It’s a privilege to be among so many smart, creative and passionate people in the audience. Tonight to help make some history with this inaugural salon, we are launching a website in Halifax as I speak.
I also feel privileged to be the first speaker of this Salon and want to thank Simon and all of you for being here.
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My speech tonight is about the cover charge you paid . It’s somewhat amazing that you don’t even know what you’re getting. You don’t know me. I don’t know you.
Out of curiosity, how many of you paid full price at the door to get in.
(About 2/3 to ¾ raised their hands).
Wow, a lot of you got in for free, including me.
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The admission fee was a fixed price or prix fixe. Was it worth it? Was it worth more or less? You don’t even know yet.
These are the questions I asked about a 99 cent song when I was once involved with incubating and financing a download store with music labels like Universal Music, EMI, and BMG...
We didn’t even know if people would buy a download. And one day a dude said, it will be worth $0.99.
Was it worth more, or less…we didn’t know.
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There was also something wrong about what we did.. You needed a credit card to buy it. That only appealed to young professionals aged 25 and up who had a credit card. We failed to facilitate a very important audience.
We left out fans who pay in cash. I would even argue, most music fans pay in cash.
Do you remember when you were a teenager and there was not enough music to satisfy you? Do you remember when music formed your identity? Do you remember where you spent your money?
Even the CEO of Universal Music would concede that music is first discovered at age nine to 12 or earlier - these kids become voracious consumers of music, with an appetite that cannot be satisfied.
One year, I noticed at music venues, that I was the only one flipping out a credit card. Most people paid in cash.
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I want to talk about a new model today. It’s actually an old model when Artists sought patronage. Much of Rome was built this way.
You could go up to a patron and say, “I have this vision for the Sistine Chapel.” Can you help?
Charities already do this. I think this is also the model for artists who want to make something beautiful.
I want to show a world tonight that goes far past the $0.99 download.
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In Vancouver I saw a play by Jericho Beach (Coriaolanus at Jericho Arts Centre starring Joshua Drebit, March 10, 2009). It was in a fantastic theater, the actors and actresses would be right in your face, lunging at you with their swords. That Tuesday night, it happened to be a "pay what you can" night. The idea was to enable access to starving students (and starving artists for that matter). Out of curiosity, I asked the gatekeeper, what was the average donation. She replied "$20." It equaled the regular ticket price.
I then asked the bar how much was made – and I was told a record night was had, giving this play its most profitable night.
This night here is not by donation.
I ask...those of you who came free...would you have donated?
(On that note, tip your servers well, and buy tickets to keep this salon alive)
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In October, 2007, Radiohead did something the music industry couldn’t believe.
They released an album called In Rainbows online and asked music lovers to pay what they wanted. There was no fixed price.
Would people do this? Or just download it for free. Most pundits thought the latter.
1.2 million copies were downloaded - and get this - at an average donation equal to the CD price. In addition, enough people to fill Giants Stadium pre-ordered the box set.
This really showed me you could sell more than a 99-cent download. You could bundle many things an Artist could offer. It showed me pricing and income could be more elastic for the arts.
I argue people are even willing to prepay for an album yet to be made by someone who inspires them.
Fans, I say, are also willing to prepay for first rights to Radiohead concert tickets. Fans would love to be recognized for their support. This is no different than what donors do for charities, for something that matters, for something that inspires them.
Later in the night, I was of course asked, but didn't Radiohead succeed because they are big? This is the most common retort to the Radiohead feat. I always answer, yeah, but there are even bigger acts like Madonna, but they didn’t do it. The key thing is the inspiration. If you inspire a fan, they will come. No matter how small or big you are. Another person referenced K-OS who offered free concert tickets up front and then asked fans to pay what they could on their way out. It was a failure. Was In Rainbows a one off success? I answered, well, the first thing I need to say is that it was a mistake to do this on the way out. People are in a rush to leave, avoid traffic. People can be drunk or smoked up. It’s key to do this beforehand or after some inspiration occurred, during the show. This is what happens at a tip jar that inspired me in New York City.
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At 32 Jones Street in New York City…you will find the last surviving music café in the Village (Caffe Vivaldi). It’s been under the same ownership for 26 years. On a good night, a fan will donate $35 to an Artist who inspires them. There’s no cover charge.
Last August, this music café fell on hard times. This is a place where Woody Allen shot two films. Bob Dylan was photographed in front for his breakthrough album Freewheelin' Bob Dylan. And every month 3000 Artists try to book a gig there. The economy had restrained Artist support. Then one day, for one day, a fundraiser saved it.
A bailout by believers.
It’s here Artists are paid 100% by the tip jar passed around the room. It's here a tip jar saved a music café.
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Now let’s go back to the 99 cent model.
For 99 cents, you don’t even get a picture or a story with the download. You can't get a lot of jazz or classical music. You might even lose all your songs when you switch computers. This happened to me. I lost 3000 songs which were difficult to move onto another machine one by one.
Who gets rich off of this? Apple.
Apple doesn’t care about download sales. Apple cares about iPod sales. Apple is the king of this distribution chain. Then it’s the music labels and their business partners. But who represents the Artist in this deal? No one. Other than some collective figment of imagination.
The Artist in this equation is only seen as a thumbnail, metadata, and a download we must process through some technology. I confess I was once one of them thinking this way.
We also spoke of a long tail – how there is more access to more songs. 1 million songs (Ed. ~ there are now 3 million in 2010). Having said this, there is also a short tail. 20 songs sell 80% of the revenues some months. What happens to the rest?
I have seen the royalty cheques of independent artists who are selling well. You would be lucky to see $100 whenever it comes. (Ed. ~ in the post-pay model, Artist must spend money to produce, and wait for whatever royalties are left years later).
This is the digital revolution that is not televised.
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Hopefully, I won’t blow a deal in the future by calling these people scammers. But let’s look at MySpace, Facebook, YouTube, Twitter, Flickr, Blogger and other free online services.
You post your content online for free. Rupert Murdoch earns a billion dollars. And what does he pay you? Not one penny.
We used to complain about how music labels exploited Artists in a five-record deal. But look at the deal you are signing now. Rupert Murdoch is signing you to a five-song deal, he owns the rights, he makes a billion dollars, and he pays you nothing. (with sarcasm): That’s pretty good!
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I often hear the word free. Let’s give away our music for free. But nothing valuable is free. Not even water.
Yes, you can give away your music for free. I will even accept it out of sympathy because I don’t want to reject you.
But I will also say at that music café, there have been jokes after, about giveaways. “Here’s another coaster for a beer.”
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If your work is truly inspirational. It is not worth zero. If you cannot inspire, then frankly, you are not good enough. Either way, by calling your work free, you are pegging the value of your work as zero.
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I have also heard, let’s give it away to reach more people. But are you?
There’s a big problem with the internet – with this long tail.
Taste-serving has not been mastered. This is where the Old World does a better job.
95% of what I receive online is junk. It’s not to say it’s all bad (although a lot of it is). Much of it is not to my taste. I would be a happy camper if 1 in 10 things I saw, I liked. But this is frankly not the case. In the long tail, i pay attention less (because of taste).
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I believe in a New World.
Of pay what you want, for what you want.
Tonight, I would like to pay someone here $200 for a beautiful photo of this Salon, preferably with a French ambience.
Where can I go online to make this pledge?
Alternatively, you could offer this photo for donations.
This is why tonight we are launching an online tip jar called Givernation for someone who inspires you. Or for inspiring work you want to commission.
I want to note, this is not about begging. You still have to inspire. If you cannot, you are frankly not good enough. You have to be Michaelangelo and show your vision for the Sistine Chapel.
You have to have vision.
We saw this with Obama online. You need to be like Obama with your Art.
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I want to close by saying, Craig’s List showed me you can facilitate those who pay in cash.
Imagine a day, when you have an offer in Germany, a place to stay, and someone waiting to buy your next CD.
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A woman named Ruth spoke after me. I was very humbled to see a rural speaker. A first for me. She told us of a story of how she could not get bank financing for her cheese-making, an art she clearly knew well.
The bank would not finance her. She managed to get $250,000 from online subscribers prepaying for cheese. This is the digital media form of shares, or futures, as she calls them. She is now grossing more than $1 million in revenues at a profit of $150,000. She donates part of the profits to Doctors Without Borders. You can find her in St. Lawrence Market in Toronto on Saturdays.
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This speech took place at 1087 Queen for the inaugural Salon "Heads" in Toronto’s first YMCA, where Toronto had its first game of basketball, a Canadian invention (McGill University). The Great Hall was built in 1912 and is haunted, according to Tony, the owner.
(Time Capsule: October 8, 2009)