The Business Equation- Introduction.

Once upon a time the term "indie" applied only to small record labels. Then it applied to a form of music (often sold on major labels). Now it more properly applies to the thousands of musicians recording and selling their own music without any formal involvement from "the industry".

Once upon a time this would have been considered a form of "vanity publishing". This is despite the fact that any musician who plays a piece by themselves in their room- whether they are Jimi Hendrix or a complete beginner- is making music without any formal industry involvement. Is playing music for yourself an exercise in vanity? Is recording music and selling it to others who enjoy it vanity? Was it vanity when Elvis Presley walked into Sun records to cut a birthday record for his mother? Well, it probably was. That's not relevant. What is relevant is the quality of the output. Yes, most self-made records, whether professionally recorded or not, are of indifferent quality, because there is only so much talent and ability around. However, any underlying assumption that any real talent will be discovered and exploited by the record companies and the leftovers are not worth bothering with is deeply flawed- for at least three reasons. 1. The business model of the record companies. Record companies have to make money. This means that they have to ignore music that falls into certain categories, no matter what the quality of it: music with a severely limited audience (eg. modern classical music- any recordings are almost certainly made with government support on a non-commercial basis ), music that is too expensive (this is why certain big name groups that insist on racking up huge recording costs get dropped, despite having a large audience base), or, basically, any music that is unfinancial under their business model. If the audience is too small because it is undeveloped, the record companies may have to wait for an underground (read: indie) scene to grow before they get involved. If the music is unfashionable, the audience may have dwindled (leaving certain bands high and dry). This stuff isn't hard to understand. 2. Maybe some people don't even want to be involved with the crummy record companies anyway. There are a lot of musicians making more money independently off small audiences than they could make at a record company off a large audience. If you make a $500 000 video for a record company for a CD that then sells 20 000 copies....get ready to have a very low income for a long time. If you'd sold 20 000 copies independently and kept $5 per copy, you wouldn't even be in debt. 3. Historical experience shows that record companies support a lot of crap artists...some of whom make big money and some of whom bomb out big time at record company expense. And historical experience shows that record companies ignore many good artists. How many records did Robert Johnson make? Only a few, over the course of two sessions. Why? Principally because the record company saw his music as only being viable for a poor, Southern black audience ("Race Records"), and certainly wasn't going to throw the resources at him that a Bing Crosby got. Again, it comes down to money and the business model.

Possibilities are changing in the industry, though. This is principally because of the internet, which gives artists a global reach at minimal cost. Online retailers, Internet Promotion and so forth open up new possibilities. The principal possibility is for artists to reach a small and widely dispersed audience, selling a few CDs to a few select fans of, say, "free jazz punk with poetry recited in Gaelic". Then there is the possibility of artists making a good living from a wide fan base while remaining completely under the mainstream radar. The rise of Digital Distribution opens up even more profound possibilities, though. How long will it be before we see an "internet hit", a million selling song that is only available via download, a song maybe recorded and put up by a band at minimal cost, which makes them a cashed up success almost overnight without a single physical CD being sold? Not long, I think...After all, there is a profound point here. Why do these little plastic discs need to be manufactured and trucked all over the country if people can simply download tracks? The upfront costs of putting a track on a server are tiny, compared to the costs of manufacturing and distributing CDs to meet a vaguely anticipated demand. The difference in the equation is enormous, and will surely have huge repercussions in the industry over time.

Existing attitudes and assumptions are beside the point, though, because what is certain is that structures are growing to serve the genuinely independent community of musicians, particularly in the US. First there are the online retailers, such as CDBaby, which is now only one amongst possibly hundreds.. There is a resource publication, the Indie Bible, and a heap of online resources. There are promoters and publicists, book publishers and CD and merchandise manufacturers, and all of these people are seriously and intently pursuing the indie dollar. They make a point of dealing professionally and courteously with indie clients. And, with the global reach of the internet, they are available to and in competition for clients all over the globe, clients that can quickly assess their reputation and competitiveness via the internet, a medium by which the flames of discontent can spread with lightning speed and a careless move can trash a reputation overnight.

In other words, the Indie Game is quickly becoming serious business with the potential to boil up from below and startle the wider industry. This is all the more true when you consider the other independent movement that is happening, the movement to independent radio. I'm talking about internet radio here, although satellite radio is likely to go this same route. Internet radio outfits like Live 365 give people the chance to become independent DJs, with almost total programming freedom. This could quickly lead to underground networks of radio play, websites and online sales that could completely bypass and blindside the conventional industry. Did I say "could"? I mean will, inevitably, at some point. Live365 links tracks being played directly to legal downloads and online retailers, making that "online hit" a piece of cake.

The Distribution Equation

The Promotion Equation

Filtering

The Audience