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Music Cover.Qxp 8/29/2012 5:20 PM Page 1 Music Cover.qxp 8/29/2012 5:20 PM Page 1 FALL 2012 ® Duo’s tale an example of Detroit finding its groove in today’s music biz | More inside Hear. And now. Use the QR codes at right to check out two video reports Studios and the state of the art Meet Dale Earnhardt Jr. Jr. from Crain’s about the business of music in metro Detroit. Learn about The energetic Here’s how: the latest Detroit duo 1. Open your favorite “QR code scanner” application on your movement in has indie-pop smartphone, or download one for free from the iTunes Store or the recording fans’ hearts Google Play Store. industry from racing. How’d 2.Point your phone’s camera at the code and scan. The code Detroit studio they get their will bring you to a mobile site where you can watch and listen. producers. start? 3. Enjoy! Related story, Interview on Page M2 Page M8 DBGateFlap.qxp 8/28/2012 12:34 PM Page 1 DBGatespread.qxp 8/28/2012 12:23 PM Page 1 The home and future of great music and industry. 7%!s!$!s7!2.%2"2/32%#/2$3s!4,!.4)#2%#/2$3s7!2.%2-53)#.!3(6),,% 2()./2%#/2$3s./.%35#(2%#/2$3s#52"2%#/2$3s%,%+42!2%#/2$3s3)2%2%#/2$3 3)$%/.%$5--92%#/2$3s2)3%2%#/2$3s"%''!23'2/50s8,2%#/2$3s&2)$!9-53)# DBGatespread.qxp 8/28/2012 12:23 PM Page 1 The home and future of great music and industry. 7%!s!$!s7!2.%2"2/32%#/2$3s!4,!.4)#2%#/2$3s7!2.%2-53)#.!3(6),,% 2()./2%#/2$3s./.%35#(2%#/2$3s#52"2%#/2$3s%,%+42!2%#/2$3s3)2%2%#/2$3 3)$%/.%$5--92%#/2$3s2)3%2%#/2$3s"%''!23'2/50s8,2%#/2$3s&2)$!9-53)# 20120903-SUPP--0001-NAT-CCI-CD_-- 8/29/2012 4:05 PM Page 1 FALL 2012 CRAIN’S DETROIT BUSINESS Page M1 Same old song? Not anymore, as new beat drives Detroit music biz usinesses in metro Detroit forced to your window to the world.” adapt in an industry that has changed Yet this region has a vibrant patchwork of music- ONE HU G ND IN R T E forever ... oriented businesses. And they’re finding new rev- A D R Y B E E Seems like we’ve heard that one be- enue streams — merchandise and ticket sales — to A L R E S fore, in automotive, health care and make up for dollars that once came from the sale of C 100 even banking. CDs and vinyl. Artists now think like entrepre- Now, Crain’s tells the tale for music neurs. Crowd-funding has become a way for per- — an industry that in many ways put formers to raise money from fans. DetroitB on a global map. Detroit’s music scene can be a bigger part of the This special report on Detroit’s evolving music in- local economy. Nashville uses music as the back- dustry shows how music-related businesses are adapt- bone of a growing economy, and it doesn’t have the ing. It’s a look at potential for growth, as old business- history Detroit has. es look at new business models. A great example of the evolving music businesses And this report is a debut of is Mack Avenue Records. This Detroit-based company greater coverage an industry that is replacing sales-oriented revenue with merchan- other cities — Austin and Seattle dising revenue. And it’s trying to harness the social — have used as a big part of the media outlets rather than purely compete. local economy. As writer and pro- Pandora and Spotify are the kind of services that fessor Richard Florida points out on take the place of CD sales. But, said Mack President M9, cities that are open to new Denny Stillwell, they’re still playing Mack songs. sounds are often open to new “There continues to be a broad range of opportu- technologies and businesses. nities to expose music even as our industry pulls it- “Motown, Mitch Ryder and the self out of one of the worst periods in its history,” he Florida Detroit Wheels, the MC5, Iggy Pop said. “One of our challenges is to be in the best posi- and the Stooges, Bob Seger, Kid Rock, Eminem, the tion to take advantage of those opportunities.” White Stripes, electronic music pioneers — they de- And maybe the next chapter is the region taking fine Detroit in the popular imagination as much as advantage of opportunities, as well. do cars and the Motor City,” Florida said. “Music is — Daniel Duggan, deputy managing editor 00 SAVE $100 OFF Tracks Exporting Sites for sounds Detroit A list of the venues of metro Detroit, the capacity and big shows. Making money Page M10 in Detroit proves to be much harder Venues: than making money from Looking Detroit. Artists who built a Ronnie Euro back following What’s outside the region. Veteran music Shawn Neil and Jeff Wenzel Page M6 writer Bill of Groovebox Studios Holdship on the great venues of that metro Detroit’s history. In the studio Page M13 ticking The idea of just recording tracks for artists’ CDs is no longer viable for studios. A look at the new reality and Venues: Looking ahead sound? business models in metro Detroit. Performance venues have needed to Page M2 adapt and find new revenue streams. Given the changes Page M14 On the in the financial marketplace, Dale Earnhardt Jr. Jr. Music festivals your life insurance policies may not label be performing as intended. Considered an up-and-coming band A guide to the major music festivals With a with Detroit roots, the duo discuss in town. What’s their niche, and A periodic analysis and review can: decline in their business and how it’s changed. what’s up next? sales for Page M8 Page M15 local music Save premium dollars labels, companies Improve, extend or guarantee your coverage have found Will the money come? Angie and Tom Linder About this project Generate cash other Austin, Texas, and Portland, Ore., of Detroit Techno revenue Militia have built economic growth Editor: Daniel Duggan, deputy Make sure your plan is on track streams to around their music managing editor, Crain’s Detroit replace what’s been lost. industries. Business Page M5 Detroit Design: Jeff Johnston, senior hopes to do designer, Crain’s Detroit Business Call for a complimentary analysis and review. the Copy editors: Gary Piatek, senior same. editor; Jeff Johnston; Tracy Balazy; and Ed Bradley, Crain’s Detroit Page Business M9 Cover photo: Nathan Skid, Crain’s BIRMINGHAM, MI 248.731.9500 WWW.SCHECHTERWEALTH.COM Detroit Business 20120903-SUPP--0002-NAT-CCI-CD_-- 8/29/2012 3:48 PM Page 1 Page M2 CRAIN’S DETROIT BUSINESS FALL 2012 It used to be you go into a studio, make an album, and that is what you sell. Now, the band is the product, and all the media it creates are talking points. Shawn Neil, Groovebox Studios Industry in transition has studios changing their tune Fan-driven business models shift focus from cutting demos BY NATHAN SKID The problem is, be it downloads, CRAIN’S DETROIT BUSINESS streaming Internet radio or a subscrip- tion-based model, digital music doesn’t obody has to tell Jeff Wen- have the same earning power as its phys- zel and Shawn Neil that ical counterpart. the global changes in the Entertainment lawyer Howard Hertz, music industry are im- founder of Bloomfield Hills-based Hertz pacting businesses in De- Schram PC, said that even though Nap- troit. ster’s free music model didn’t last, the The co-founders of De- change in the perceived value of the in- troit-based Groovebox Stu- dustry’s product and purchasing habits Ndios somehow manage to crack a of consumers did. smile as they talk about the “When people all of a sudden had a storage unit where 5,000 of choice of free music or paying $18, they their former band’s CDs sit went for free,” Hertz said. “By then, the wrapped in plastic, collect- toothpaste was out of the tube, and it’s ing dust. too hard to get back in.” The Sugar People’s un- Now musicians look to do-it-yourself wanted CDs serve as a recording sessions, bands are becoming signpost to what they call social media marketing experts, record- the “delusion of the music ing studios work on singles instead of al- industry.” bums, and in some cases crowdsourced From 1999 to 2005, Wenzel funding is replacing development money believed that if he could just from labels. get his band’s album into a Those same labels are scouring social major retailer, it would lead media pages for the next hot act instead to a record deal. of sending scouts on the road. Wenzel persuaded Min- So what do those challenges mean for neapolis-based Best Buy Co. to Motown — the city, not the label — with carry the album. It flopped, its deep musical history of heavyweights selling just 20 copies nation- like Diana Ross, Bob Seger, Kid Rock, wide. Aretha Franklin, The White Stripes and But it set the pair up to use Eminem? their experience to create a new model for aspiring musicians. Groovebox uses crowdsourced A disruptive force funding to cover the $600 cost for a Groovebox Studios is Wenzel and live recording session in front of a Neil’s answer to more costly recording paid audience.
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