Indieheaven Blog

I have worked with thousands of independent artists since 1997. I’m based in Franklin, TN, ground zero for the CCM industry. I rub shoulders with many of the execs from the labels. The Lord has given me favor with the industry, even though what God has called me to is to provide an alternate path for artists who are on a mission. That is my prayer, that God would open the doors for me to usher in new music that is born not from pride, but from humility and service. As you can tell, I have an issue with pride, probably because I suffer from it so much myself.

I want to share about the FUTURE of MUSIC and how it affects YOU. And at the end of this article, I’ll share my thoughts on how to make your mission possible. Before I get started, I want you to know I am not anti-industry. I am pro-success. I simply want to communicate to you the state of the recording industry.

Let’s take a look at some recent stats on the sales of recorded music. The U.S. record industry issued 75,774 album titles in 2006, or 15,000 more than the 60,331 albums that came out in 2005. Despite that jump, new-release sales dropped 9.4% last year to 220 million. (Source: Billboard Magazine, May 12, 2007) However, 55,516, or 73.3% of all new releases last year failed to even sell 100 units.

So why do many indies continue to try and break in?

For the recent fiscal year, EMI, home to SPARROW Records, lost $519.5 million, a reversal from year-ago profits of $232.8 million. EMI is being split in half, the recording and publishing divisions are separate companies, thousands of EMI jobs have been terminated, and a company known for gutting and reselling called TERRA FIRMA has purchased EMI. BMG is seeking a divorce from SONY and demanding to be bought out for a cool 1.5 Billion dollars. They have had enough of the music business, and will go back to their core business, which is selling whiskey and other liquors. Warner shares are at an all time low as investors are pulling out. Other labels are also suffering financially, and the year-over-year sales gap continues to widen.

So why do many indies continue to try and break in?

New York-based Pali Research recently reaffirmed its sell rating on Warner Music Group, a development that comes alongside an already-depressed Wall Street valuation. Pali also states, “Our key takeaway is that the music business is eroding far faster than Warner Music Group management expected and that recent cost cutting measures are dire measures to mitigate the pain of severe (and completely unanticipated) revenue declines. The recorded music business is in ‘freefall’ and the risk going forward is that the relative stability of music publishing revenues begins to crack (due to mechanical royalties),” the report noted. The team also broiled Warner management for understating the impact of piracy, especially given recent-quarter declines. “It is also abundantly clear that music industry management teams are not being upfront with investors on how bad the piracy problem is,” the note continued. “Piracy is getting worse - with the problem being exacerbated by the fact that piracy is getting harder to track. Not good news.

So why do many indies continue to try and break in?

Major CCM group, FFH was released from their contract after selling 2 MILLION records at Essential Records. My friend, Robert Beeson, who FOUNDED Essential Records left PROVIDENT last year after telling me he grew tired of endless meetings with the marketing dept. trying to figure out the next big thing. Robert founded his own independent music company called “The Kindred Group” and re-signed FFH to an indie friendly deal. FFH seems very happy! Robert seems very happy!

What is going on? Why is the recording industry in turmoil, and what does this mean to independent artists? The bottom line is that the recording industry is a big machine that has used artists as cans of oil to lubricate its gears for years, and the time has come where it cannot maintain profit margins because the amount of profit has decreased.

So why do many indies continue to try and break in?

We owe that to Steve Jobs and APPLE, who set the industry spinning by devaluing music to less than a $1.00 per song. APPLE has the recording industry by the throat, because APPLE provided a way for consumers to pick and choose single songs for 99 cents, instead of having to pay $18.98 for a CD at TOWER Records. BTW.. Tower Records, one of the largest retailers of music is now out of business! So, the Profit per customer has markedly decreased and its effect is rippling through the recording industry.

When a CD is sold for say, $15.00 the label makes about $5.00 profit. When a single is sold for 99 cents the label makes about 30 cents profit. It’s easy to see why the recording industry is in deep trouble. For any business to survive, it needs a steady flow of income. No flow of income, the business goes out of business.

Not only is the recording industry suffering from decreased cash flow, it is suffering from a lack of credible new talent. Consumers are fickle; they are always looking for the next big artist. Problem is, big artists are few and far between and new music often leaves fans wanting better content.

Lets look at the CCM Industry, if you look at new releases from the labels, you will find allot of compilation CDS, Best of CDs, and a re-hashing of older artists with past success.

I sat with one of my label pals a few weeks ago and I asked him, how is it going for you guys?
He shook his head, had a look of despair and said to me; “We are in a state of disarray, we don’t quite know what to do. It’s not looking good these days.”

I asked him what was he working on. He related that he was busy on a project with a long time CCM artist to re-release older songs and a DVD of video shot behind the scenes from tours and studio recordings. I asked him were they working with any new artists. He said they had a new female artist they were working with and that they had her writing new songs as she wasn’t quite ready to be released. Wow! Where is all the artist development these days?

So why do many indies continue to try and break in?

Mark my words folks, we are going to see a dramatic change in the CCM Industry very soon. It is coming. Why is it coming? It is because the BIG 3 CCM labels decided some years back to sell out the major secular labels. Why did they do that?

I think it is because they bought into satan’s biggest lie, that BIGGER is BETTER. You do recall in the WORD when satan tempted the Lord that the WORLD would be HIS if he partnered with HIM. Jesus resisted the tempter, thankfully.. He saw the trap and did not give in to PRIDE. He was without SIN.

Now, I do not think the desire to be bigger is necessarily evil or bad.. it was the MOTIVE behind the desire, the motive was MONEY. Money became the god of CCM. The CCM Industry wanted to be loved by the world to increase their profit. They were not real concerned with being IN the world or even being OF the world; the issue is they wanted to be LOVED by the world. It is now coming back to be a huge issue. Their thirst for profit cannot be quenched, because the well is running DRY!

See, the major labels are like 747 Jets, they cannot turn real fast. It takes allot of air space to turn a big jet. Same goes for the labels. They cannot just change their business models overnight. In my opinion, if the labels would have remained in believers’ hands and not sold out, maybe they wouldn’t be in the same quandary that the major secular labels are in. You make your bed, you lay in it.

We’re going back to the way it was in the 50s, which was a singles driven market. That was the way labels used to introduce new artists and sell music. They sold 45’s, you know, those little plastic discs with the big holes in them. Then came the LP’s, or long playing vinyl records. The labels could sell them for much more money and make more profit per customer. Artists released concept albums, and labels spent a ton of money on the projects, because they had more cash flow. They also became bloated juggernauts, like a fat tick that was full of artist’s blood. Then came CDs, which cost much less to manufacture than vinyl, yet labels raised the price of the albums. One word comes to my mind, GREED!

And then the internet was discovered by Al Gore, and the rules changed forever. No longer did labels have control over the distribution channel. And then there was PIRACY. People being people wanted the music for FREE, and free my friends, is a very hard model to compete with.

Recently, INO artist Derek Webb released a new project for FREE. The catch was, In order to download Derek’s music, the person had to provide 5 other email addresses to the label and THEN, they received an email with a link to download Derek’s songs. For each person who downloaded Derek’s songs, INO harvested 6 email addresses. Why would INO agree to such an offer? They were the first label I am aware of that used music as a LOSS LEADER to gain data on those who downloaded Derek’s songs. Capturing customer DATA was more important to them than the PROFIT from the sale of Derek’s music. Interesting to say the least. Derek has started a website where artists can give away their songs for free to get fan data.

Do you know what a loss leader is? Grocery stores do it all the time.. They would rather promote a few items that are such a great deal to you and are willing to lose money by selling them, but they end up making more profit off of you because they get you into their stores and you being a consumer will buy more stuff. Did you know that Wal-Mart, Target and Best Buy lose money on music sales? Why would they be OK with that? It’s to get you to come to their stores. They hope you buy a 52″ Plasma Screen TV, a washing machine, or who knows what else. It works and that is why they do it.

The bottom line is this; MUSIC HAS BEEN DEVALUED TO WHERE IT IS WORTH NOTHING TO PEOPLE. Its become a LOSS LEADER. But for INO, they gained thousands and thousands of people’s email addresses and I’m sure other data that they will use to market future Derek Webb releases and other artists on their roster. Interestingly, INO is an INDEPENDENT record label who has revolutionized the CCM industry by structuring their record contracts in a way that benefits their artists and compensates them much more. They are a LEAR JET!

Even though the economic picture is not rosy for the recording industry, it is for indies. The time could not be better for Independent artists who are proactive and who are smart. However, I come across many inactive and ignorant artists out there in Indie-land. For those artists, they will wander the desert for a long time until they either give up or get smart! For those who work hard at their mission and pray hard for it, it can be Mission Possible! I read recently that the barrier to success isn’t ignorance; it is the illusion of knowledge. Many think they know it all, that the reason they haven’t “made it” yet is because they haven’t been discovered. Why would they still be chasing after the recording industry if they knew what was really happening?

Here are my thoughts on how to make YOUR mission, “MISSION POSSIBLE!”

NETWORK- USE IT OR LOSE IT!- Its not only who YOU know.. but who knows YOU! Cultivate relationships ALL of the time. You are only 1 relationship away from success. Make REAL relationships. Do not spend 24 hours a day plastering your picture and banner on social networking sites. That is a waste of time. There are so many artists out there that no one takes the time to click on your banner when there are 100 million other ones just like it. Make real relationships by getting off of your computers and going out into the world. There is a real world out there. Go experience it. Spread the Gospel at all times and use music if you must. Make more than friends, make a career! We have a killer Network here on Indieheaven. Check it out at: www.indieheaven.com/network

MAKE YOUR VISION PROFESSIONAL AND THE PRO-VISION WILL COME- I bet those of you reading this post want to make a full time living with your music. GREAT! I say go for it, however make sure your VISION is professional. If it is, your vision will result in PRO-VISION! If you don’t know how to make your vision professional, get involved with my Indieheaven organization, get involved with our online forum, where we discuss what it takes to get professional. KNOWLEDGE is POWER. The more you KNOW, the more you’ll GROW. You LEARN by DOING. Your mission is a process of elimination. Eliminate activities that get in the way of success. That would be wasting time watching TV, or wasting time online looking at things you shouldn’t be looking at.

Did you know the things you say NO to are more important than the things you say YES to? That’s because it frees you up to invest your resources and time into things that are effective. I find many indie artists investing their time and resources into things that do not make sense for where they are career wise. You have to be SMART to succeed! Don’t put the cart before the Horse.

SEEK OPPORTUNITY BUT DO NOT BE AN OPPORTUNIST- There is a difference between seeking out opportunities and being an opportunist. It’s pretty easy for me to spot an artist who is more concerned with their own success than being a part of something that blesses more than just themselves. Its a heart-itude. Be aware of what is happening around you. Opportunity knocks all the time.. but most never hear it because they are too busy trying to bang down doors. They never hear it over their own clatter of self.

TAKE EVERY OPPORTUNITY TO GET IN FRONT OF LIVE HUMANS TO SHARE YOUR MUSIC- Look for GOD BOOKINGS. What is a GOD BOOKING? It’s those opportunities that come totally unexpected. Make sure to TAKE these bookings regardless of what it appears you will get out of it. No pay? No way? Not with a GOD BOOKING. GOD BOOKINGS happen more for those who are attentive to the Holy Spirit and who are dialed into where the Lord hangs out. Its like a frequency on the radio, the Lord transmits on a certain frequency for each one of us. Find out what that frequency is and dial in often. You’ll hear the best programming you’ve ever heard! The way you find out the frequency is by turning a dial called, “prayer.”

ALL SUCCESS IS BUILT ON INCONVENIENCE- Being successful is HARD WORK. You need to count the costs involved with pursuing music ministry full time. If you are used to living a lifestyle that is based around an $80,000 per year salary.. you are going to have a tough time making it as a Christian musician. I met with a band recently who wants me to manage them. I asked them.. what do you want to have happen in your music mission? They replied, “We want to go full time.” Doesn’t everyone, I thought to myself. I asked each of the 6 members how much they currently earn at their real jobs, it added up to $325,000 per year.. I told them.. “dont quit yer day jobs.” They got the point. They want something they can’t afford to do because of their lifestyle. COUNT THE COSTS.

CREATE MOMENTUM- Do something to further your music mission every single day. Those who wait for something to happen end up being waiters at Starbucks. Look to the Word for examples of what the Lord did when humans heard His voice, obeyed His VOICE and got off their butts. Water into wine.. Walking on water.. Raising Lazarus.. feeding the multitudes.. The Lord could have easily done these miracles without humans.. what He was after was OBEDIENCE. The WORD says, OBEDIENCE is BETTER than SACRIFICE. So.. create momentum ALL the time.. and watch how the Lord does His miracles in your mission and In your life.. He wants to demonstrate his FAITHFULNESS when we OBEY!

ARE YOU READY, WILLING AND ABLE- Are you READY to make a go at your music mission? Are you WILLING to count the costs and to sacrifice? Are you ABLE to produce content that is compelling, and connect with people? It is very important to find out what field you should play the game on. Too many are little leaguers who think they should be playing in the majors. They waste a lot of time and resources trying to break into something that simply will not break. This is lunacy. Doing the same thing over and over again, but getting the same results is irrational and delusional. There is nothing wrong with serving your church and your local community. We have to get out of the mindset that bigger is better. Rarely is that the case. Most of what I hear and see from indies are minor league performances! No problem with that, the minor leagues is a great place to hone your skills. Also, the minor leagues have more players, more stadiums and more fans than the majors! Being in the minors does not mean you are not any good. It simply means you are still learning how to throw strikes and hit home runs! Play the game and practice, practice, practice! Remember, you learn by doing.

FIND YOUR VOICE AND HELP OTHERS FIND THEIRS- One of my favorite writers is Steven Covey. His book, “7 Habits of highly successful people” is a great read. Stephen’s latest book, called “The 8th Habit, FIND YOUR VOICE AND HELP OTHERS FIND THEIRS” is tremendous! This is SO POWERFUL and this is what I do every day on my mission with Indieheaven. Finding your voice means discovering who YOU are in Christ and discovering what makes YOU passionate and excited. Through that passion and excitement, you serve others and help them find their passion. Ministry is all about service. When did ministry and even our faith in Christ become a self-serving, self-help philosophy? We have to get back to the example Christ set for us. He gave His life for us. Are you willing to lay down your dreams, your desires, and your ambitions to serve others? I encourage you to take your mission to the mountaintop and take the sword to it! What the Lord wants to know from all of us is this; are we willing to sacrifice what we want?

SHINING YOUR LIGHT vs. SHAMELESS SELF PROMOTION- We are in interesting times. The internet has provided a platform for mediocre artists to share their content before they are ready, and all they have accomplished is telling the world how mediocre they are. Be careful what you put online. I cringe when I see an artist blasting out.. “Come check out our new stuff” and when you listen to it.. it causes you to pray for them. Now that is some ministry they have! Just because you feel God has given you a song does not mean its a GREAT song.. It may mean He didnt want it anymore…When I hear an artist say, “I wrote this song in 5 minutes.. its soooooooooooo good.. 99.9999% of the time.. the song is not good. It takes time to cook a great song, rarely is a smash hit written without many revisions.. Remember.. your music is like a restaurant and YOU are the chef. You wouldn’t want to serve half cooked food to your customers would you? Why are many artists in such a hurry to force-feed their half cooked songs?

Go from GOOD to GREAT! Good is the ENEMY of GREAT. I see alot of GOOD.. but little GREAT. People are drawn to GREATNESS. GREAT content finds a way! People are also drawn to PASSION. When you couple GREATNESS with PASSION, you will find more opportunities and more potential to impact the culture.

I could go on and on.. God has called me to be an encourager and to also teach the truth. The Truth shall set us free, free from self. The largest record label known to mankind is “PRIDE RECORDS.” It has millions of artists on its roster. Make sure you do not get signed to that label.

We’re all looking for our “big break.” Our big BREAK comes when we a broken and humbled before Christ. Psalm 51:17 says.. “A broken and contrite heart God will not despise.” Sign to BROKEN RECORDS my indie friends!

I encourage all of us to Die to Self daily. Accept the portion God has for you. Work HARD at your calling and pray HARD for it. Give it 100% WORK and 100% FAITH. That equals 200% success.

Until next time, may your field of dreams be lined with work down first and faith down third.
Keith Mohr

Articles Christian Music Industry, Independent Christian Music, Indie Christian Music