? How many libraries do they control? Data? What is your solution?

    You folks are implying that there is little money to be made? Then why are venture capitalist investors jumping in this game? They jump in because they see an opportunity to exploit.

    Again, reality strikes. How do you propose to stop them exploiting opportunities? After all we are a capitalistic society. Once again, what is your solution? Is this just another b*tch fest?

    Selling music is not like selling apparel.

    Ah, actually it is. Not to us, of course, as creators. The end user, whether they pay $15 or $100, is just looking for something to get the job done. In the end, it’s just product.

    #32875
    Music1234
    Participant

    Dropping prices on tracks that have not sold previously has resulted in sales for us.

    I sold a few that never sold before too Art, but the strategy did not increase the volume of units sold, so from my perspective price dumping results in lower monthly earnings.

    Just who is defining “quality”?

    I’d have to say that the buying public define it, but also site curators who also are musicians (we hope at least) define it by curating the music and having taste and intuition based on experience of “what works”.

    Just who are these ignorant venture capitalist “investors” you are talking about? How many libraries do they control? Data? What is your solution?

    I don’t know these people personally, but from the discussions I have had with some very experienced players in the business both writers, library owners, and employees of some stock music licensing platforms, they all talked about answering to “investors.” When you google search “stock music”, “Production Music” , “Royalty Free Music”…most of those companies showing up on page 1 are backed by hedge funds, venture capitalists, etc. I get the impression that these people tossing millions of dollars at these companies really do not understand music publishing. The policies and business models they have been enacting these past 2 years really seem to be putting all stakeholders involved on a slippery slope. As far as solution goes: well we actually were in a good place when a price floor was put in at $20, but now the policy has changed and we’re seeing a trend of much lower prices. Lower prices result in less revenue. I have verified that because I figured “hey let’s give it a shot”. Well it does not work. AM I crazy? Do lower prices work for anyone? Were customers even complaining about how expensive production music was when the floor was at $20?

    Art, I am not initiating a “bitch fest” just trying to create some lively discussion about where we’re headed into the future because it looks pretty dicey to me. It’s also self inflicted. Too many rights are being granted to larger companies for too little money. When a policy is set that a customer can get a track for $5 and the projects’ end usage is national broadcast TV rights in perpetuity, something is wrong. Someone has their eye off the ball. When the data of how a customer intends on using a track is not gathered and shared with the stakeholders (writers and publishers), especially for national and worldwide broadcast tv rights, something is wrong with that policy.

    The end user, whether they pay $15 or $100, is just looking for something to get the job done. In the end, it’s just product.

    This is exactly my point and it is exactly why everyone should charge a respectable price. Ok so we all know a student film maker needs music as does the casual youtuber. Why not have drop down menus that start the buying process with the question: How do you intend on using this music? When big ad agencies and big brands can get a track for the same price as a student film maker doing a “no budget” film, that’s a problem that needs to be solved. These “investors” setting policy need to step up and solve this problem soon. Using tunesat to spy on and investigate the usage of our intellectual property is getting to be ridiculous. There has to be a better way.

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