SXSW Report: Economy in Music

SXSW Music

While attending the SXSW Music Festival the other week, I had the opportunity to sit in on a panel who would be discussing the economics of the music industry, data and metrics, and the ever-changing avenues artists use to try and become known. The panel consisted of brothers Win and Will Butler (Arcade Fire), Paul Krugman (Economics Professor at Princeton and contributor to The New York Times, Forbes, and Slate), Nicky Berger (manager of the band Grouplove), Tatiana Simonian (VP of Music at Nielson, former Head of Music at Twitter), and was moderated by Rembert Browne (Senior Writer at Grantland).

Ever since I saw this topic and its panelists when I first looked over the schedule, I knew it was one I needed to be a part of. Fortunately I got there early enough and was able to sit front and center as the discussion took place, which proved to get a bit heated at times. Mixing musicians and corporate folk together often leads to this.

One of the main topics of discussion revolved around brand integration into music. An example Browne used when posing the question was all the branding that takes place during SXSW. Most infamously, last year’s Doritos Stage that was built to look like a giant vending machine:


Browne suggested that the brands were putting themselves way ahead of the artists performing for them, which takes away from the artist and their uniqueness. “Doritos presents LL Cool J” sounds worse than “LL Cool J presented by Doritos” he explained, and that brands should get behind the artist, because that’s why fans are there in the first place. Berger suggested that brand partnering can be a healthy relationship as long as it makes sense, and that combining a brand or product with an artist strictly for monetary purposes doesn’t always add up. Berger went on to explain that brands are recognizing the in-your-face marketing technique is becoming outdated, as companies like Doritos experienced fan backlash via social media. Will Butler agreed that brand partnership can be good, but the negative side is that it can give bands or artists positive exposure even though they might not be deserving of it. Simonian suggested that musicians need to do an analysis to determine if their partnering with a brand would help or hinder their goals.

This topic led then led to the debate of artist assistance. Win Butler explained that in their home of Canada, the government provides monetary assistance to various forms of art. He explained that this is all well and good, except that it takes way to long to receive. He said by the time the government approved them for assistance, Arcade Fire was already rolling along. Even if they would have gotten the money early on, it would have been a minuscule amount. Simonian chimed in and explained that some companies – specifically Chipotle – have provided free meals to emerging artists to help them along. She explained that when she was in a band, there was always the struggle to find a meal while driving around and living out of a van, a common problem for those starting out. Even with the amount of money a band could make by partnering, Krugman explained that concert tickets are what bring in the money for the artists, where they earn about seven times as much from live performances than from royalties.

From here the debate turned to data and metrics, and how much faith is put into information. This created an obvious split between the Butler brothers and the rest of the panel. Win Butler prefers the old-school way of just going out and playing; not worrying about numbers, or demographics. It may be a bit unfair for him to feel this way, considering Arcade Fire has such a following that they can basically play anywhere and sell out. Simonian made the point that for bands who haven’t yet reached a certain level of success, data can be used to find out where their fans are. If they have that information, they can schedule tour stops in places where people will show up, as opposed to just taking a chance on a town that may not hold many fans.

As I sat there and took it all in, I couldn’t help but make the connection between the recent emergence of metrics in the sports world, specifically baseball. With new technology comes new ways of measuring an athlete’s ability. The biggest stat that’s been causing a stir over the past few years is WAR – Wins Above Replacement – in which a player’s rank is determined based upon an average replacement at his position. For example, the average replacement would be 0, while a phenom like Mike Trout finished 2014 with a WAR rating of 7.9, meaning he added almost 8 more wins over the season for the Angels than a replacement level centerfielder.

While music is more subjective than sports when it comes to data, it’s something more bands and musicians may take into account. Bands can use the data to figure out when the best time is to release an album, what sort of album artwork attracts more buyers, or even which new single should be released. It’s a battle between new and old school thinking, which led into the next topic: social media.

It’s no secret in today’s world that people are using every form of media available to promote a product or song. YouTube creates stars on a daily basis it seems, many musicians are still using and being discovered through MySpace (i.e. OneRepublic), and let’s not forget about all the talent shows now crowding the small screen. As might be expected, the Butler brothers expressed a bit of disdain toward these avenues. There’s a generational gap that’s now causing a stir in music, which some view as good, and some as bad. Bands that have cut their teeth in dark, smokey clubs with an audience of ten people day in and day out don’t have much respect for those who got famous on the Internet or American Idol. Former Nirvana drummer and current Foo Fighters leader Dave Grohl went on a rant about this very subject in a 2013 interview with Sky Magazine:

“When I think about kids watching a TV show like American Idol or The Voice , then they think, ‘Oh, okay, that’s how you become a musician, you stand in line for eight f****** hours with 800 people at a convention centre and then you sing your heart out for someone and then they tell you it’s not f****** good enough.’ Can you imagine? It’s destroying the next generation of musicians! Musicians should go to a yard sale and buy an old f****** drum set and get in their garage and just suck. And get their friends to come in and they’ll suck, too. And then they’ll f******* start playing and they’ll have the best time they’ve ever had in their lives and then all of a sudden they’ll become Nirvana. Because that’s exactly what happened with Nirvana. Just a bunch of guys that had some s***** old instruments and they got together and started playing some noisy-a** s***, and they became the biggest band in the world. That can happen again! You don’t need a f****** computer or the Internet or The Voice or American Idol.” – Dave Grohl via Sky Magazine

I think Grohl sums up a lot of musicians’ thoughts on the path to music stardom rather fittingly. The big issue is that there’s an over-saturation of people who think they deserve to be the next big thing in music, and if they have that one song that gets people’s attention, then they’re set for life. It’s become too easy and too common for someone to become the “it” thing, only to fade out after people grow tired of their sound or realize they weren’t able to keep the magic alive. Perhaps Berger explained it the best, in stating that modern sites like YouTube allow music hopefuls to get noticed. Sure you have to wade through the less talented, but every now and then you find a nugget of gold. So in that sense, it is nice for those who may not have the funds or the ability to quit their jobs and live out of a van for months on end. Berger said the Internet has made it easier for people level up from 0 to 3, but making it from 3 to 10 (10 being a successful musician) is what separates the truly talented from the starry-eyed hopefuls.

Staying on the Internet topic, Browne asked for the panelists’ opinions on live-streaming. So many concerts and festivals have now been made available for people to stay at home and experience the live music without having to shell out big bucks for tickets and the fees that go with it. He referenced the fact that more and more people choose to stay home and watch football on TV as opposed to going to the game, dealing with parking, and unruly fans? Why spend $100 to go to a football game when you can sit in your living room in front of a high def screen with your closest friends and watch four games at once? Krugman offered the opinion that while it’s a good chance for those who are unable to make it to the concert, either financially or otherwise, he doesn’t see concert attendance fading away. While sports may have an issue with this, he feels concerts are better experienced in person, and that isn’t something people are going to give up. There’s always a connection between the artist and the people who go to the shows, and that just can’t be replaced by a computer screen.

This is one topic we all can agree on.


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Tags : MusicSXSW
Nick Hershey

The author Nick Hershey

Nick was born and raised in Amish country, has a beard, but isn’t Amish. He’s a fan of winter as long as he’s at the top of a mountain with a board under his feet. He’s an avid sports fan, movie junkie, tv bum, and music enthusiast who still purchases CDs for some reason.