Why now is a tough time to start a music marketing agency
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View this email in your browser (|ARCHIVE|) http://hotpodnews.com/presents.... A Newsletter about Big Ideas in Music and Technology, by Cherie Hu This is issue #65, published on October 4, 2019 Happy belated Mean Girls Day (https://www.radio.com/music/movies/gallery/mean-girls-day-how-to-celebrate) !
Before diving into this week’s podcast recap, I wanted to share an exciting piece of news, in case you haven’t seen it elsewhere on social (https://www.instagram.com/p/B27Auptnlye/) media (https://twitter.com/cheriehu42/status/1177592315159953408) : I’m officially writing a book!!
The tentative title is A Musical History of Digital Startup Culture, and the book will be published with Bloomsbury (https://www.bloomsbury.com/uk/) , as part of their academic Alternate Takes (https://www.bloomsbury.com/uk/series/alternate-takes-critical-responses-to-popular-music/) series on critical responses to popular music. I’ll be exploring the parallels between independent music careers and tech entrepreneurship, and the opportunities and challenges that arise when those two worlds collide.
As a few people have noticed, this book is definitely related to the “Artist as Technology (https://medium.com/@cheriehu42/the-artist-as-technology-part-2-what-is-your-whole-product-c5d871472418) ” posts that I’ve been publishing on Medium, but the book will ultimately take on a different tone. In particular, I’ll be incorporating academic theory in addition to on-the-ground case studies — and am aiming to develop a new framework for understanding the modern era of artist entrepreneurship in general, instead of just offering “advice” to music-industry professionals.
If you have any suggestions for papers/books to read or artists, managers and other music professionals to speak with for this piece, please let me know by replying to this email. Thanks so much to everyone who’s already voiced their support! :)
- Cherie Why now is a tough time to start a music marketing agency
2019 will mark the global recorded-music industry’s fifth consecutive year of growth. The ongoing rise of streaming subscriptions has brought new capital to music companies, who are becoming more open to experimentation in both branding and technology (e.g. major labels building their own seed-stage investment funds (https://musically.com/2019/09/03/warner-music-group-startups-technology/) ). This increased capital has encouraged higher levels of entrepreneurial activity, spinning the investment flywheel even further.
Has this capital also made it easier to build a marketing business around music? The answer is much more complicated.
For the 13th episode of the Water & Music podcast, I had the honor of chatting with Garrison Snell — Founder/CEO of Gyrosity Projects (https://www.gyrosityprojects.co/) , a digital-marketing agency based out of Nashville, Tennessee that was acquired by The Stadiumred Group (https://www.stadiumred.com/) in 2018.
Gyrosity specializes in digital advertising and social marketing, and has worked with the likes of Billy Ray Cyrus, Kenny Loggins and Paul Cardall, in addition to several notable brands outside of music. I also interviewed for a Forbes article (https://www.forbes.com/sites/cheriehu/2017/05/08/inside-the-ongoing-quest-to-get-music-curators-paid/#472824514a62) back in 2017 about companies that were trying to compensate music curators and influencers; Garrison also runs Crosshair Music (https://www.crosshairmusic.com/) , a playlist-pitching and music-promotion startup under the Gyrosity umbrella. You can listen to this episode on Apple Podcasts (https://podcasts.apple.com/us/podcast/episode-13-ft-garrison-snell-why-now-is-challenging/id1454221845?i=1000452307332) , Spotify (https://open.spotify.com/episode/15azddAmA9forBcHfhHNgv?si=gEWwGSDEQrWd7n45P6zOsg) , Overcast (https://overcast.fm/+Q4Vdz7V4k) , Pocket Casts (https://pca.st/d1aN) and most major audio listening platforms (https://waterandmusic.transistor.fm/subscribe) . You can also access a full transcript here (https://pca.st/d1aN) .
We’re both part of the entertainment-industry listserv Pho (http://www.onehouse.com/pho.htm) (run by the great Jim Griffin (http://www.onehouse.com/bi0.htm) ), and Garrison sent an interesting message to the list earlier this year about how more marketing agencies and consulting firms are consolidating and combining their services— and that a similar dynamic was bound to impact the crowded world of independent music-marketing firms as well.
I found this trend intriguing, and wanted to invite Garrison on the podcast to unpack it more deeply. Turns out, ongoing consolidation has arguably made it more challenging than ever to start a brand-new music marketing agency. In fact, as Garrison argues, entrepreneurially-leaning marketers might be better off helping record labels, artist-management firms and other music companies build their own agencies internally, instead of starting completely from scratch.
In our interview, we ended up expanding into several related topics as well — including the impact of automation and the “gig economy” on the way music marketing is done (sometimes for the worse), and the extent to which record labels now compete with music-marketing agencies for work, as the former moves towards a more service- rather than ownership-oriented business model.
Below is a summary of Garrison’s most interesting takes; you can read the full transcript of this interview on Medium (https://medium.com/@cheriehu42/why-now-is-a-challenging-time-to-start-a-music-marketing-agency-f151192c9410) . Please feel free to respond directly to this email with any feedback or additional questions you have! Marketing agencies are consolidating in part because there hasn’t been a new digital ad format in over a decade.
“When I started my agency, you’d walk into a Starbucks or a coffee shop or something, and it was like everybody with a laptop was a new digital agency … You had all these new entrants in the space between the time that Google Adwords first launched and Facebook Ads launched, which is about a 10-year difference. You had all these agencies who kind of rushed in, managing social, building websites, whatever.
It’s kind of reached this point where there hasn’t been a new medium that’s come. There was display, then there was search, and now there’s social — we don’t have a new digital advertising medium yet.
So you’re seeing this consolidation happen, where agencies that are really good at a portion of that world are getting rolled up and down the value chain of the folks to the left or right of them. Consultancies that do marketing strategy are now buying boutique agencies that will tactically execute it. Or branding agencies will buy experiential companies and digital agencies to carry out the brand messaging that they devise for a client.
… Until that next [medium] frontier opens up, it becomes more of the same [thing], which is why we’re in a situation where people are consolidating. Those that didn’t make it are shutting down, and those that did make it are being purchased. And there’s a group of folks in the middle that will persist for a little while, and either make it to the next medium and be on the frontier, or they will just, you know, die out in the desert. It’s just what happens.” Three key opportunities that remain for building a new music-marketing agency today: 1) help an existing company build one in-house, 2) sell access to a network of influencers, rather than skill; and 3) own a specific ethnic or cultural niche.
** HELP AN EXISTING COMPANY BUILD ONE IN-HOUSE
“I don’t know that you can go and start another marketing agency. I really think you go help someone build their own internal agency. I think if you’re really good at it, you go find a team that has not built an internal team yet, and you go lead that team.
Here’s a good example. I believe it’s Vector [Management] (https://www.vectormgmt.com/) . A friend of mine was telling me that they have an internal agency that’s specifically for brand partnerships for their management clients, and you can go and hire that agency to represent you as well. And I’m sitting here going like, yeah, I’d be going to every decent [artist] management company on the planet trying to build them an internal digital team, or an internal performance and growth team, while I wait for the next medium.”
** SELL ACCESS TO A NETWORK OF INFLUENCERS, RATHER THAN SKILLS
“Until we have a new medium, you’re not going to have a new take on digital advertising for people to build a business around. So you got to put that to the side and say, how do we do what we have today, better? And I think the only way you can go is deeper.
Specifically in music, if I was going to build something today, what I would want to own is a network of micro-influencers — I’m talking probably 100,000 of them, all ranging between 500 and 5,000 followers apiece on a variety of platforms — in one genre, like one type of music, that I can activate for any release at any point. It’s not really about selling it as a service; I would probably sell it as a partnership, as an exploitation arm for some part of a release strategy.
There was an app many years ago called Thunderbolt. Basically what you would do is you would have all your fans or followers sync into this platform, authorize into this platform — and at a certain time, on a certain day, whenever it mattered most to the business, all these accounts would be programmatically required to post the exact same message at the exact same time.
… That’s what I’m talking about. I would love to own a version of that for music releases. There are those things out there; they’re just small and hidden, and you got to kind of look for them. I don’t even know a lot of their names, but I do know some folks who provide services like that, and it’s usually just, like, their friends in a text message thread, and they get paid a couple thousand bucks to have all their friends posted at. It’s usually, you know, cool-kid influencers out in L.A.
… And I would want to truly dig deep into one specific type of music. I don’t think you can do it for many different types of music. For me, it will would be digging deep into, like, instrumental piano music or guitar music, like background music.”
** OWN A SPECIFIC ETHNIC OR CULTURAL NICHE
“One thing I think you could do in this space is — it’s not selling relationships, it is a skill set — if you can get really, really good at relevant cultural content, especially visual and video, for a very specific subgroup, ethnic group or cultural group. It’s super valuable right now, and it’s being paid for a lot.
And the more I think about it, it’s just something Garrison can’t do. Like, I’m a 26-year-old white dude from Arkansas. [laughs] It’s not exactly my competency. But we have a partner down in San Antonio that’s a multicultural agency, and from a music perspective, they know so much about the Hispanic market in the southeast United States. They could really influence a lot of Latin American artists trying to come to the States, or in other ways. And I think if you have a cultural competency there and are a great, creative, very visual individual, you could really spin up an awesome boutique creative consultancy around that. That would be really cool.” Relying too much on the “gig economy” for music marketing risks losing the emotional nuance and long-term commitment that underpins iconic campaigns.
“The ultimate problem, in my opinion, with the gig economy is that you are spread out among so many different interests that you cannot do your best work that way. You execute it, and it’s done, but it doesn’t have that extra 10% of emotional intelligence that it requires to make an excellent product. For an agency, it’s not impossible [to do]; it’s just really hard.
… how I started Gyrosity was actually around a large network of freelancers. I had a Google Sheet of about 200 freelancers at one point, for everything from placing Facebook ads to quick social content to administration to video editing. I had a lot of open Upwork contracts, guys that I would keep open at any point. They were all over the world, and I would send them a gig, they would knock it out, and I would pay them hourly. That’s kind of how I built it from the beginning.
What it required for me to manage these folks well was to have explicitly laid out, every day, exactly what I needed them to do, by when, to the detail — almost to the point where it would have been better for me to do it myself, in some ways, because I had a little more nuanced understanding of what the client needed.
These freelance guys were really incredible executors. What they lacked was — and maybe it was based on my inability to communicate nuances to them — but they lacked nuanced understanding of what the client was looking for, or what the strategy called for.
I would lay out targeting parameters on Facebook, or creative parameters for my creative guys, and I thought I was being incredibly detailed. And I’d get back stuff that was technically right, but was just lacking something, some soul and heart to it. That’s not necessarily their fault. If I was sitting in the room with them, they would get it … When I started hiring folks in person to work out of the office, they started picking up on the nuances of what clients wanted, and the nuances of what it would take to make a strategy happen, and things started clicking at that point.
So in theory, [the gig economy] sounds like a phenomenal idea; [it] did not work well for me, when we got really busy. It would work well for certain things, but it did not work well specifically for content. With content, it was incredibly difficult to get what I wanted, and it became a huge time waste … If you’re going to do it, you have to put a lot of time into making sure that they get what you’re talking about.” Even the shiniest, most technologically advanced music-marketing tools won’t do anything if you don’t understand your vision or audience in the first place.
“As far as marketing automation goes, there are plenty of amazing platforms out there, tried and true in the general business market, that you can use, that will do things like automate your retargeting or email.
… They’re all super slick, and they work great. But really what you put in them affects what comes out. If you don’t put good marketing in them, if you don’t put good messages in them and strong, nuanced understanding of your audience in them, then you don’t get any results out. But it definitely helps to scale an individual’s time.
… There are also a lot of these platforms that will automate certain things, but they do not provide strategy. They provide tools and tactics, but they don’t provide the why … It’s more like: here’s a bunch of things for you to play with, here’s a bunch of platforms for you to use, and they’re really slick and they’re cool, and they got bells and whistles and they do things that flash and bang and pop, but you don’t know when to use them and why … If you don’t have some of the basics down, they don’t do anything for you. They don’t solve for an emotional understanding of your audience, or for empathy with your audience.
… I think one of the things that’s unique about music is that you’re selling a person’s ability to access their own emotions and feelings and create art out of it, or a representation of that. And if your team isn’t tuned in with that, it’s really hard to hack around that with ‘cool’ tools.” Spotify’s acquisition of SoundBetter distracts from the streaming company’s core business model, which it needs to prioritize more.
“I really don’t want to end this on pessimism, but I just think this [acquisition] is a way, way overrated piece of news. I would go so far as to say this is a big nothing.
I really think if you step back from it, and you look at Spotify, there is no way on God’s green earth that they are anything in the future other than a music consumption platform. I mean, just look at the frickin’ dumpster fire that was their attempt to be a distributor (https://variety.com/2019/digital/news/spotify-shuts-down-artist-direct-upload-1203256886/) .
I’m reading articles about it, and [the messaging] is like, “it’s becoming a very different type of two-sided proposition, after buying New York-based SoundBetter, [a] freelance marketplace, the idea being that there would be some subscription revenue from artists, as well as from listeners.”
But I feel like they’re just grasping at straws. I’m not in their position, I don’t know, I’m not running a public company, but it feels like a deviation from what they do. Honestly what they should be doing is just continue to expand globally, and improve the infrastructure around consuming the music they facilitate us consuming. They should have been the first one to put out smart speakers. There’s no reason any of these other companies should have done that.” 🌊 ✨ If you’d like to support even more thoughts and conversations on music and tech, I encourage you to become a paying member of the Water & Music ecosystem on Patreon (http://patreon.com/cheriehu?utm_campaign=Water%20%26%20Music&utm_medium=email&utm_source=Revue%20newsletter) . For as little as $3/month or as much as $40+/month, you can access a wide range of perks including: * A closed, members-only Discord server * Exclusive essays * Previews and bonus material for my freelance articles * Monthly video hangouts with me
You’ll also be supporting the expansion of the Water & Music team as it continues to grow in the coming year. Thanks so much for reading! ✨
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