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Doing the maths

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Yet without the huge marketing and promotion machine, backed by massive spending that only the major labels continue to provide, how can artists succeed?

What we can learn from artists

Perhaps we can learn from Tila Tequia, a MySpace celebrity who currently has 1.7 million friends on the site. She is releasing her first track exclusively on iTunes.

Reportedly, Tila Tequila turned down two offers from record labels in order to make the deal with iTunes because, as her website states: "Having absolute control over the kind of music she released and how she was portrayed was more important than being part of the system."

Tequila will not have to split her royalties with a record label and can receive a greater percentage of the proceeds than if she used an aggregator. The track, I Lov U was produced by famed rap producer Lil Jon, and the video for the track will be available for free on iTunes for a two week window.

This artist has been able to do her own marketing online and make herself a brand without using a major record company, one that would take her sound recording copyright and pay her only a small royalty. And she is now able to distribute without the help of the aggregators, because iTunes is eager to help her sell her music although it usually does not deal with indie artists directly.

Another distribution model that artists can use is exemplified by Jeff "Tain" Watts, the Grammy winning American Jazz musician. Tain has just completed recording an album, Folk's Songs for less than $15,000. He has an established fan base including Europeans and Japanese jazz aficionados, and commands $100 a head for his live performances. Tain will be doing email blasts and advertising the new album on his website and MySpace page, and may sell by download on his site.

Here's the kicker.

Tain only needs to sell 1,200 full albums at $12 a download (or 1,500 at $9.99) to recoup his production costs. Additional sales represent pure profit. The labels have been widely vilified for giving us generic boy bands and teenage girls who can hardly sing. For her part, Tina Tequlia does not exactly look to be the next Miles Davis. So perhaps the internet, similar to the majors, will service the lowest common denominator, at least in terms of artists who achieve commercial success.

But at least this way, the artists will be getting the money instead of their record companies. ®

© Steve Gordon 2007. Steve is an entertainment attorney and consultant in New York, and the author of The Future Of The Music Business. He was Director of Business Affairs, TV and Video at Sony Music for ten years. His website is at www.stevegordonlaw.com.

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