In or Out: An Analysis on the consequences of Outsourcing in the Music Industry ______________________________ A Senior Thesis Presented to The Faculty of the Department of Music Business, Entrepreneurship and Technology The University of the Arts ________________________________ In partial fulfillment of the requirements for the degree of BACHELOR OF SCIENCE ________________________________ By Tyler Haitz May, 2019 Haitz 1 Tyler Haitz Paul Schuette MBET Senior Thesis May 2019 In or Out: An Analysis on the consequences of Outsourcing in the Music Industry Throughout human history, the greatest artists have been incredible visionaries. This trend transcends culture, race, gender, and social class; Every single artist is inspired to fulfill their ambition. In the current age, it is incredibly easy to find said inspiration with the endless supply of information made readily available by the wonders of modern technology, namely, the Internet. However, inspiration is only half of the equation. Artists need to take that ambition and turn it into reality. In the past, dreaming too big could result in cutting corners or changing the original vision, often as a result of lack of social connections and wealth. Nowadays, almost nothing is too large to be achieved through the incredible amount of resources and social reach that the Internet can provide. Instead of cutting corners, artists have the option of relinquishing creative control to have someone else draw the corners for them. As technology advances, it becomes significantly easier for music producers and artists to create the content they need to achieve their artistic vision. Despite this, many producers decide to contract out to other businesses and artists to complete certain aspects of said vision. However, working in-house may produce better side effects. Whether for music, marketing, or PR, outsourcing produces positive and negative consequences that differ from the repercussions resulting from working in-house. When a band releases a studio album, it is required by every digital service provider that the album has an associated artwork. While some bands may design their own artwork, it is Haitz 2 incredibly common for a band to hire a graphic designer to create their album artwork. In this scenario, the band is outsourcing. Maurice Greaver describes outsourcing as “the act of transferring some of a company’s recurring internal activities and decision rights to outside providers, as set forth in a contract.” (Greaver 4). The artist would be the equivalent of the company. There are many reasons that an artist might outsource. In many cases, the artists may not have the skills or resources to accomplish a given task. If taking the previously mentioned band scenario, the band may not have members that excel at creating visual art, may not own software required to produce the art, or even lack the skills necessary to operate said software. Artists may decide to outsource in situations where it becomes cheaper for an outside organization to get the job done. If a music producer needs a short string ensemble part recorded for a pop song, the producer can do the recording himself but then would have pay the musicians and the studio. On the other hand, the producer has the option to hire musicians remotely on the Internet, which is usually cheaper considering these musicians have recording equipment readily available and would generally specialize in these specific recordings. Artists may also outsource when it gives them more time to focus on their strengths, allowing them to work efficiently. This is common practice in the audio engineering industry. A mix engineer may outsource to a mastering engineer for a stereo master and a recording engineer may outsource to another engineer to compile vocal takes. In each situation, this improves work efficiency, allowing artists to further hone in on their own strengths while allowing others to make up for any weakness. In every example, outsourcing allows the artist to fulfill his or her artistic vision. One very compelling example of outsourcing comes from the Gorillaz’ third studio Plastic Beach album, ​ ​. Gorillaz are a virtual band created by Damon Albarn and Jamie Hewlett. Haitz 3 This virtual band consists of five fictional members who play music within a fictional world. Plastic Beach Albarn creates the music while Hewlett handles the art. ​ ​was purely a concept album, with its purpose to tell the story of the characters that Albarn and Hewlett created. While the creators clearly had a solid artistic vision, they would only be able to reach it by outsourcing. Gorillaz aimed to tell a story that was not just limited to the confines of the album. Hewlett was a comic book artist and handled much of the two-dimensional hand-drawn media, but they had bigger plans in mind. Albarn and Hewlett had several high quality animations created for certain songs on the album. These animations further told the story that the creators intended. According to Alex Jeffery, Gorillaz commissioned plethora of other media objects such as online games, elaborate models, trailers, storyboards and tour visuals (Jeffery). The band could never have created all of this supplemental material in-house. In the end, the artist had fantastic visuals and a complex story to go along with their music recordings. However, despite achieving the artistic Plastic Beach vision, the sheer scale of ​ ​ resulted in unfavorable consequences. Like any decision, there is a duality of outcomes when it comes to outsourcing. It is critical for an artist to know when outsourcing is a necessity and when it becomes a liability. Strategic Outsourcing Greaver writes in his book, ​ ​, that it is critical for a business to do adequate research before attempting to outsource. He quotes American biochemist Albert Szent Gyogyi, saying “Research is to see what everybody else has seen, and to think what nobody else has thought” (Greaver 129), implying that research leads to conclusions that are unique for every organization. If an artist deems it unnecessary to outsource, it may be because of lack of practicality, immense cost, or a loss of artistic vision. Some musicians are incredibly talented in areas other than music. A musician may find it more practical to design his own album artwork, Haitz 4 especially if they have previous experience in photography or graphic design. The next and often largest factor in deciding against outsourcing is cost. Greaver writes about the importance of cost: Costs should not be the only issue in the make or buy decision, because cost reduction is not the only reason to outsource. But comparing the costs of outsourcing to continuing to perform activities internally will always be an important evaluation point and hurdle in any outsourcing decision (Greaver 130). Greaver believes that cost should not be the deciding factor, but for an artist it may be a critical one. An artist who regularly makes money from his or her art is able to make cost less of an issue because of a reliable return-on-investment. Artists who create their art strictly for the passion and sentimental value of creating are more vulnerable to consequences of overspending. Outsourcing requires paying an outside entity to do professional work, which can be expensive and perhaps deter an artist from doing so. The last factor that may influence an artist to not outsource is the lack of artistic control. When a company outsources, it leaves important decision making and methods up to the external source. External parties are responsible for delivering the contracted product, but have the right to decide on process, resource management, and everything else. For a business that requires physical products or objects that are mass-produced, this is usually no problem. For an artist, it may be the largest deterrent from outsourcing. An artist would have to adequately communicate his or her vision to the external party, then relinquishing their creative control to them. From there, it is in the external party’s hands to fulfill someone else’s vision. If the vision is misconstrued or ignored, it usually comes at the expense of the artist. In the context of music production, a this could mean a bad mix from a mix engineer. According to a study on Haitz 5 the correlation of mix quality and emotion, David Ronan wrote: “The results implied that emotion in a mix, whether induced or perceived, mattered the most to those with critical listening skills” (Ronan 11). An artist is going to have a high standard for his or her own art and can easily tell when something does not reach their standards. Some external parties that artists hire will adhere to the original vision. When outsourcing the artist takes a risk, and when that risk outweighs the rewards, outsourcing is discouraged. Plastic Beach Returning to the example of Gorillaz’ ​ ​, the creators, Damon Albarn and Jamie Hewlett, experienced many negative repercussions from the double-edged sword of outsourcing. While one of the outcomes was a well-produced musical album with a few excellently animated music videos, Albarn and Hewlett’s artistic vision incurred a heavy toll: High costs were incurred for the studio recordings, with Albarn conducting recording sessions with three separate orchestras, one in the UK, one in Syria and one in Lebanon. Gorillaz’ animated music videos, which carry a significant proportion of the storyline, also have very high price tags, with an estimated cost of £250,000 ($438,000) per clip (Jeffery 68). Plastic Beach The official budget for ​ ​ has never been revealed to the general public, however with the stated estimated costs of the three music videos, added with general costs of music production and large scale advertising, the total cost could have easily been between one and two million dollars.