Music to the USA

(Last updated: 7 July 2008)

Trends and opportunities

The market

The US music industry dominates the US$37 billion global music market. Four US-based major record labels underwrite the US global market leadership. The four majors – Sony/BMG, EMI, Universal and Warner – each own multiple labels. Some industry sources estimate the five represent as much as 90 per cent of the US market and 75 per cent of the global market. Outside these major players are independent record companies, which are usually still identified with a single label or music type.

While the International Federation of the Phonographic Industry (IFPF) estimated that global record sales grew from US$24 billion to US$37 billion in the 1990s, the industry made a well publicised shaky start to the decade with year-on-year sales in decline. The decline was attributed to CD-R copying and the growth of peer-to-peer file sharing. 

Industry sources now predict a brighter outlook, with greater control of online file exchange and CD copying, although the experience has had an effect on the industry, with traditional business models and market channels reassessed in light of the digital revolution.

The roles of the labels are changing. Historically, the majors have coordinated most of the above processes for their artists.

Independent labels, on the other hand, have had few of the administrative capabilities of the major labels. Their strong point has been signing and producing new or special interest music, but they often have to contract out other elements, hiring independent public relations firms, distributors, studios, and disk factories.

Whether due to burdensome cost structures that could not sustain the digital challenge or other reasons, by 2003 the majors were all struggling amid the bleak industry conditions and the less structured independent labels have proven more resilient.

Opportunities

Australian artists are well positioned to market into the US. There is a growing interest in Australian music, fuelled by a reported rock revival and following recent high profile successes such as the Vines, John Butler Trio, Jet, The Veronicas, and other recent major label signings.

US music industry observers report renewed attention on bands from Australia and New Zealand, drawn by the rawness of the Australian live music product, born and bred in pubs and clubs throughout the country.

Marketing your products and services

Market entry

The digital revolution and the effect it has had on the industry structure is good news for Australian acts. The historically dominant major label structures, which have not been conducive to marketing music from small foreign acts, are breaking down.

The US is already a target market for most Australian acts, however, doing music business in the US does not come easily. The extent of the market leads to opportunity but the music business in the US is more about hard work than glamour. With the expense of marketing in the US it is not a market where acts can learn as they go – market readiness is vital.

Build the story

Australian acts need to be able to do as much business development work as possible from Australia before making the investment in visiting or touring in what is a very expensive market – getting a ‘leg-up Down Under’ is essential.

Australian acts can show US buyers that they are serious by building their ‘story’ in Australia, having the kinks worked out of their business, and having proven success in Australia. Examples of a story include significant radio airplay, touring ability, album sales, or press. These will not only give experience in dealing with those aspects of promotion, but can be used as fuel for the sales pitch.

Go digital

The digital revolution has provided some assistance in this regard. The Internet is making it easier for Australian acts to market their product in the US – MP3s can now be emailed to the US from Australia instantly.

While Internet marketing campaigns are only beginning to take hold in Australia, most marketers in the US see their Internet strategy as a cornerstone of any marketing campaign. An act should foster an active online community, through sites such as Myspace.com or fan sites. The key advantage to Internet marketing is its cost effectiveness, and the fact that it can all be done from Australia.

Have a marketing plan – and follow it

It’s really best if an act can guide people when asking for support or help. Knowing where their needs are is imperative. There are so many areas that need to be covered, for example, touring, recording, licensing, shopping for deals, showcasing, and sponsorships. 

It’s very important that the act knows what they need, and when they need it. It’s really best to work out a marketing plan with a manager, and prioritise what areas should be focused on. Arriving in the US and simply saying, ‘Can you help us?’ often leads to nothing getting done.

The following are various other tools for market entry and exposure in the US:

• Radio: For an unknown artist commercial radio is probably out of the question. Research and submit music to college and public radios.
• Press: Traditional print media and online outlets should be an important component of a marketing plan.
• Tour:  Book regional tours to gain fans, industry awareness and personal market insight.
• Retail: Consider arranging in-store performances at local record stores while passing through the market.
• Internet: Check out cdbaby.com, Myspace.com, and target fan sites of artists that are similar to the act’s sound.
• Film/TV: Licensing tracks to film/TV is increasingly becoming an integral part of building the ‘story’.

Most importantly, doing research is vital:

• Know who the key players are for the type of music that is being created
• Know the history and methods that other similar acts used to break themselves
• Set up as many meetings and shows as possible before entering the US market
• Never underestimate the power of networking and building of relationships over the long term

Remember that nothing happens overnight. It takes most acts years of hard work and dedication to crack any market.

Links and industry contacts

Music–related resources

Australian Record Industry Association – www.aria.com.au
Association of Independent Record Labels – www.air.org.au
International Music Managers Forum – www.immf.net