Amanda Palmer : New Model or Casino Win?

[grawk]

No more than the music industry is a pyramid scheme. Convincing up and coming bands they need to get into hundreds of thousands of dollars of debt for the chance to "make it big". Spending money on expensive producers and studios and lavish tours and "lifestyle" when what they should be doing is investing in themselves, their music, and maintaining control. The few musicians that "make it" find their music is all owned by the studio, their records somehow never manage to clear the debt, and at the end of the day, they've been working for nothing.

Facebook is a social platform. Sure, it's overvalued as a stock. But no one made the investors (or advertisers) pay what they did. And we still don't know what the long term potential is. The stock price dropped after an initial spike, because there lots of institutional investors who got in before the IPO at a price much less than the IPO strike, and they wanted to take their profit. That's how institutional investing works. There was no chance I would have purchased the stock, because it's price to earnings ratio is insane. Every investor has access to that data, and they mostly just got sucked into the hype.

As to whether advertising will ever work on facebook, it's hard to say. Certainly the advertisers that take time to create a relationship with their customers on facebook are successful on facebook. Just puting a display ad up won't do it, but give your customers a reason to go to your page, and you'll be rewarded. Just like AP's being rewarded for giving her fans a reason to go to her twitter feed, her blog, and now her kickstarter. New media, web 2.0 isn't a pyramid scheme, but it's also not an instant ticket to success. Just like always, success requires effort. It just now doesn't require as many hands in the pie.

[chrisso]

Originally Posted by grawk

Convincing up and coming bands they need to get into hundreds of thousands of dollars of debt for the chance to "make it big". Spending money on expensive producers and studios and lavish tours and "lifestyle" when what they should be doing is investing in themselves, their music, and maintaining control. The few musicians that "make it" find their music is all owned by the studio, their records somehow never manage to clear the debt, and at the end of the day, they've been working for nothing.

That's such a nonsense, one sided view.
Ever since the 80's I've known mainstream musicians investing their advance into their own recording facility.
It makes for cheaper records, and the studio remains even after the label association has ended.
This isn't an exception. I know a lot of artists who have gone this route.
On your last point...
I had an association with an indie style songwriter/artist.
he was another who sunk his earnings into his home studio.
He did sign contracts with major labels.
he's never been a 'pop star' and never sold millions of albums, but about ten years ago he bought all his albums back and now owns and releases all his music, plus he has a very nice studio.
Any band that blows all their money on wasted studio time and high living, only have themselves to blame in this informed/internet age.

[John Eppstein]

Originally Posted by grawk

No more than the music industry is a pyramid scheme. Convincing up and coming bands they need to get into hundreds of thousands of dollars of debt for the chance to "make it big". Spending money on expensive producers and studios and lavish tours and "lifestyle" when what they should be doing is investing in themselves, their music, and maintaining control. The few musicians that "make it" find their music is all owned by the studio, their records somehow never manage to clear the debt, and at the end of the day, they've been working for nothing.

You really do need to get your information from somewhere other than the popular press.

[initialsBB]

Originally Posted by John Eppstein

Of course it's a pyramid scheme. The only thin that keeps the prices of many tech stocks high is an unending supply of suckers who think the prices will go even higher. Eventually the supply of suckers will run out and there will be a major stock market crash - and it really won't be pretty.

The stock market may seem like a pyramid scheme but that doesn't mean that the companies involved are. Facebook and Kickstarter are not pyramid schemes. If the entire market is a pyramid scheme, then all of the companies involved, including the major labels would have to be considered pyramid schemes too.

Originally Posted by John Eppstein

Facebook is an advertising pyramid

No. Facebook made a product that gathered a lot of eyeballs. Now they're in the business of selling those eyeballs to advertisers. They deliver exactly what they promise. If advertisers decide that buying ads on FB isn't working for their company, they'll stop buying them and FB may go out of business. If users move away from FB the site will lose those valuable eyeballs and they might go out of business. This is the exact same business model of every company that sells advertising, from newpaper to radio to TV. For it to be a pyramid scheme, the ad buyers would have to be reselling the ads to another buyer who then resold them to another buyer, etc. with none of them ever getting any actual ad time in return.

[rack gear]

Originally Posted by grawk

How does that dispute what I said? The predictions didn't change the industry. The industry changed. A new way to succeed has to be found.

wrong. revisionist history I see... where are all of these empowered middle class professional musicians that we're predicted to emerge as a result of the "democratization of distribution?"

If the Internet is working for Musicians, Why aren’t more Musicians Working Professionally? | The Trichordist

it didn't happen, and it's only gotten worse...

[rack gear]

Originally Posted by initialsBB

No, the same thing happens in any business or art form. It's basic supply and demand. If there are 10 restaurants in your town and only 5 of them are profitable, what will happen if suddenly 100 new restaurants open up? Will 50 of them be profitable? Unlikely.

That's not a pyramid scheme. I think some of you guys need to learn what a pyramid scheme is. Facebook is not a pyramid scheme either. I challenge you to find one single "web 2.0" business that can be accurately described as a pyramid scheme.

I say "pyramid scheme" in that it is most likely the most early adopters that benefit and everyone else who follows does not. So perhaps the phrase "pyramid scheme" is not entirely correct, but you seem to understand the mechanics of what I'm talking about either way.

Originally Posted by initialsBB

It's quite possible that some of these artists really don't understand the finances involved and aren't prepared to run their own business. I could see a band not really realizing all of the things their label does for them, and then looking at the recording budget alone and trying to kickstarter their next album based on a number that's way too low and not factoring in manufacturing, shipping, publicity, etc.

Agreed. I think this is where people get overly excited about something like kickstarter without drilling down into it. I also think that, sometimes (a lot of the time) it's better for artists to make art and for business people to handle business. Of course there's going to be overlap, but I can see where the business side a a creative endeavor can really suck the life out of the creativity.

Originally Posted by initialsBB

Maybe a better version of something like Kickstarter would actually provide educational resources for the people submitting pitches so they're better prepared for what they're getting into. Maybe Kickstarter should require an actual business plan from the people submitting proposals. I think there are a lot of ways that the basic idea could be improved.

I agree. I'm pro-education. There's so a mad rush to spin any of these half baked ideas as "the solution" that they're never really fully formed for practical application.

The web can't outrun human nature. Individual "Celebrity" YouTuber's started banding together for collective bargaining with Google. Then an umbrella company was set up that aggregated the collection of revenue and redistributed it. That company has sold a majority interest to Google. Now those DIY'ers are essentially on salary to Google to create content below market costs.

Once everyone realizes the only thing that's happened is that the gate keepers still exist, they've just moved, the better off everyone will be.

old gate keepers = access to distribution

new gate keepers = access to distribution REVENUE

understanding reality makes progress and change possible.

[initialsBB]

Originally Posted by rack gear

I say "pyramid scheme" in that it is most likely the most early adopters that benefit and everyone else who follows does not. So perhaps the phrase "pyramid scheme" is not entirely correct, but you seem to understand the mechanics of what I'm talking about either way.

I guess I see it as being the same as any other field. Pioneers or early adopters are often rewarded more than the people who come later. There are certainly bands who benefited from the early days of MTV who would never have gotten on the air 10 years later.

It's just supply and demand. Right now I don't see any artists I like who are currently running a Kickstarter campaign. If I did, I might consider giving money. If there were two or three bands on there I liked I might consider giving to all of them. But if there were suddenly 100 bands on there that I liked all competing for my backing, obviously I can't give to all of them.

So it seems logical that as more artists use Kickstarter, the success rate will likely go down. Or if Kickstarter gets more applications and decides to turn more of them away to keep the number of active projects low, then it's the same effect - increasing demand, limited supply. Exactly the same thing that happens when an indie label openly accepts demos until they're suddenly deluged with so many that they have to be more selective about what they listen to.

[rack gear]

Originally Posted by initialsBB

I guess I see it as being the same as any other field. Pioneers or early adopters are often rewarded more than the people who come later. There are certainly bands who benefited from the early days of MTV who would never have gotten on the air 10 years later.

It's just supply and demand. Right now I don't see any artists I like who are currently running a Kickstarter campaign. If I did, I might consider giving money. If there were two or three bands on there I liked I might consider giving to all of them. But if there were suddenly 100 bands on there that I liked all competing for my backing, obviously I can't give to all of them.

So it seems logical that as more artists use Kickstarter, the success rate will likely go down. Or if Kickstarter gets more applications and decides to turn more of them away to keep the number of active projects low, then it's the same effect - increasing demand, limited supply. Exactly the same thing that happens when an indie label openly accepts demos until they're suddenly deluged with so many that they have to be more selective about what they listen to.

fair points.

[John Eppstein]

Originally Posted by initialsBB

The stock market may seem like a pyramid scheme but that doesn't mean that the companies involved are. Facebook and Kickstarter are not pyramid schemes. If the entire market is a pyramid scheme, then all of the companies involved, including the major labels would have to be considered pyramid schemes too.

This is in the wrong thread, it should be in the FB one.

Kickstarter isn't a pyramid and I don't think anybody said it was.

Facebook is.

No. Facebook made a product that gathered a lot of eyeballs. Now they're in the business of selling those eyeballs to advertisers. They deliver exactly what they promise.

No, they really don't.

They don't because those are not eyeballs that have any interest in advertising whatsoever. Nobody clicks on Facebook ads unless those ads are for things like Facebook games. Nobody searches for products on Facebook, the use Google and similar search engines that are more suited to the task. The idea of Facebook as an advertising platform is a con.

Which is why its own people are shorting the stock. The know it won't retain its value.

If advertisers decide that buying ads on FB isn't working for their company, they'll stop buying them and FB may go out of business. If users move away from FB the site will lose those valuable eyeballs and they might go out of business. This is the exact same business model of every company that sells advertising, from newpaper to radio to TV. For it to be a pyramid scheme, the ad buyers would have to be reselling the ads to another buyer who then resold them to another buyer, etc. with none of them ever getting any actual ad time in return.

No.

It's not the ads that form the pyramid.

It's the STOCK.

The ads are just the fuel for it.

In a pyramid scheme the early investors get rich and the later suckers are left holding the bag. And yes, that's PRECISELY how a great deal of today's market in internet stocks operates.

The crash will be spectacular.

In posts on another site, Bob O. has likened the looming internet stock fiasco with the run-up in the '20s to the 1929 crash that launched The Great Depression - the parallel being that irrational and unbridled speculation in radio stocks was one of the prime factors then. He sees history repeating itself with crazy speculation in a new technology coupled with lack of effective regulation being a recipe for disaster. It's a pretty compelling case.

[kennybro]

Originally Posted by grawk

No more than the music industry is a pyramid scheme. Convincing up and coming bands they need to get into hundreds of thousands of dollars of debt for the chance to "make it big". Spending money on expensive producers and studios and lavish tours and "lifestyle" when what they should be doing is investing in themselves, their music, and maintaining control. The few musicians that "make it" find their music is all owned by the studio, their records somehow never manage to clear the debt, and at the end of the day, they've been working for nothing

Actually, they've been working for the valuable things that only an established label can provide to them... exposure, market placement and advertising.

It's cost prohibitive to do these things for yourself on a large scale, and kickstarter will be a non-starter if you don't have that market visibility first.

My friend, who was regionally, very successful and nationally, marginally successful in the early 80's, has a kickstarter project working right now. He was signed to a major, 2 albums, numerous singles, had friends like Sting, Iggy, Jules Holland, Muddy Waters, Willy Dixon, Miles Copland, etc... (no help now)
He's a tireless multi-social media self promoter, and he's trying to raise $15k on KS. Time is closing in, and it's pretty sad to watch the whole project tanking after all of his relentless crowdsourcing effort, 24/7 for months for this project, after years of self-promoting on social media. I believe that his situation is pretty typical.

It's been said that Kickstarter is hiding the failures. Only projects in progress and success stories show up on their site. Can't blame them for this, but it discards the whole truth. KS wins either way. If you need 20k, but raise 7, KS still takes 5% of the 7.

Here's an interesting take from Business Insider.
On Kickstarter, Failure Is Not An Option - Business Insider

In all fairness, here's a counterpoint
http://gigaom.com/2012/05/30/kicksta...arder-to-find/

[freetard]

KS doesn't take any money unless the project was funded successfully.

[initialsBB]

Originally Posted by John Eppstein

This is in the wrong thread, it should be in the FB one.

Kickstarter isn't a pyramid and I don't think anybody said it was.

Facebook is.

I was saying that I thought as more people began to use kickstarter the total amount of funding might go up and the number of projects being successfully funded might go up, but the odds of success to failure might get worse too. RG said he thought that was evidence that it's the typical web 2.0 pyramid scheme. But I really just think it's the nature of the beast.

If you have a small scene with 10 bands and 1 label that wants to sign 5 artists, then those bands have a 50/50 shot at getting signed. If the scene suddenly explodes and there are 50 new bands and 2 new labels who each want to sign 5 artists, that's a positive thing. It's growth all around, and more artists getting signed, more albums getting released. But for that batch of new bands they only have a 1-in-5 chance of getting signed. The "early adopters" so to speak benefitted, but that doesn't mean that it's a pyramid scheme. Just supply and demand at work.

They don't because those are not eyeballs that have any interest in advertising whatsoever. Nobody clicks on Facebook ads unless those ads are for things like Facebook games. Nobody searches for products on Facebook, the use Google and similar search engines that are more suited to the task. The idea of Facebook as an advertising platform is a con.

Advertising doesn't (can't even) guarantee success. It simply sells eyeballs. Facebook has eyeballs and they sell them. If nobody is clicking then you simply need to buy cost-per-click ads rather than cost-per-impression. If the quality of those eyeballs is low or they don't translate into real value for the advertisers, their ad rates will fall. Just like how some TV shows are more expensive than others if they reach a more valuable demographic. If Facebook is a total failure as an advertising platform (I'm not convinced of that at all myself) then it will be similar to a failed TV show that no advertisers want to touch, but that doesn't make it a con. I'm sure the people at Facebook want their user's eyeballs to be valuable! It's not like they're trying to sell something that's inherently worthless.

It's not the ads that form the pyramid.

It's the STOCK.

Then in my opinion says nothing about the value of web 2.0 companies and more about the behavior of banks and problems inherent in our financial system.

In a pyramid scheme the early investors get rich and the later suckers are left holding the bag. And yes, that's PRECISELY how a great deal of today's market in internet stocks operates.

A stock is a gamble, but I'm not convinced it's a pyramid. Every company has some potential value and investors are betting on future success. If that success doesn't materialize, the stock fails and investors lose. But there is always a chance of long term success. With a pyramid scheme, there is never any potential value. You're just paying the last guy with the next guy's money, but there's not any actual investment of value.

When Google just seemed like a search engine, I thought it was baffling that they were worth so much, but I didn't predict that they would become the advertising powerhouse they are now. Maybe they are still overvalued, but I think they will be a viable successful company for a very long time. It's still too soon to say with Facebook in my opinion. I think the over the top pessimism could turn out to look as foolish in the long run as any irrational exuberance.

[rack gear]

Originally Posted by grawk

How does that dispute what I said? The predictions didn't change the industry. The industry changed. A new way to succeed has to be found.

things are worse, not better.

maybe the best solution is the simplest one, respecting artists rights to consent, and making sure they are fairly compensated for the exploitation and consumption of their work.

that has a pretty long history of working really well...

[rack gear]

Originally Posted by initialsBB

RG said "the result of every other prediction for musicians regarding the internet has resulted in a net loss of professional musicians."

it factually has resulted in a net loss of professional musicians...

[freetard]

Originally Posted by rack gear

it factually has resulted in a net loss of professional musicians...

But it has not resulted in a net loss of music. If an industry can do more with less manpower, that's typically viewed as a postive thing.

[John Eppstein]

Originally Posted by initialsBB

A stock is a gamble, but I'm not convinced it's a pyramid. Every company has some potential value and investors are betting on future success. If that success doesn't materialize, the stock fails and investors lose. But there is always a chance of long term success. With a pyramid scheme, there is never any potential value. You're just paying the last guy with the next guy's money, but there's not any actual investment of value.

That reveals a common misconception about stocks and the stock market in general.

The purpose of stock is not to provide a form of legal gambling so people can get rich quick.

The purpose of stock is to allow members of the general public to buy stock to fund a corporation's ongoing business efforts. This means that the stock price should reflect the value of the company in regards to the profit return on its products. There are specific formulae for determining whether a stock is overvalued on the market. These formulae plot dividend return against stock price and other factors.

Many internet (and other tech stocks) are WILDLY overvalued relative to their real earnings. This is partly due to deregulation of the market and removal of controls instituted after the crash of 1929. This has brought about an unstable and highly dangerous situation.

It has also enabled pyramid schemes to proliferate, of which Facebook is among one of the most blatant - value of the company wildly inflated prior to an IPO, followed shortly by company insiders declaring sales of huge amounts of personal stock (much larger amounts than normal in a much shorter time frame than normal) in an effort to cash in before the stock tanks completely. This is tantamount to a vote of no confidence in the company by its own leaders.

In other words, it's a pyramid scheme and they didn't even bother to hide it very well.

Don't forget that Bernie Madoff, serving a life sentence for the biggest (to date) pyramid scheme of all time, was the head of NASDAQ.

The entire stock system - ESPECIALLY the field of tech and internet stocks - is rotten. It no longer is serving the purpose which a stock market is intended to serve - funding the business operations of productive companies. The capitalist system needs a stock market to fund corporate operations. It does NOT need an unregulated free-for-all for rampant speculation. That's not what a stock market is for.

[rack gear]

Originally Posted by freetard

But it has not resulted in a net loss of music. If an industry can do more with less manpower, that's typically viewed as a postive thing.

actually did from 2009 to 2010...

http://www.billboard.biz/bbbiz/indus...05042392.story

75,000 Albums Released In U.S. In 2010 — Down 22% From 2009

Not only were fewer albums released, but the weakest sellers took up a smaller share of new release sales. The 60,000 titles that sold from 1 to 100 units represented 0.7% of all sales from titles released in 2010. In 2009, 0.9% of sales came from the 80,000 titles that sold from 1 to 100 units.

So there were quite a few new albums that sold fewer than ten units.

Put another way, the 60,000 new releases that sold 100 or fewer units averaged just 13.3 units per title.

And, I'm not sure I understand... so less people working professionally is a good thing? We have different goals than about what is better for professional musicians...

here's what you get:
SoundClick - Free MP3 music download and much, much more.

who are your top 10 artists there?

[John Eppstein]

Originally Posted by freetard

But it has not resulted in a net loss of music.

Of course it has. Every day I hear people complaining about how there is no good new music anymore.

The amount of new commercial music that does not fit very narrow pop guidelines has dwindled to a trickle. Musical projects that 15 years ago would have had no problem getting funded and released can't get off the ground.

The fact that amateur musicians now can put their stuff online to be ignored by everybody obscures that somewhat - there's a flood of "releases" that go nowhere - but there have always been legions of hobbyists. That's not to say that some of them aren't good, but it's a lot harder now for the good ones to be noticed and rise above the masses because of the background noise. So their music mostly goes nowhere.

If an industry can do more with less manpower, that's typically viewed as a postive thing.

But that's not what's happening. What's happening is that less income has resulted in fewer jobs and fewer opportunities so less is being done.

I don't call a 45.3% drop in employment either positive or "doing more".

Your statement is nothing more than internet propaganda.

[kennybro]

Originally Posted by freetard

KS doesn't take any money unless the project was funded successfully.

That's certainly a plus.

Actually, when I looked at their numbers, 27,000 projects put up in 2011, and 15000 failed to reach goal. That leaves about 12,000 projects that reached goal. If those numbers are accurate, that's not bad. Far better then I would expect.

[freetard]

Originally Posted by rack gear

actually did from 2009 to 2010...

Yeah but from 1999 to 2012 the number of album releases increased... so overall more music is being made in the long term.

[John Eppstein]

Originally Posted by freetard

Yeah but from 1999 to 2012 the number of album releases increased... so overall more music is being made in the long term.

And 99% of those sold less than 10 copies. Which tends to indicate that most of those "album releases" were not professional, quality releases at all, they were just random "bedroom artists" throwing up stuff on the internet. Essentially the same thing as acts selling their home made cassettes and CDs at gigs, except that those "releases" didn't get counted in the surveys and stuff on the internet does. It's not a real increase, it's an illusion.

And according to the figures I've seen the number of releases DECREASED in 2011. I don't see how you can claim any figures for 2012, it's not even half done.

[freetard]

Originally Posted by John Eppstein

most of those "album releases" were not professional, quality releases at all

In your opinion.

[rack gear]

Originally Posted by freetard

Yeah but from 1999 to 2012 the number of album releases increased... so overall more music is being made in the long term.

we'll see, but even at that, less people working professionally is a good thing? We have different goals than about what is better for professional musicians...

and, who are your top 10 favorite artists here again?
Search Results for "soundlclick.com"

[freetard]

Originally Posted by rack gear

we'll see, but even at that, less people working professionally is a good thing?

Yes. The primary purpose of an industry is not to provide welfare for its members. It is to produce something with the minimal amount of cost.

[chrisso]

Originally Posted by freetard

Yes. The primary purpose of an industry is not to provide welfare for its members. It is to produce something with the minimal amount of cost.

Except without a vibrant (some would say happy) work force the industry dies.
So you think Apple, Google and Facebook don't care one jot about the welfare of their employees? The evidence directly contradicts your point of view.
My, how you are inexperienced and naive.

[freetard]

Originally Posted by chrisso

Except without a vibrant (some would say happy) work force the industry dies.
So you think Apple, Google and Facebook don't care one jot about the welfare of their employees? The evidence directly contradicts your point of view.
My, how you are inexperienced and naive.

The care only care enough that they can get the job done. The recuitment in the computer industry is among the most competitive, so they have to hand over shiny baubles to hire and retain a workforce to begin with.

[John Eppstein]

Originally Posted by freetard

Yes. The primary purpose of an industry is not to provide welfare for its members. It is to produce something with the minimal amount of cost.

Absolutely wrong.

The purpose of an artistic industry is to produce something with the maximum amount of QUALITY.

And that is incompatible with your "minimum cost" theory.

And of course it must provide support for its members, or those members will go elsewhere and you're left with no industry at all.

[John Eppstein]

Originally Posted by freetard

The care only care enough that they can get the job done. The recuitment in the computer industry is among the most competitive, so they have to hand over shiny baubles to hire and retain a workforce to begin with.

Nonsense.

[chrisso]

Originally Posted by freetard

The care only care enough that they can get the job done. The recuitment in the computer industry is among the most competitive, so they have to hand over shiny baubles to hire and retain a workforce to begin with.

Really? So you've never seen any evidence of exercise programs, relaxed work spaces, flexible hours, maternity/paternity leave, team bonding courses, office canteens with healthy food options, water coolers, Christmas parties?

[freetard]

Originally Posted by chrisso

Really? So you've never seen any evidence of exercise programs, relaxed work spaces, flexible hours, maternity/paternity leave, team bonding courses, office canteens with healthy food options, water coolers, Christmas parties?

Yeah these employeers do this out of the goodness of their heart.