Lefsetz Letter Blog Archive Re-Nettwerk

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Re-Nettwerk
Hey Bob, While I certainly appreciate your thoughts and comments on the new artist label model that we here at Nettwerk are pursuing for several of our managed artists, I wanted to offer up a slightly different perspective to you and your readers, one that focuses on the ARTISTIC merits of this model in tandem with the BUSINESS opportunities that come along with it. First, let it be said that the artist label model is denitely not for everyone, but Ive found it to work extremely effectively, especially for artists who arent superstars based on size of their fan and sales base. Business models aside, I think the success of an artist still comes down to the power of a song, or a body of work. The types of songs and the types of artists we deal with will always dictate the situation that works best for them. Some artists and songs will always thrive in the major label system, while others enjoy success of a different type at the independent level. When I came into the Nettwerk Management team last year as they opened up an ofce in Nashville: I brought in an artist, Josh Rouse, who was coming out of a long term deal with Rykodisc after completing 5 full length albums, a DVD and 3 EPs in 8 years time. Now, conventional wisdom would have pointed us in the direction of a major label route (given Joshs history and untapped sales potential), but Josh felt compelled to grab hold of his career: looking to retain ownership of his art and control over how it was marketed. While we had interest from some very credible labels (both major and indie), none of them could offer opportunities similar to what Terry and Nettwerk presented to us under this new artist label model they were setting up (based largely on their experiences with BNLs Christmas album). Feeling we had what it takes to sink our teeth into embracing the elements of releasing a record for ourselves (within the wonderfully support system that Nettwerk has pulled together, including DSP and distribution relationships) we released Joshs 6th album, Subtitulo, in March of this year. And Im happy to say, Joshs new artist label, Bedroom Classics, has NETTED him (note I said net, not gross) earnings that surpass any advance he could have hoped to receive from a major label deal at this timeand all within the rst 6 months of release!!! Plus, he retains ownership of his master and can thus participate 100% in all master revenue streams (digital, streaming, synch licenses, etc..) for perpetuity, thus creating equity in his own career. And, thats above and beyond the other areas of income, from publishing, PRO royalties, touring and merchandising. And while some would argue that were only feeding his existing fan base and not allowing him opportunities to expand that base, weve been able to grow his touring business both domestically and abroad (including an upcoming run of dates supporting John Mayer, which comes 10 months into the life of this current record). You made use of the axiom "Youve got to GIVE a little to GET a little, if not a LOT!". And to that Id say that in these seas of change, it seems like the major labels are increasingly reluctant to adapt to the times and give up anything and are still asking for a LOT (if not everything) from the artist. Digital rights in particular are a major point of contingency; given the fact that some labels still dont account for all of their digital earnings (both downloads and streaming) in their artists royalty statements. In the artist label model, the artist often sees that money on a MONTHLY basis (we recouped our initial investment in Joshs current album within 2 monthsbased on our iTunes sales alone!!!). No telling how long that revenue would have taken to come down stream to him

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Lefsetz Letter Blog Archive Re-Nettwerk

http://lefsetz.com/wordpress/index.php/archives/2006/12/01/re-n...

under a traditional record deal. In an era where A&Ring and true career development at major labels have become increasingly rare, the new artist model allows us to maybe not grow things by the leaps and bounds that an inux of tremendous money can bring, but in a way that ensures that the growth of an artist on a number of fronts will never cease. What Ive learned now, as a manager that basically runs an indie label for a select group of my managed artists, is that there are two areas that you need to balance for your artists, one being their ARTISTIC vision (and the freedom to explore that without the constraints or outside objectives that a label might bring to the table) AND the ability to secure and develop a solid BUSINESS around that vision that helps propel them along in a career which allows them to continue to hone their craft. Thus, this vision that Terry has and that Nettwerk is exploring with many of our artists is one of ARTISTIC merit and can be applied (with great success) to a number of artists at different levels, and to an effect that is rewarding for everyone involved (rst creatively, and secondary, as a business venture). And having the opportunity to align that vision under one umbrella (as a manager) allows for us to re-envision, rethink, and adapt in ways that grow our artists into career artists. Christopher Moon Nettwerk Management By: bob | 2006/12/01 | Music Business | Trackback | Comments [RSS 2.0]

3 Responses to Re-Nettwerk

Comments
1. Elliot Cahn Comment by Elliot Cahn | 2006/12/04 at 12:55:07 About 5 years ago, a client of mine did a deal with Nettwerk Records, and Terry McBride offered the choice of a normal record deal or a 50/50 split of all net income sources, including touring income. My kneejerk reaction was to reject the 50/50 split immediately with some wisecrack abou twhat drugs he might be smoking, and we eventually did reject it, but before I did, I sat down with a spreadsheet, checked Sarah McLaughlans Soundscan sales from her prior album, talked with some agent and merchandiser friends, and estimated what she would have made in her last album cycle under a usual record deal and under a 50/50 net split of all income sources arrangement, and was amazed that they were within about 5% of each other. Obviously this will vary from artist to artist, but it was interesting. 2. Bryk Comment by Bryk | 2006/12/04 at 12:55:22 The unfortunately ip side of this scenario is that my girlfriend Erin is a big fan, has all of Joshs Ryko albums and had NO IDEA he had a new record out this year. You might ask, doesnt she subscribe to the artists list? Some people (like Erin) dont _want_ to be on 100 different email lists or get daily text message updates from every single artist they like. (She might not even know how to send a text message, and she doesnt care!) I think she represents a lot of people in their 30s who are busy adults, they have _lives_, they dont want to have to hang out on myspace and get spammed to death by losers just to hear about artists they like. They might just want to read in the weekly paper that the artist has a new record out and is touring in their market. Oh fuck, thats the OLD MUSIC BUSINESS PARADIGM. Whoops! (Well see how many tracks all these text messaging kids actually pay for when theyre 35. They seem to be able to pay their Cingular and Road Runner bills every month though.) One more example: A few years ago I thought I signed up for an Elvis Costello "New Releases and Info" list from his ofcial website. For a few years I was subjected to emails about EVERY SINGLE "alt rock" artist on IDJ (like I

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Lefsetz Letter Blog Archive Re-Nettwerk

http://lefsetz.com/wordpress/index.php/archives/2006/12/01/re-n...

give a FUCK that Hoobastank even EXIST), and after the 500th non-EC-related email I nally unsubscribed. Elvis Costello might have released 5 albums by now and I wouldnt know it. And while I know how and why that happened from a label perspective, god knows how many EC fans UMGs stupid ass internet marketing department alienated because they were GREEDY with info they were entrusted with.

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1. FISTFULAYEN Blog Archive Artist Control Equals Money In Their Pockets Pingback by FISTFULAYEN Blog Archive Artist Control Equals Money In Their Pockets | 2006/12/31 at 13:27:55 [...] wrote a great letter to Bob Lefsetz about the success of the artist label model for Josh: http://lefsetz.com /wordpress/index.php/archives/2006/12/01/re-nettwerk/ A [...]

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