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Why the Traditional A&R Process Is Failing the Industry & Musicians Alike

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Why the Traditional A&R Process Is Failing the Industry & Musicians Alike Why the Traditional A&R Process is Failing the Industry & Musicians Alike …and how to fix it A position paper for music labels, music publishers, music supervisors, managers, radio program directors, producers, music bloggers, advertisers, and all musicians By Mike McCready New York, October 2011 It isn’t news that the past decade has brought tumultuous change to the music industry. Advances have primarily impacted the way music is accessed, distributed and paid for. But, few companies in our sector have harnessed technology to its full extent to optimize their business processes. While most music companies have incorporated data mining and social trending statistics into their discovery processes, the fundamental way the industry sources new songs and talent has remained unchanged. Isn’t it time we re- think how we conduct A&R? Mike McCready - Co-founder & CEO Music Xray We think of A&R as the process by which we find and help create great musical products. In reality, A&R’s primary business function is to reduce risk by identifying or creating highly compelling product and managing promotion efforts to reduce the likelihood of failure in the marketplace. So, in terms of risk reduction, traditional A&R was only adeQuate when the business climate afforded companies the luxury of having occasional successes compensate for far more freQuent flops.1 In today’s new music business, narrower margins, smaller budgets and fragmented audiences reQuire a more efficient approach than primary reliance on golden ears and talented gut instincts. Additional and supplemental tools are needed to create success more often than failure, or at the very least, improve success rates to a more manageable level. By devising a comprehensive 21st century A&R platform which combines and harnesses all the advances in technology, data mining, and our global interconnectivity, natural talent identification abilities can be enhanced, strengthened and amplified. This will increase efficiency, hone accuracy, offset costs and reduce risk. 1 According to NPR, which polled a number of industry experts to determine the real cost behind a top-charting hit. In this case, it was Rihanna's recently-created "Man Down," a big-budget, blockbuster-style blowout that remains unproven. The breakdown: Writing Camp (Per Song): $18,000 · Songwriter: $15,000 · Producer: 1 Independently of how music is ultimately consumed and its creators compensated; among the many other changes our industry is adopting, in order to thrive again, we must develop a better way to conduct A&R and more efficiently pair musicians with the right business teams in a way that increases the likelihood of success and reduces the cost of failure when it occurs. The challenges faced by A&R professionals Under the traditional system, many A&R professionals limit their intake of new music to trusted contacts and their referrals. Even so, they must listen to large amounts of music that most of the time isn’t of interest. They have to keep track of who submitted what, deal with overflowing and sluggish email accounts and/or stacks of CDs. Often, they are relentlessly pursued, hounded, called, emailed, ambushed and otherwise hunted-down by almost everyone from whom they’ve received music for their consideration. These and other issues involving legal concerns2 are precisely what led so many companies to actually close their doors to music submissions from people with whom they don’t already have working relationships. These inefficiencies and policies of not accepting unsolicited material have shut out countless independent musicians, deprived the industry and audiences of some very worthwhile music, and created a community that operates, to a large degree, based on who you know. Talent gets through but only after an inefficient, inconsistent and archaic filtering process that leaves behind worthy talent and often lets through over-rated product that has short life spans and damages the industry’s credibility in the long term, much like what happened to the American auto industry in which reduced-Quality combined with high prices over time eventually created negative customer sentiment. Inefficient A&R process: Additionally, in the Quest to find acts with the highest potential, A&R professionals spend valuable time trolling the Internet, jumping from site to site trying to be the first to spot the next big thing. The Shazam charts, blogs, Hype Machine charts, BDS, YouTube, and Mediabase are all consulted by A&R professionals. Some of these sites are designed for tracking the impact of promotion campaigns and weren’t even built to be used as A&R discovery tools. The data they provide is useful but not usually 2 Mostly, legal concerns involving lawsuits alleging copyright infringement. This topic is addressed later in this document. 2 aggregated in one place. Many of them only provide insights regarding performing acts, ignoring millions of emerging songwriters and acts from rural areas which don’t have access to wide audiences despite their Quality. Most importantly, almost all of them provide trailing-indicator data – meaning they track trends that have already occurred and therefore spot songs and acts that already have traction. There’s less business-gain to be realized when getting into the game once an act is empirically demonstrating signs of viability. Backing the act at that point is mostly a matter of money. By that time, the act has become the gatekeeper – able to choose the business team with which to surround itself. This kind of strategy gets the business teams into the game at a later stage, fosters competition among business teams and sometimes even bidding wars, driving up costs for all. Even worse, this process does not leverage business’s greatest strength; becoming a catalyst for the acts and playing a significant role in creating the difference between success and obscurity. Frankly, that strategy is more about opportunism and speculation than it is about being a good corporate citizen in our industry. Don’t get me wrong. As with any business opportunity, getting in early while taking measures to control risk enables professionals to rightfully harvest significantly higher returns. And that’s the key; having the tools that enable you to get in early with decreased risk. By focusing on trailing-indicator data, talent investors run unfocused, expensive and hit & miss businesses. Most A&R professionals use these types of tools but it’s only because they are the best tools available – not because they are deemed to be so effective.3 The challenges faced by musicians On the other side of the coin, for musicians and their managers who do not have pre-established relationships with the gatekeepers, it has always been a frustrating challenge to have their music considered for deals. It’s messy, resource-sucking and often unpleasant for them to spend massive amounts of time, effort, and money finding available deals and opportunities, pursuing them, following up, calling in favors, networking and building relationships just to get a song heard with only a sliver of a chance of actually securing a deal. The digital age has only exacerbated these challenges. The cost of recording has fallen due to advances in technology and its ubiQuity. Aspiring musicians have multiplied into the millions – many of whom create fantastic music but lack the business skills and contacts necessary to ever reach industry ears. This has 3 This data was collected by the author after consulting A&R professionals at EMI, Sony Music Entertainment, Warner Music Group and several large independents labels. 3 created an unprecedented bottleneck of artists wanting to have their music considered for commercial and exposure opportunities: the kinds that reQuire an A&R professional to evaluate the music and make decisions. The result is millions of musicians feeling shut out and jaded. Why have there been no good solutions? As recorded music sales have plummeted over the past decade, the immediate need has been to stop the bleeding. If the bleeding were stopped, the inefficient A&R process was no more of a problem than it had been in the past. The few successes paid for the flops in a way that, while not ideal, worked. Additionally, there is almost no outside pressure in our industry to explore alternatives to what have always been considered best-practices. When poor business decisions are made, livelihoods and careers fail. By contrast, take the medical profession as an example. When best practices aren’t continuously researched, studied and adopted, lives are lost and the general welfare is affected. In the music business, bad practices do not transcend the impact on the reputations of those executives involved in the bad decisions. Thus, we observe the impact of poor business execution only in the revolving doors at the music companies. What’s more, there has traditionally been more glory earned by executives who attribute their successes to instinct and craft. Not unlike the mystiQue surrounding a professional athlete. Many industry executives like to keep Quiet about the “secrets of their success” and the tools they use to obtain it. It is, after all, a competitive business. It’s not that new methods haven’t been tried. But rarely have they been fully tested and implemented across the board so that their impact could be measured over time. A few that have; such as call-out testing and focus-group research are no longer delivering game-changing results. It is with the use of those type of tools that the industry continues to see abysmal success rates. More and better tools are needed. What are the costs of inefficient A&R? The industry has come to terms with the idea that a re- examination of all aspects of the business will be necessary in order to create vibrant and robust music companies.
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