One on One with Tom Silverman: The Surprises that Shaped New Music Seminar 2012

EAST VILLAGE, MANHATTAN: Don’t come to this year’s New Music Seminar (NMS) and expect to just lie back and learn something – in 2012, those who show up will be called on to actively collaborate in moving the music industry forward.

The NMS' Tom Silverman knows his numbers.

That’s the message from NMS Founder and Executive Director Tom Silverman, who’s overseeing NYC’s most ambitious music business event, taking place from June 17-19 at Webster Hall: Silverman and his partners have not resurrected the NMS just to dispense the same DIY information that can be pieced together on the Internet. Instead, he’s challenging this year’s attendees to take an active part in the often-puzzling conversations that revolve around today’s music business.

This year’s NMS will have no shortage of thought leaders for attendees to interact with. A huge list of industry “players” will be on hand to lead the discussions, “movements” (panel is a dirty word here), workshops and networking events at NMS 2012: Keynotes will come from Clear Channel CEO Bob Pittman and digital music futurist/Founders Fund Executive General Partner, Sean Parker, joined later on by executives from the likes of Lava Records, SoundExchange, Pandora, BMI, Official.FM, plus studio talents Benny Blanco, David Kahne, Just Blaze and more. (See the full listing here.)

In addition to all the education, the seminar has also added the NMS New York Music Festival, a four-day affair running June 17-20, presenting 150 bands across Manhattan and Brooklyn.

Silverman, Founder and Chairman of the hugely successful dance label Tommy Boy Records, also founded the original New Music Seminar for its original run from 1981 to 1995, then brought it back again in 2010 after a lengthy hiatus, reconceived as a multicity event stretching clear to LA. He may sound like he’s shooting from the hip at first, until you realize he’s expertly versed in the numbers of the music industry: money made, units moved, and myriad other key data. A record industry veteran with a passion for converging art and commerce, count on his conclusions to be anchored in careful research — and not just blatant opinion.

Never shy to speak his mind, Silverman talked energetically with SonicScoop about lessons learned from the past few NMS gatherings, some surprising observations about artists today, and what it will take to return venture capital confidence in the music industry.

NMS returned to NYC two years ago. What was behind the decision of you and the seminar’s other executive directors, Dave Lory and Pam Workman, to re-launch NMS?

The reason we re-launched the New Music Seminar was to change the dialogue in the business. We wanted to start taking a serious look at which music business would replace the old record business, which is a dead business model with no future. But no one had been creating a forum discussing what to replace it with.

This year we’ve assembled the biggest gathering of change agents in the music business since Woodstock, in terms both of the level of speakers that we have, and how many of them that we have. And we’re still only scratching the surface. We could have added ten more events, but we’ve only got 2.5 days — there’s so much more we could be talking about.

After doing the NMS a few times now, what have you learned, and what opportunities did you see for the NMS to serve its audience even better this time around?

In the past, we thought every artist wanted to be a DIY artist doing what Amanda Palmer is doing. The DIY artist is not a new concept: Righteous Babe is owned by Ani DiFranco, who was DIY before there was an Internet. The tools that exist now allow you to be a DIY artist, monetize with many methods, and leverage distribution in ways that you couldn’t before.

Not everyone can go Amanda Palmers $1 million DIY way -- and not everyone wants to.

The big surprise we received is that most artists don’t want to do it themselves! They want to find a team, find a label – they’re still sending out links trying to get labels to pick them up. You can see how thousands of bands at SXSW want to get signed. They’re sending up a signal flare to get help for their career.

That’s interesting, because a lot of people in the mainstream press are saying, “You don’t need a label anymore.” But in reality, hardly anyone really wants to just be DIY, because although it’s much easier to be DIY today, it’s not easier to break through.

What makes you say that?

In 2009, for example, we broke down the SoundScan numbers for the year and we only found 200 artists that year sold above 10,000 units. That’s an arbitrary line we call “The Obscurity Line,” that represents to us being somewhat on the map.

Of these 200 albums that sold above 10,000, most of those are from established artists: Of the 200 artists who did it that year, 192 of them were on major labels or significant indie labels. The remainder – eight – were what could be regarded as DIY artists.

Probably if we looked at 1995, we would have found a higher DIY percentage breaking through. Eight out of 200 isn’t that much. So it’s interesting that the vast majority of new artists that release new music don’t break out.

So based on that, what we originally said at NMS was, “What are the tools? Let’s explore ReverbNation and 50 other tools that artists use for free or cheap.” We did that, and found artists were not that excited about it – they were still coming to past New Music Seminars with their CD’s, looking for A&R people. So we reset the targets this year, with a renewed focus on the music industry.

Why is 2012 a particularly good time for the NMS to focus on Music Industry issues?

All the seeds planted 10 years ago are bearing fruit now. We’re closer to one-click; in America, 50% of phones are smart phones; apps drive music awareness; and all the technologies that exist are simplifying.

We’re learning what works and what doesn’t, and what drives behavior. How does Cricket do what they do with their mobile phones that makes it an enormous success? Usually the simpler things are – i.e. one click away – the better. The more clicks, the less people will make an effort.

We suffer from paradigm blindness. This is not the record business anymore – it’s an attention business. We’re aggregating attention and monetizing it. If we look at the industry that way, there’s an amazing opportunity.

Will Webster Hall become the land of opportunity later this month?

What are some of the opportunities inherent in the current scenario?

If we look at this sector we’re all involved in as a record business, well, there are only 200 million buyers. But there are 6 billion active cell phones in the world. If we can tap that market and activate that passive audience beyond being “lean back” – radio listeners who like music but don’t buy it – there’s an opportunity.

If there’s a way we can monetize half of them, we could get the music business to $100 billion a year. That’s five times what it is now — we can blow it up. That’s a discussion worth having. The NMS is about being optimistic.

From that standpoint, what are you hoping will result from NMS this year?

The attendees are invited to collaborate. We’re interested to know: who are the people who will emerge as the leaders of the music business? Who will be the next Steve Jobs? But it won’t start with the technology, it’ll be about how they see the business and the new ways that creators can monetize fans differently.

21 million people have bought the Adele album. That hasn’t happened in ten years. Nine million of them were in the US — when was the last time that happened in the US? The Backstreet Boys?

The business has shrunk by 70 percent in this period, but to see that happening now, you know there’s an untapped customer base. It means the business hasn’t shrunk — it means we’re missing the mark. People have said the music isn’t good enough, but I don’t think that’s it. A lot of dots haven’t been connected yet.

The NMS will start connecting those dots, and connecting people to each other. We can’t cover everything, but we’re trying to cover everything that’s progressive and new, and give voice to people with vision and ideas. If we can share those ideas, eventually we can manifest the reality of that $100 billion dollar business.

We’re at a new frontier here. Will all the things being tried kill the music business, or save it? No one knows, but it’s an exciting time. I’ve never been so excited about the music business as I am now, with all the opportunities to monetize music, expand it, consume it. All of that will help drive music to new heights.

In the bigger picture, what defines “success” in today’s music industry, in your opinion?

It really depends who’s the definer. In the first few seminars one of the big conversations we had was about defining success. If it’s a gold record or a GRAMMY, there won’t be many successes.

Corey Smith may not seem pleased in this photo, but Tom Silverman isn't fooled.

But if success is being your own boss and supporting yourself with music, then there’s room for millions of artist who can support themselves — and do it on their own terms. (DIY country artist) Corey Smith decides to take the weekend off fishing with his kids, because he can. The guy was a schoolteacher, but now he’s making millions doing it on his own. He gives his music away online, but he makes his money by touring.

We torture ourselves by creating unattainable success. To me, success is happiness. I’ve seen how some of the richest people can also be the most miserable. Money doesn’t define success. Have a long, healthy, happy life with great relationships — I don’t know what’s more successful than that. If you get to do what you love to do every day, that’s a success.

Lastly, you’ve related the music business to a venture capital (VC) business. Can you elaborate on that?

The music business is a venture capital business, but without the returns venture capitalists expect to get. When you have an industry with as high a risk as the music business, investors deserve a return commensurate with their risk. It’s been a long time since they’ve been able to get that.

The result is that it’s driven all of the investor money out of the music business, so there’s very little artist development. Ten years ago, VC’s – or their equivalent – were investing five to ten times more. Now artists aren’t breaking through, because less people are investing in them.

So how do we get people to invest more money, and build careers? The only way to do that is change the business model, and change it so it rewards success to the investor at a level that’s more competitive with other industries. It doesn’t work that way right now, but if at the NMS we look at how to monetize the business, it will drive things so that they’re profitable — to the point that the artist will do well, and the investor will do well also.

Artists have to understand that labels are very necessary to invest in them. These are the VC’s of the music business, but the VC well has dried up. We need to dig a deeper well and draw more water out of it, because there are a lot of artists out there.

— David Weiss

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