When a crisis occurs, a council of thought leaders is appointed to define the problems, develop a recovery strategy, and carry out a comprehensive action plan for restoration. This document was created for this very purpose wi

With that in mind, let us identify the main problems that have threatened to destroy the vision that was born on the streets of Tin Pan Alley.  Here they are, finally, all in one place and in no particular order. 

1. 360 Deals

Music industry sales are down more than 50% from 1999’s record breaking year. Labels, publishers, managers, and other funding partners have adopted a new model of business for new artists, The 360 Deal.  The model allows for funding partners to extend their revenues into streams that have always been ONLY reserved for the artists (ticket sales & merchandise). This new model is the result of the financial strain caused by the devaluation of music forcing agencies and labels to consolidate and make cuts all across the board.  In the end, 360 deals strain everything and everyone, causing countless problems, yet they are a necessary evil for struggling funding partners.

2. Internet Radio

Internet radio providers cannot sustain growth due to the growing licensing fees for streaming music and the lack of clear revenue models. If revenue models could be clearly defined, additional innovative distribution outlets could provide a new paradigm in radio as a whole.

3. Web 2.0

Social outlets such as facebook, twitter, YouTube, Last.FM, MySpace, Ping, Google+, and other web 2.0 outlets provide easy and personal access to fans, yet the growing number of networks dilutes the overall marketing message and dramatically increases the time spent marketing.  Additionally, the same number of tools have been built to help musicians better reach their fans.  Innovation is grand, but oversaturation leads to confusion.

4. Apple

Apple has been an incredible innovator in the quest for a brighter music industry. We owe them a great debt. For the sake of being thorough however, their unprecedented market share in digital music sales, mixed with their unwavering business models, leave no bargaining room for funding partners (labels, publishers, etc.). Without the ability for competitive trials, growth and innovation in this important industry sector (digital music retail) is stifled.

5. Physical Music Sales

Physical retail stores have lost the ability to turn a profit unless attached to a one stop business model (i.e Walmart, Hastings, Best Buy, etc.). As a result the true music pushers, independent music retail stores, are almost extinct.

6. Traditional Radio

Traditional radio, though still an important promotional front, has lost much of its glory to the on demand world of iPads, iPods, satellite radio, and internet radio. It has therefore become increasingly more difficult for music marketers to predict buying trends without a standard radio format to follow. The result is a much higher risk/return ratio for funding partners (labels, publishers, etc.), which in turn limits the number of acts that ever see a major market entry.

7. Live Music

The recent merger of Live Nation and Ticketmaster has once and for all centralized the live music industry into what could become a monopolizing empire. This kind of power is usually never a good thing, as it limits the market’s growth potential and provides the opportunity to gouge prices due to the simple science of supply and demand. If they account for 90 percent of the live music business revenue, they control the market. We are not pointing fingers yet, but this music juggernaut could prove to be a problem if left unchecked by a lack of competition.

8. Lawsuits

In an attempt to combat the growing number of music pirates, The RIAA proclaimed war on piracy by means of civil suits with individuals who infringed upon copyright laws. Many average American citizens were made an example of with outrageous settlements in an attempt to create the perception of risk for stealing music to change consumer thinking. In the end however, it only generated the image of a “Greedy Recording Industry”.  This perception only furthers the divide and strengthens the pirates’ viral cause.

9. The Quality of Music

Quality music is lost to the average listener.  An MP3 strips musical data out of a song to reduce the file size to make it more accessible (as compared to the larger, better quality, full format WAV file).  The result is poor audio quality and a desensitized public.  This only furthers our problem with the devaluation of music.

10. The Product of Music

The product of music is no longer a viable revenue stream for musicians or music partners due to the accessibility of free music, both legal and illegal.  The result of this new shift in the value of music is the dissolution of 2/3 of the main revenue streams available to musicians and partners – record sales and publishing residuals (the third major source is tour revenue). New value propositions for buying music must be found to combat this growing problem, as well as the creation of new and innovative sources of income.

11. Media Sharing

Video and audio sharing networks act as a breeding ground for the spread of illegal music and music videos. The illegal networks cut into artists’ and partners’ profits by limiting sales. The legal media sharing networks act as a wonderful way for independent and major artists to receive viral promotion, but also limit sales via free streaming channels.

12. Independent Music

Due to the digitalization of music and the ease of distribution via the Internet, more and more recording artists are moving into the independent music space and forgoing partnerships with music labels and other seasoned music industry partners (publishers, managers, agents, publicists, promoters, etc).  This move allows for the artists to maintain control and keep all the profits.  Though this seems GREAT for the musicians, it limits the ability to enter the national marketplace for the majority of them who do not have deep private pockets backing their careers. The average independent musician is also inexperienced in the ways of music business, resulting in mistakes and oversights when it comes to the execution of plans, common practices, and legal matters.

13. Search Engines & P2P

Search engines offer the ability to find a free copy of ANYTHING via a torrent or p2p client in less than 1 minute.  Without regulations in place to prevent illegal downloading sites from appearing in the search results, stealing music will always be as convenient as buying or streaming. 

14. Piracy & Value

The only way to fully shut down music piracy would be to turn on “Big Brother” and violate very important privacy privileges. Therefore, it can never truly be stopped as long as we live in a democratic society. The solution must lie in the consumers’ thought processes.  Though it may appear that the RIAA is doing more harm than good, they have it right. The battleground is in the mind.

15. An Unclear Future

The music industry is now intimately and infinitely tied to digital and to the internet. The systems that govern digital music across the web are not yet fully realized by the core of the music industry. A clear vision for the future of these newlyweds (music and internet), has not yet been defined. The marriage is still rocky and working out its kinks. Without a clear understanding of this, it is hard for any organization in music to effectively plan for the future.

16. Music Education

The arts in schools (band, choir, orchestra, jazz, art, theater) have been cut back, scheduled after school hours, or eliminated entirely due to a weakened economy. The result, if prolonged, will be fewer musicians and music advocates, only furthering the devaluation of music as a whole.

17. Social Awareness

The average citizen is not aware of the current state of the music industry. Copyright law as it pertains to music may be obsolete or it may just need some reformation.  Either way the public needs to be made aware of what is happening in politics (as it concerns copyright), the difference between sharing and stealing, how piracy affects musicians, and so on.  The only ones who know we are in crisis are those who work in the world of music. The message must be championed and taken to the public.

Conclusion

We in the music industry are battling consumer thought. The public opinion has shifted to a place where music simply has no value.  The average Joe feels no fear or remorse for breaking copyright laws.  People buy bottled water, though it is available for free, because there is a value proposition; it is clean, cold, and portable.  We aim to rebuild the value proposition for buying music. At the Restoring Music Foundation, we are not disillusioned by the loftiness of our goal, but rather reconcile with the notion that for every problem there is already a solution.  They say it takes 8% of the public to agree on something new to shift the entire public opinion in a new direction.  We intend to be the catalyst.

Join the conversation: (#restoremusic)

Now that the crisis has been defined, let us no longer talk about the problems; let us instead talk of solutions.

By  the Restoring Music Foundation, and based upon a crowdsourced research document titled, "Defining the Music Industry Crisis".  Since the start of the project in 2007, the issues have been discussed in numerous professional music industry circles on LinkedIn (most notably within the well-respected Music and Entertainment Professionals group).  In the end, after thousands of comments and 7 subsequent editions, this article represents the 8th and Semi-Final edition.

To receive updates on future editions and other news as it pertains to the RMF's mission to restore the music industry subscribe to our blog.  Use the comments below to take part in this momentous undertaking by helping us crowdsource the music industry mind for the purpose of sustainability. 

Dear Music,

You have suffered. How? Why? What is the culprit at the core that started it all? A thought pattern, “music is free”. We at the Restoring Music Foundation believe the key to valuing you lies where it all began, a thought. The battle ground is in the mind. There is no going back and old thoughts will no longer do. It is time to reThink everything.

We would like to invite everyone in music to become a part of a global conversation for the restoration of music. The crisis has been defined, help us now talk of solutions. Many issues must be addressed, yet the true key to restoration lies in our perception of worth. Give music value once more and we have found our great and elusive tipping point.

Join the Global Twitter Dialogue

#MusicProblems – Are problems missing from The Music Industry Crisis Document?

#MusicSolutions – How can we solve the problems listed on The Music Industry Crisis Document?

By the Restoring Music Foundation, an LA & Nashville based 501(c)3, and part of a crowdsourced research project for the restoration of the music industry. Since the start of the project in 2007, the issues have been discussed all across Linkedin and in numerous professional music industry circles (most notably within the well respected Music and Entertainment Professionals group). Our intention with this Treatise is to let everyone in on the conversation. Get involved: #RMFSolutions.

7. Live Music
The recent merger of Live Nation and Ticketmaster has once and for all centralized the live music industry into what could become a monopolizing empire. This kind of power is usually never a good thing, as it limits the market’s growth potential and provides the opportunity to gouge prices due to the simple science of supply and demand. If they account for 90 percent of the live music business revenue, they control the market. We are not pointing fingers yet, but this music juggernaut could prove to be a problem if left unchecked by a lack of competition.

8. Lawsuits
The RIAA in an attempt to combat the growing number of music pirates, proclaimed war on piracy by means of civil suits with individuals who infringed upon copyright laws . Many average American citizens were made an example of with outrageous and bizarre settlements. The music industries’ minds were in the right place. They had intended to create the perception of risk for stealing music and in turn, change consumer thinking. In the end however, it only generated the image of a “Greedy Recording Industry”. This wall between the consumer and the industry has instead furthered the cause for this viral pirating trend.

9. The Product of Music
Quality music is lost to the average listener.  An MP3 strips musical data out of a song to reduce the file size to make it more accessible (as compared to the larger, better quality, full format WAV file).  The result is poor audio quality and a desensitized public.  This only furthers our problem with the value of music.

10. Media Sharing
Video and audio sharing networks act as a breeding ground for the spread of illegal music in the form of audio and videos. These new networks cut into the profits of funding partners (labels, publishers, etc.), yet act as a wonderful way for independent artists and major artists alike to receive viral promotion. In addition, simple mathematics states that all of the illegal media sharing portals can not be shut down. Lawsuits cost money and the recording industry doesn’t have much. Instead, the industry goes after the major outlets one at a time. But for every 1 that is shut down, 7 more are built in its place. Let us just say that this fire is out of control.

11. Piracy & Value
Let us not forget that stealing music is still more convenient to the average consumer than buying music. A twitter search for “pirating music” will result in hundreds of tweets (from just the past week or so), broadcasting their illegal violation to the world. Most people simply DO NOT think music has any value, they DO NOT feel bad about stealing, and they DO NOT care that it is illegal. The true battle lies in this dilemma.

In addition, the only way to fully shut down music piracy would be to turn on “Big Brother” and violate very important privacy privileges. Therefore, it can never truly be stopped as long as we live in a democratic society. The solution must lie in the consumer’s thought process. Though it may appear that the RIAA is doing more harm then good, they have it right. The battleground is in the mind.

12. An Unclear Future
The music industry is now intimately and infinitely tied to digital and to the internet. The systems that govern digital music across the web are not yet fully realized by the core of the music industry. A clear vision for the future of these newlyweds (music and internet), has not yet been defined. The marriage is still rocky and working out its kinks. Without a clear understanding of this it is hard for any organization in music to effectively plan for the future. 

Conclusion
We in the music industry are battling consumer thought. The public opinion has shifted to a place where music simply has no value.  The average Joe feels no fear or remorse for breaking copyright laws. People buy bottled water, though it is available for free, because there is a value proposition; it is clean, cold, and portable.  We aim to rebuild the value proposition for buying music. At the Restoring Music Foundation, we are not disillusioned by the loftiness of our goal, but rather reconcile with the notion that for every problem there is already a solution.  They say it takes 8% of the public to agree on something new to shift the entire public opinion in a new direction.  We intend to be the catalyst.

Now that the crisis has been defined, let us no longer talk about the problems; let us instead talk of solutions.

By Chris Purifoy, Co-founder of the Restoring Music Foundation, and based upon a crowdsourced research document titled, "Defining the Music Industry Crisis".  Since the start of the project in 2007, the issues have been discussed all across Linkedin in numerous professional music industry circles (most notably within the well respected Music and Entertainment Professionals group).  In the end, after thousands of comments and 6 subsequent editions, this article represents the 7th and Semi-Final edition.

What can be done when the whole process of buying or stealing music is based on the honors system?  There must be a STRONG catalyst to force public opinion back in the other direction.   The true question we need to ask is, how do we give listeners a reason to value music again?   Artists, record execs, retailers, and fans must be willing to have an open mind to the general consensus for change.  Everyone who listens to music is responsible for fixing it.  That means YOU!  It will take some time, but change is within reach. 

Under crisis the solutions must be easy for everyone involved in the transition to understand. The solutions must present a radical change from normal patterns. They must be loud enough to force everyone to turn their heads and take notice because it is going to take everyone agreeing on the notion of change to truly make a difference.  Most importantly, we must all learn to be servants as well as capitalists and consumers.  We truly believe that in the end it all boils down to that.

Like what you see?  Use the comments below to tell us about it...

We have been working on a document entitled, Defining the Music Industry Crisis, for some time.  It has been through 5 editions prior to this new version.  Each addition was edited based on feedback from our extensive network of music industry professionals.  This version (the 6th edition) has been retitled, The Last Word on the Music Industry Crisis.  It is in a pdf form as it has been picked up by an entertainment magazine with a July release. print it, download it, share it!!  The full version is available below.  Enjoy!!

 The below document is best viewed in full screen or downloaded and viewed on your computer.

Like what you see?  Use the comments below to tell us about it...

 THIS ARTICLE IS OUTDATED, SEE NEW EDITION.

“To every problem there is already
a solution whether you know it or not.” 

                                                   -Grenville Kleiser 

 In politics, when a crisis occurs a council is appointed to define the problems. A document is then outlined, written, and continuously amended. It is only after everyone agrees on the problems that solutions can be developed and implemented.

With that in mind, this document is meant to identify the main problems that have threatened to destroy the vision that was born on the streets of Tin Pan Alley. The following list is in no particular order but rather listed for the sake of finally getting them all in one place. I urge readers to use the comment board following the article to get involved in the process.

1. Internet Radio

Internet radio providers can not sustain growth due to the growing licensing fees for streaming music and a lack of clear revenue models. New distribution outlets could provide a new paradigm in radio as a whole if revenue models could be clearly defined.

2. 360 Deals

Music industry sales are down more than 50% from 1999's record breaking year. Labels and other funding partners have adopted a new model of business, The 360 Deal.  The result is less money for growth and less focus for individual partners. One partner does the job of 5 partners, many of which only have experience in one of the five fields. In the end 360 deals strain everything and everyone causing countless problems yet they are a necessary evil for struggling funding partners.

3. Web 2.0

Social networks and other web 2.0 outlets provide easy and personal access to fans yet the growing number of music networks dilutes the overall message and dramatically increases the time spent marketing.

4. Apple

Apple has been an incredible innovator in the quest to a brighter music industry. We owe them a great debt. However, their unprecedented high market share in digital music sales mixed with their unwavering business models leave no bargaining room for funding partners (labels, publishers, etc..). Growth and innovation in this important industry sector (digital music retail) is therefore stifled without the ability for competitive trials. In addition, Apple's 30% take on each track sold leaves little for artists and songwriters.

5. Physical Sales

Physical Retail stores have lost the ability to turn a profit unless attached to a one stop business model (i.e Walmart, Hastings, Best Buy, etc.). As a result the true music pushers, independent music retail stores, are almost extinct.

6. Traditional Radio

Traditional radio, though still an important promotional front, has lost much of its glory to the on demand world of iPads, iPods, satellite radio, and Internet radio. It has therefore become increasingly more difficult to predict market trends without a standard radio format to follow. The result is a much higher risk/return ratio for funding partners (Labels, Publishers, etc..), which in turn limits the number of acts that ever see a major market entry.

7. Live Nation (Updated in this edition)

The recent merger of Live Nation and Ticketmaster has once and for all centralized the live music industry into what could become a monopolizing empire.   This kind of power is usually never a good thing, as it limits the market's growth potential and provides the opportunity to gouge prices due to the simple science of supply and demand.  If they account for 90 percent of the live music business revenue, they control the market.  We are not pointing fingers yet, but this music juggernaut could prove to be a problem if left unchecked by a lack of competition.

8. Lawsuits

The RIAA in an attempt to combat the growing number of music pirates, proclaimed war on piracy by means of civil suits with individual copyright infringers. Many average American citizens were made an example of with outrageous and bizarre settlements. The music industries' minds were in the right place. They had intended to create the perception of risk for stealing music and in turn, change consumer thinking. In the end however, it only generated the image of a "Greedy Recording Industry". This wall between the consumer and the industry has instead furthered the cause for this viral pirating trend.

9. Media Sharing

Video and audio sharing networks act as a breeding ground for the spread of illegal music in the form of audio and videos. These new networks cut into the profits of funding partners (labels, publishers, etc.) yet act as a wonderful way for independent artists and major artists alike to receive viral promotion. In addition, simple mathematics states that all of the illegal media sharing portals can not be shut down. Lawsuits cost money, and the recording industry doesn't have much. Instead, the industry goes after the major outlets one at a time. But for every 1 that is shut down, 7 more are built in its place. Let us just say that this fire is out of control.

10. Piracy & Consumer Value (Updated in this edition)

Let us not forget that stealing music is still more convenient to the average consumer than buying music.  A twitter search for "pirating music" will result in hundreds of tweets (from just the past week or so), broadcasting their illegal violation to the world.  People simply DO NOT think music has any value, they do NOT feel bad about stealing, and they DO NOT care that it is illegal. The true battle lies in this delima.

In addition, the only way to fully shut down music piracy would be to turn on "Big Brother" and violate very important privacy privileges. Therefore, it can never truly be stopped as long as we live in a democratic society. The solution must lie in the consumer's thought process. Though it may appear that the RIAA is doing more harm then good, they have it right. The battle ground is in the mind.

11. An Unclear Future

The music industries, both production and business, are now intimately and infinitely tied to digital and to the Internet. The systems that govern digital music across the web are not yet fully realized by the core of the music industry. A clear vision for the future of these newlyweds (music and Internet), has not yet been defined. The marriage is still rocky and working out its kinks. Without a clear understanding of this it is hard for any organization in music to effectively plan for the future.

12. Music History (Updated in this edition) 

Music is a form of evolution.  It has evolved in the US from the Jubilee singers at the turn of the 20th century, to the discovery of jazz and blues across the southern US, to the Rock and Roll King at the center of the century, to the British invasion in the 70's, to MJ's invention of the pop machine, to U2's purification of LOVE from the 80's till today.  In 1999 the pop machine was FULLY realized with record high sales by N'Sync, Brittany Spears, and the lot.

Maybe the majors simply lost sight of this rich history of music.  They began generating factory made pop revenue vehicles out of highly conditioned Mickey Mouse Club alumni. The industry hit a record high and the system simply broke.  "But alas, to err is human."  Let us not make the same mistakes again and remember that music is art before it is a pay check.  1999 is also the same year the market was freed by Napster. Ironic?  Maybe...

Also, the masses need to be educated on our countries rich history of musical genius.  The average US listener has very little knowledge of what GOOD music sounds like.  Help us educate them!

Conclusion (Updated in this edition)
We have been working on this project for more than a year and a half, which finally brings us to what I feel is a complete document. Your feedback has been golden along the way, I couldn't have done it without you.  We will no longer talk of problems (unless something new arises).  

This document will now be used to write a comprehensive restoration plan.  We have 5 council members so far and we are looking to recruit 15-20 other key thought leaders in industry.  Stay tuned for more details.  PLEASE use the comments below to let us know if you agree.  Is this a comprehensive list of our problems?  

Are you a blogger, journalist, or PR person?  PLEASE republish this document and help us spread the word in the press.  We MUST build our notability to get the attention of the thought leaders who NEED to be apart of this important cause.  HELP US!  Drop us a line if you do...

Everytime you illegally download a track, you kill another one.

There is NO budget to develop new artists in 90% of the Indies.
Labels, on average, have reduced their staff by 50% in the last 5 years.
It only takes 5000 sales of a single on average to enter the top 30. (It used to be at least 30,000)
The last Motorhead album reached #30 on sales of 3500 (1st week sales).
If you sell 200 copies of a CD from a new artist, you've done well.
You only need sales of 650 singles to enter the Top 75 (1st week sales).

Sobering enough?

Peace,

Frenchy

Our goal is to gather 100 facts just like the one above.  We will use them in the coming years in our National Music Industry Crisis Awareness campaign.

The Restoring Music Foundation's first universal business model.

Music By: Mike Anderson.
Free Album: MikeAndersonSound.com