Yesterday, we spoke with Ted Cohen, the founder of TAG Strategic, a digital branding strategy firm that serves tech and media companies. Prior to founding TAG, Cohen worked in artist development at Warner Brothers in the ’70s and ’80s, working with artists like Prince, Pretenders, Talking Heads, Fleetwood Mac, and the Ramones. He also has close to 30 years of experience working on digital music strategies.

Everybody is talking about how artists need to think of themselves as brands. But this is hardly a new idea. Haven’t labels like Warner Brothers viewed artists in a similar way for a long time?
We were really focused on building the artist as a brand. We realized, early on, that there was a big difference between having a hit record and having a brand that gave you a career beyond that hit. A lot of artists, and I don’t want speak ill of anybody, but someone like REO Speedwagon, if they had a hit single, they could tour stadiums. If they didn’t, they couldn’t fill a club. They didn’t have that brand credibility that Chrissy Hynde developed with the Pretenders or David Byrne developed with the Talkings Heads, where you’d want to go see them even if they hadn’t put out a record in three years, because you thought they had substance.

It’s true that David Byrne and Chrissy Hynde have that substance, but a lot of it is non-musical. What else besides music goes into a successful brand?
Do they have a story that people will gravitate to beyond the music? Is it something that fans in the demographic they appeal to can have a relationship with? Do they have a point of uniqueness?  This is what prevents somebody from saying, “She’s the next Taylor Swift,” or “She’s the next Gwen Stefani.” You don’t want to be the “next” anything.

I’m working with an artist named Rana Sobhany, and initially she was the first iPad DJ. Gizmodo featured her, WIRED featured her; Mac Life, Huffington Post too. And this was all her work. She’s relentless about building the brand. With every artist, the idea that “I’ll put my music up through Tunecore, and I’ll make it available on iTunes and Amazon, and I’ll build a Facebook page and a Myspace page, and I’m set”…Those are just the basics. It’s creating that relationship, really creating a bond.

Rana Sobhany, the first iPad DJ

So when starting out, is there any sense in an artist thinking about those non-musical aspects before making music?  Is there any sense in saying, “Maybe it’s better for me professionally to just focus my first release on the angry songs, it’ll help me stand out,” as opposed to saying, “These are my ten best songs, I’m going to put them on an album”?
There is no imperative to publish albums at this point. If you have three great songs, create a three-song bundle and put it online. This thing of having to fill up a silver disc with 12 songs is over now. If you’ve got four great songs right now, you can put up four great songs. Or if you write a song a week, you can put them up that way. It’s whatever you want to do. There’s no longer a reason to get 12 songs together, get them to the label, wait months for them to hit stores, then try to feel fresh about them when you finally get on tour.

The freshness of music today is what’s most appealing to me. If I’m listening to a lot of indie music that’s been delivered digitally, then a lot of it is very fresh –20 to 30 days old at most.

Changing gears a bit, one of the things that Tag offers advice on is venture capital sourcing. Could you talk a bit about why investment in music has gone up recently, and where it’s gone up?
One of the sectors where you see a lot of investment in is things like Nimbit, Reverb Nation, and Tunecore because they don’t depend on licensing from the major labels. The big resistance that VCs (venture capitalists) have had toward music ventures has been they don’t want to invest ten million dollars in a start-up, only to see eight of it going to the labels [in licensing fees]. It’s just not smart business.

Do you foresee more direct investment in artists down the line? Something between VC investment and crowdfunding in terms of the size of the investment?
Those kinds of funds are already underway. There’s a few out there, if the numbers are right. On a very big scale, there’s a company in London called Ingenious that will fund an album, that will fund a video project, that will fund a number of different things. They’re the guys who backed Avatar. But they’ve also backed albums by various artists and they’ve backed video projects by various artists.

So you foresee that as something that’s likely to grow.
Yes, if the economics prove themselves out; if the people in there early start making some money, other people will start to take notice and get involved.

Let’s talk about licensing. It seems like that’s all anybody can talk about now: “Band-brand partnerships! That’s your new stream of income!” But often, the artists are basically these ripe fruits that larger companies just pluck off trees, take a few bites of, then drop to the ground. Is there a way for artists to defend against that, or strengthen their position?
It has become commoditized now, because there’s a lot of music out there. It used to be really hard to license music for film and television because the major artists were very expensive. But then some great indie music came along, and you wind up with shows like The OC, and The Hills, and Grey’s Anatomy, which are filled with it.

There’s a new company called Hello Music, and one of the things we’re helping them do is build relationships with music supervisors. One of the biggest issues is filtering through this stuff. What Hello Music is doing is sending packages to music supervisors at film and TV studios that say, “Of the 10,000 songs that passed through our site, we think these 200 are great.”

But is this combing going to be done by humans? Or do you think we’re headed toward a future where everybody at Hello Music has uPlaya on their desktops, and they’re just running user submissions through these algorithms? Should musicians be cognizant of that?
I don’t think algorithms are the answer. I’m not saying that it doesn’t work. Echo Nest uses algorithms and social behavior – what kind of music do your friends like, what’s happening on the music blogs, etc.  The combination of the two, the algorithm approach and the social approach, turned it into a winning system.

So you see it as a combination, in the future?
The problem with the algorithms is that by design, they find similarity. They don’t find uniqueness. If something is truly unique, it’s not matched to anything.  In the algorithmic approach if a band sounds a lot like Fall Out Boy, they’re going to get a high rating because of that similarity. But how do you find a band that doesn’t fit into those things? It’s challenging. It’s a great opportunity.

Finally, what aspect of the NMS are you most excited about?

We’re doing the tech summit, and we’ll be talking about what’s working and what isn’t. The most important thing to come out of this edition of the New Music Seminar is, really usable transactional advice. Not theoretical “in the future it’ll all be like this.” No, what’s happening NOW? How do you gain a competitive edge? We’re trying to make it so that in a competitive environment, people have the best weaponry.

Permalink: http://weallmakemusic.com/tag-strategic-founder-ted-cohen-on-branding-your-band-and-investments/

by Ted Cohen

By Ted Cohen

In the Holy war over copyright, the last few days have been pretty interesting. According to my scorecard, there have been two big wins for the content owners/copyright crusaders, with one major battle yet to be decided.

Let’s start with the battle that is playing out right now. On Monday, the announcement in the Hollywood Reporter that Voltage Pictures, the studio that produced the Oscar-winner, “The Hurt Locker” had signed on with the U.S. Copyright Group sent shockwaves through the BitTorrent file-sharing community. From the USCG website: “The US Copyright Group is a company owned by intellectual property lawyers that has one singular mission and focus: to stop movie copyright infringement and make illegal downloaders pay damages for the content they have stolen.

From Washington D.C. to Los Angeles, technology companies and a conglomeration of intellectual property law firms work hand-in-hand with each other to end unlawful downloading and illegal file-sharing of films.” This organization has already filed over 20,000 federal lawsuits against individual BitTorrent downloaders, with 30,000 more filings in the offing, making them an extremely formidable mercenary on this battlefield. According to The Hollywood Reporter , “The genesis of this legal campaign occurred in Germany when lawyers from the US Copyright Group were introduced to a new proprietary technology by German-based Guardaley IT that allows for real-time monitoring of movie downloads on torrents.”

And now the war has a very photogenic poster child in “The Hurt Locker”. This film won early critical acclaim, became a must-see in the Indie circles, and ended up besting James Cameron’s “Avatar” by taking home the Best Picture Oscar at this year’s Academy Awards. However, the film has been a financial failure, grossing just over $16 million dollars, making it the lowest grossing Best Picture ever by a wide margin. The picture leaked onto file sharing sites five months before release then had a major download resurgence after the Oscar win. While admittedly a challenging film for the mass market, the studio pegs a lot of its financial shortcomings on illegal downloading. From their perspective, they did everything right. They made a great movie on a tight budget, were recognized by the industry, but not rewarded at the box office. It’s a bitter pill and someone must be to blame. The film’s creators place a great deal of that blame on piracy, the courts will decide if they are right.

Meanwhile, the seamingly-endless battle between the music industry and LimeWire appears to have come to an end yesterday, with Federal Court Judge Kimba Wood handing down a summary judgement against both Lime Group, parent of LimeWire, and personally against founder Mark Gorton. Her 59-page decision stated, in part, “The evidence demonstrates that [Lime Wire] optimized LimeWire’s features to ensure that users can download digital recordings, the majority of which are protected by copyright, and that [Lime Wire] assisted users in committing infringement.” CNET’s Greg Sandoval wrote yesterday, “The court decision could represent the biggest threat to online file sharing in years. According to a survey by the NPD Group, LimeWire users account for 58 percent of the people who said they downloaded music from a peer-to-peer service last year.” While this battle isn’t over, LimeWire has been dealt a seemingly mortal blow. The next encounter will occur at a June 1st status conference with Judge Wood.

Lastly, there seems to be a truce in the long-running skirmish between the music industry and Project Playlist/Playlist.com, with the announcement of deals with both Universal Music Group and Warner Music Group, rounding out deals with all four majors, as reported by CNET News.com. While the financial terms were not disclosed, the general consensus is that this was a very expensive endeavor for Playlist, given the litigation and rhetoric that has surrounded the venture for the past two years. It’s also unclear whether they have settled with the formidable indie community, or with the publishers. There may need be a few more field maneuvers before this battle draws to a close. And will there really be a winner? Michael Robertson gets the last word:

“I wonder which of the following Playlist has in their settlement:

A) Multi-million dollar payment for past infringment.
B) Multi-million dollar upfront, non-recoupable payment to the labels
for future royalties.
C) Agreed to pay 1 cent per song stream.
D) Gave equity to the record labels.

If history is a teacher then it’s E – all of the above. Playlist bought themselves some time so they can stay in the game, but sadly I think they will go the way of Imeem.”

by Ted Cohen

By Ted Cohen

As I sit here at the end of an eventful year, it feels like we’ve made a lot of progress in digital music, but we have such a long way to go. My wish is that the gains we’ve made are the basis for the digital music landscape we’ve all dreamed of.

Digital services and devices I’m grateful for this year:

· Spotify
· B&W Zeppelin
· Motorola Droid
· Pacemaker Pocket DJ
· Twitter
· The Beatles on USB
· MOG’s $5 subscription service
· Roku
· The Flip HD
· Zune

Some of the people I’m grateful for, in no particular order:

· Peter Kafka
· Ann Sweeney
· Jeanne Meyer
· Jeff Pulver
· Karen Allen
· Peter Brodsky
· Mark Piibe
· Rio Caraeff
· Chad Hodge
· Sara Haze

All I want for Christmas is:

· Spotify availability in the U.S.
· A revamped Rhapsody (it’s really time for a make-over!)
· A streamlined licensing process from both labels and publishers for new
services
· ISP-based revenue streams for creators and rightholders
· More funding for innovative music start-ups
· Transparency in artist & songwriter royalty payments
· More communication, collaboration and coopetition between stakeholders
· 4G data service
· A digital music conference in Rio during Carnival
· The Apple music subscription service we’ve all been waiting for

A Happy Holiday break to us all, let’s get back to changing the world on January 1st!

by Ted Cohen

By Ted Cohen

For nearly four years, I’ve been evangelizing the transition of the music industry from a product-based business to a service-based economy. I’ve never viewed this as a possible scenario but as the only eventuality. It’s going to happen, it’s got to happen, now maybe sooner than later. With Apple’s acquisition this week of LaLa, the cloud-based music service that started out as a CD swapping marketplace, the Cuppertino giant appears to be making moves toward launching a cloud-based music service.

This will change the game forever.

As consumers have challenged the traditional value of music, the offerings have evolved from full-album digital downloads to a la carte track availability, pioneered by Liquid Audio and Rioport in 2000 and mainstreamed by Apple’s prime time launch of the iTunes Store in April ’03. While iTunes has done a brilliant job of serving the track-based economy, it’s been obvious that music fans want more: more value for their dollar, more information, more tools and unlimited access. Rhapsody and Napster have done a great job demonstrating the service value proposition, but have done a relatively poor job, as evidenced by their low subscriber numbers, of articulating/selling the offering to the masses. In short, Rhapsody is great but their success rate sucks. This is pointed out to me every time I rave about Rhapsody. I had high hopes when Rhapsody aligned with MTV and Verizon, but those dreams were dashed by recent rumblings that the partners want out of the deal.

As a very bright light, Spotify took Europe by storm this past year with their simple, clean and elegant ad-supported freemium model; the USA is currently petitioning the United Nations for equal treatment. At the same time, the economics around ad-supported models are being challenged. Under the current pay-per-play deal structure, the CPM’s necessary to provide profitability are difficult to maintain. As I stated in a previous TMV article, we need to move to a transparent revenue-share model to insure the success of these services. Apple has the necessary market muscle to force that move.

I’ve frequently joked that when Apple finally announces their subscription service, the public will wonder why it took Apple to invent the subscription model. While this might be amusing, it’s completely true. Apple’s ability to connect with consumers is awe-inspiring. They weren’t first with the portable music player, the portable video player, or the media-centric mobile phone, yet they own all three verticals by a large margin, an Apple music service offering should be no exception.

Glenn Peoples of Billboard sees it a bit differently. He states, “Apple appears to have bet on a digital music strategy that places ownership – no matter how ephemeral – over subscription.” I, respectfully, believe that it’s more of a hedged bet, cloud access to owned music AND subscription, the absolute best of both worlds.

It is in Apple’s best interest to offer subscription. With flattening iPod sales, a global footprint of over 200 million owners, an extra $10 a month per user would, even for Apple, represent a significant contribution to the bottom line. Apple’s current offerings in film allow for time-controlled content delivery to their portable devices, it is not a big technological leap for their engineering staff to apply the model to music. Even if only half of the devices in use support timed-out services, this could bring in $1 billion of additional monthly gross revenue.
This number should not be ignored by the stakeholders that will need to bless this hybrid model.

100 million users paying for music each month on a recurring basis!

Do the math, it is a no-brainer! It really blunts the excitement around a million-selling album, doesn’t it?

Currently, Simplify allows me access to my entire library of 75,000 tracks on any of my Macs or my iPhone. My Rhapsody account gives me 7 million more tracks wherever I am, but currently those are two separate experiences.

When I can finally access the music I own from ‘the cloud’ and combine my iTunes library with an all-you-eat subscription service on my iPhone, my vision of our digital future will be truly fulfilled.

After years of resisting efforts to offer music fans the ability to “rent” music instead of buying downloads, Apple is finally joining the party.

Apple’s (AAPL) purchase of online music service Lala brings the No. 1 music retailer into the streaming music business. Apple declined to discuss its plans for the service, and Lala officials didn’t respond to requests for an interview.

However, music industry analysts say the purchase is Apple’s realization that it needed to be involved in the “cloud” computing movement, which could eventually bring major changes to the iTunes Store.

“The idea of paying 99 cents a track to fill my iPod – I don’t need that anymore,” says Ted Cohen, a managing partner at TAG Strategic, a music industry consulting firm. “That era is over.”

For years, the music industry has advanced subscription services such as Rhapsody and Napster, saying they made more sense for the consumer and better profits for the labels. But the services have yet to find sizable audiences and, in fact, are losing subscribers.

But what has changed is the popularity of free streaming services, led by Pandora, which has 40 million monthly listeners worldwide. You can’t choose specific songs, but you can choose your favorite artists. Pandora then creates a music experience for you with similar-sounding music. Pandora is widely popular on the Web and on smartphones, including the iPhone.

Lala differs from Pandora and iTunes in that you pay to listen to online streams – at 10 cents a pop – instead of buying the song outright. Lala also lets you transfer songs from your hard drive to a Lala online locker, making the songs available for listening in other locations – say, via an iPhone, potentially.

It’s the locker that made Lala interesting for Apple, believes Paul Resnikoff, editor of the blog Digital Music News. “This expands how Apple delivers music,” he says. “You’re on a layover in Kansas, want to tap into your music collection and listen to some songs on your iPhone, and there they are.” If you like what you hear, Apple can sell you more music on the spot.

Other services offer similar features already – most notably Rhapsody – “But maybe Apple wants to do it themselves,” says Resnikoff. “What they’re doing is buying into a technology and engineering team and piecing together what the next step is.”

Lala started in 2005 as a CD-swapping service before shifting to music streaming. It got a major boost in November when Google chose it (and MySpace’s iLike) to power its new OneBox service, offering free one-time listens to songs directly in Google’s search results. Lala doesn’t charge for that service.

Inside Digital Media analyst Phil Leigh believes this feature is primed to take over the role radio once held in helping music consumers find new music.

“There’s no doubt this will become the successor to radio and be how new music will be popularized,” he says.

MidemNet 2010 is sixty days out & I can’t wait to be back in Cannes!

2009 has been an amazing year for digital and mobile music, some of the notable events & game-changers, in no particular order:

• Spotify
• Nokia’s ‘Comes With Music’
• Topspin
• Twitter
• Google Search Box initiative
• YouTube/Warner Music detente
• The iMeem fire sale
• The debut of Hello Music
• Ongoing drama with: Pirate Bay’s wind-down, Choruss, Q Trax, ISP Levies, Playlist.com, Michael Robertson & EMI

I look forward to spirited discussion around:

• The future of music as service
• The role of ISP as gate keeper and fee collector
• Artist Development in 2010
• Monetizing the live experience
• Creating new revenue streams

It’s going to be great seeing old friends & making new ones. The integration of MidemNet into Midem will finally join the present and the future of music, it’s time to stop the hand-wringing and winging and get on with it!

See you on the Croisette!