Music 3.0- Ian Rogers Interview Excerpt

Topspin CEO Ian Rogers

Interview Excerpt

Formerly the General Manager of Yahoo Music, Ian Rogers is now the CEO of Topspin Media, one of the premier direct-to-fan services currently available. A frequent panelist at industry conferences world-wide, he is one of the most respected and widely quoted voices in the music business today. Ian was kind enough to look into his virtual crystal ball as to what he sees for the future of the industry in the next few years.

Let’s talk about the state of the industry. What are some of the opportunities and challenges you see right now?

The opportunities and the challenges are all wrapped up in the how the physics of the space are changing. The good news is that the barrier to entry is gone, and for the first time, the majors [major labels] have no intrinsic advantage anymore. Just let that sit for a second. The advantages were that they owned both the distribution and marketing channels. They don’t anymore. They still own marketing as far as radio is concerned, but that’s not even a thought for most artists. You and I could start a website tomorrow and be the next Yahoo or Google, or we could be the next My Morning Jacket. That’s all within our grasp and no one is standing in our way.

A great example is Odd Future, who are a group of 19 year olds that only have a website. Those guys were the stars of SXSW this year yet do not have a single track at iTunes, so something like that is possible, and that’s the good part of where we’re at today.

The challenge is that you’re competing with more things than ever for people’s attention, so the marketing side of it is harder. You have to be careful not to sell an artist a bill of goods that there’s a technology that will make people listen to crap, but if you have something that people really want, it’s easier than ever for them to get it.

So generally speaking, that’s the landscape of the business today. The good is the lower barrier to entry as the cost of product and distribution has come down, but at the same time the cost of marketing has gone up. Or it’s gone to zero depending upon how you look at it. Odd Future spends zero dollars on marketing, so maybe the hard costs haven’t gone up, but the challenge of it certainly has.

Where do you see things heading a couple of years down the line?

I really see things crystalizing. The industry has been in the way of what consumers wanted for the last fifteen years, but it’s finally getting pushed out of the way. The way fans are consuming music will change again in the next five years time, which should really scare the industry. They just got used to the idea of digital downloads and now they’re going to see their distribution format change yet again.

Five years from now you won’t connect your computer by a wire and transfer tunes to it. CD sales will continue to decline, but they won’t decline to zero because some people will still want collectables. Things like box sets or 12 inch vinyl will still exist.

Then you’re going to have two types of services. One is the subscription services, which are the Spotifys of the world, like Spotify, Rdio, MOG, and Rhapsody. I don’t think you’ll see many new entrants there, and in fact, the weak ones will probably get bought by a company with an existing subscriber base, such as a cable or wireless company.

And then you’re going to have Apple, Google and Amazon with these more sovereignty-based services. You buy the track in some form so you own it, and then it’s lockered and you can access that track from any device. That’s what it’s going to look like.

Companies like Topspin are going to be dealing with the direct-to-consumer channel which will be for the higher end goods. Digital is 50% of our volume and 25% of our revenue right now, but it’s possible that ratio will decrease over time.

Do you find that your clients utilize a third party to use your tools?

Many do. I think that this is where the Final Cut Pro or Protools analogy works well. For instance, I know that the Beastie Boys know their way around Protools and do a lot of recording on their own, but when they’re really making their record they get an engineer and when it’s time to mix they get a professional. It’s the same thing here. We have a lot of artists that use our tools themselves and we’re happy about that, but a lot of people at the high end use professionals.

The most exciting thing is that some of the marketing pros have become so competitively priced that a small artist can now actually afford them. At SXSW this year we invited our partners to speak at sort of a mini-conference during the day, and two different marketing services companies, Oniracom [see the interview with Jacob Tell] and Eyes and Ears Entertainment, told a couple of great stories. The Eyes and Ears guys have a $1300 product, and for that they give you a website, a store and some digital marketing.

What they’re saying is that instead of spending a grand pressing up some CDs, spend that money setting up an excellent and professional web presence, including a store. It’s better than giving a bunch of CD copies to family and friends and having the remaining 950 copies sitting in a drawer somewhere.

Then Oniracom said that they now actually prefer to work with smaller artists because of how easy it is for them to take the Topspin tools and add the graphic design and web development to provide a an extremely useful yet cost-efficient site for an artist without having to reinvent the wheel.

So the answer is that a lot of people are doing it on their own, but a lot of small guys can now afford to hire someone too.

What’s the best way to break an act these days?

I’m not sure that it’s changed all that much. More than ever you have to have something that people are passionate about, and you have to build awareness through great recordings and touring. Step two is different in that you now have to build real fan connections and a real relationship with those fans. If you’re lucky enough to do both of those things, then you can talk about selling something.

I think another difference between the proverbial yesterday and today is that we’re moving from a mass market to mass niches, so you have to know what the first niche is that you’re targeting and then go after it. You don’t put the music out there and see who adopts you, you have to know when and how and where you fit. Square peg, square hole, you just go straight into it.

If you look at the way that Yeasayer did it, it wasn’t about an all-out blitzkrieg. Their manager said, “I know exactly the audience that is going to like this. I’m going to tailor our approach to fit that.” It wasn’t that he changed the way they looked or anything, but he didn’t let any photos of the band get out for the first twelve months. He had a specific way that he wanted people to experience the music and the art that went with it. He knew it would resonate with a certain audience, and that’s the way he let it unfold, naturally but still really deliberate. Once he saturated that niche, then he moved on to another audience that would likely dig it, and treated it like it was a brand new band and pulled all those levers again.

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