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Why  the  Traditional  A&R  Process  is  Failing  the  Industry  &  Musicians  Alike  …and  how  to  fix  it  

 A  position  paper  for  music  labels,  music  publishers,  music  supervisors,  managers,  radio  program  

directors,  producers,  music  bloggers,  advertisers,  and  all  musicians    

By  Mike  McCready  

 New  York,  October  2011    

It  isn’t  news  that  the  past  decade  has  brought  tumultuous  change  to  the  music  industry.  Advances  have  primarily  impacted  the  way  music  is  accessed,  distributed  and  paid  for.  But,  few  companies  in  our  sector  have  harnessed  technology  to  its  full  extent  to  optimize  their  business  processes.  While  most  music  companies  have  incorporated  data  mining  and  social  trending  statistics  into  their  discovery  processes,  the  fundamental  way  the  industry  sources  new  songs  and  talent  has  remained  unchanged.  Isn’t  it  time  we  re-­‐think  how  we  conduct  A&R?    We  think  of  A&R  as  the  process  by  which  we  find  and  

help  create  great  musical  products.  In  reality,  A&R’s  primary  business  function  is  to  reduce  risk  by  identifying  or  creating  highly  compelling  product  and  managing  promotion  efforts  to  reduce  the  likelihood  of  failure  in  the  marketplace.  So,  in  terms  of  risk  reduction,  traditional  A&R  was  only  adequate  when  the  business  climate  afforded  companies  the  luxury  of  having  occasional  successes  compensate  for  far  more  frequent  flops.1  In  today’s  new  music  business,  narrower  margins,  smaller  budgets  and  fragmented  audiences  require  a  more  efficient  approach  than  primary  reliance  on  golden  ears  and  talented  gut  instincts.  Additional  and  supplemental  tools  are  needed  to  create  success  more  often  than  failure,  or  at  the  very  least,  improve  success  rates  to  a  more  manageable  level.    By  devising  a  comprehensive  21st  century  A&R  platform  which  combines  and  harnesses  all  the  advances  in  technology,  data  mining,  and  our  global  interconnectivity,  natural  talent  identification  abilities  can  be  enhanced,  strengthened  and  amplified.  This  will  increase  efficiency,  hone  accuracy,  offset  costs  and  reduce  risk.                                                                                                                  1  According  to  NPR,  which  polled  a  number  of  industry  experts  to  determine  the  real  cost  behind  a  top-­‐charting  hit.  In  this  case,  it  was  Rihanna's  recently-­‐created  "Man  Down,"  a  big-­‐budget,  blockbuster-­‐style  blowout  that  remains  unproven.  The  breakdown:  Writing  Camp  (Per  Song):  $18,000  ·∙  Songwriter:  $15,000  ·∙  Producer:  

Mike  McCready  -­‐  Co-­‐founder  &  CEO  Music  Xray  

 

 

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 Independently  of  how  music  is  ultimately  consumed  and  its  creators  compensated;  among  the  many  other  changes  our  industry  is  adopting,  in  order  to  thrive  again,  we  must  develop  a  better  way  to  conduct  A&R  and  more  efficiently  pair  musicians  with  the  right  business  teams  in  a  way  that  increases  the  likelihood  of  success  and  reduces  the  cost  of  failure  when  it  occurs.    The  challenges  faced  by  A&R  professionals    Under  the  traditional  system,  many  A&R  professionals  limit  their  intake  of  new  music  to  trusted  contacts  and  their  referrals.  Even  so,  they  must  listen  to  large  amounts  of  music  that  most  of  the  time  isn’t  of  interest.  They  have  to  keep  track  of  who  submitted  what,  deal  with  overflowing  and  sluggish  email  accounts  and/or  stacks  of  CDs.  Often,  they  are  relentlessly  pursued,  hounded,  called,  emailed,  ambushed  and  otherwise  hunted-­‐down  by  almost  everyone  from  whom  they’ve  received  music  for  their  consideration.  These  and  other  issues  involving  legal  concerns2  are  precisely  what  led  so  many  companies  to  actually  close  their  doors  to  music  submissions  from  people  with  whom  they  don’t  already  have  working  relationships.  These  inefficiencies  and  policies  of  not  accepting  unsolicited  material  have  shut  out  countless  independent  musicians,  deprived  the  industry  and  audiences  of  some  very  worthwhile  music,  and  created  a  community  that  operates,  to  a  large  degree,  based  on  who  you  know.    Talent  gets  through  but  only  after  an  inefficient,  inconsistent  and  archaic  filtering  process  that  leaves  behind  worthy  talent  and  often  lets  through  over-­‐rated  product  that  has  short  life  spans  and  damages  the  industry’s  credibility  in  the  long  term,  much  like  what  happened  to  the  American  auto  industry  in  which  reduced-­‐quality  combined  with  high  prices  over  time  eventually  created  negative  customer  sentiment.    Inefficient  A&R  process:    Additionally,  in  the  quest  to  find  acts  with  the  highest  potential,  A&R  professionals  spend  valuable  time  trolling  the  Internet,  jumping  from  site  to  site  trying  to  be  the  first  to  spot  the  next  big  thing.  The  Shazam  charts,  blogs,  Hype  Machine  charts,  BDS,  YouTube,  and  Mediabase    are  all  consulted  by  A&R  professionals.  Some  of  these  sites  are  designed  for  tracking  the  impact  of  promotion  campaigns  and  weren’t  even  built  to  be  used  as  A&R  discovery  tools.  The  data  they  provide  is  useful  but  not  usually  

                                                                                                               2  Mostly,  legal  concerns  involving  lawsuits  alleging  copyright  infringement.  This  topic  is  addressed  later  in  this  document.  

 

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aggregated  in  one  place.  Many  of  them  only  provide  insights  regarding  performing  acts,  ignoring  millions  of  emerging  songwriters  and  acts  from  rural  areas  which  don’t  have  access  to  wide  audiences  despite  their  quality.      Most  importantly,  almost  all  of  them  provide  trailing-­‐indicator  data  –  meaning  they  track  trends  that  have  already  occurred  and  therefore  spot  songs  and  acts  that  already  have  traction.  There’s  less  business-­‐gain  to  be  realized  when  getting  into  the  game  once  an  act  is  empirically  demonstrating  signs  of  viability.  Backing  the  act  at  that  point  is  mostly  a  matter  of  money.  By  that  time,  the  act  has  become  the  gatekeeper  –  able  to  choose  the  business  team  with  which  to  surround  itself.  This  kind  of  strategy  gets  the  business  teams  into  the  game  at  a  later  stage,  fosters  competition  among  business  teams  and  sometimes  even  bidding  wars,  driving  up  costs  for  all.  Even  worse,  this  process  does  not  leverage  business’s  greatest  strength;  becoming  a  catalyst  for  the  acts  and  playing  a  significant  role  in  creating  the  difference  between  success  and  obscurity.  Frankly,  that  strategy  is  more  about  opportunism  and  speculation  than  it  is  about  being  a  good  corporate  citizen  in  our  industry.  Don’t  get  me  wrong.  As  with  any  business  opportunity,  getting  in  early  while  taking  measures  to  control  risk  enables  professionals  to  rightfully  harvest  significantly  higher  returns.  And  that’s  the  key;  having  the  tools  that  enable  you  to  get  in  early  with  decreased  risk.    By  focusing  on  trailing-­‐indicator  data,  talent  investors  run  unfocused,  expensive  and  hit  &  miss  businesses.  Most  A&R  professionals  use  these  types  of  tools  but  it’s  only  because  they  are  the  best  tools  available  –  not  because  they  are  deemed  to  be  so  effective.3    The  challenges  faced  by  musicians    

On  the  other  side  of  the  coin,  for  musicians  and  their  managers  who  do  not  have  pre-­‐established  relationships  with  the  gatekeepers,  it  has  always  been  a  frustrating  challenge  to  have  their  music  considered  for  deals.  It’s  messy,  resource-­‐sucking  and  often  unpleasant  for  them  to  spend  massive  amounts  of  time,  effort,  and  money  finding  available  deals  and  opportunities,  pursuing  them,  following  up,  calling  in  favors,  networking  and  building  relationships  just  to  get  a  song  heard  with  only  a  sliver  of  a  chance  of  actually  securing  a  deal.    The  digital  age  has  only  exacerbated  these  challenges.  The  cost  

of  recording  has  fallen  due  to  advances  in  technology  and  its  ubiquity.  Aspiring  musicians  have  multiplied  into  the  millions  –  many  of  whom  create  fantastic  music  but  lack  the  business  skills  and  contacts  necessary  to  ever  reach  industry  ears.  This  has  

                                                                                                               3  This  data  was  collected  by  the  author  after  consulting  A&R  professionals  at  EMI,  Sony  Music  Entertainment,  Warner  Music  Group  and  several  large  independents  labels.  

 

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created  an  unprecedented  bottleneck  of  artists  wanting  to  have  their  music  considered  for  commercial  and  exposure  opportunities:  the  kinds  that  require  an  A&R  professional  to  evaluate  the  music  and  make  decisions.  The  result  is  millions  of  musicians  feeling  shut  out  and  jaded.      Why  have  there  been  no  good  solutions?    As  recorded  music  sales  have  plummeted  over  the  past  decade,  the  immediate  need  has  been  to  stop  the  bleeding.  If  the  bleeding  were  stopped,  the  inefficient  A&R  process  was  no  more  of  a  problem  than  it  had  been  in  the  past.  The  few  successes  paid  for  the  flops  in  a  way  that,  while  not  ideal,  worked.    Additionally,  there  is  almost  no  outside  pressure  in  our  industry  to  explore  alternatives  to  what  have  always  been  considered  best-­‐practices.  When  poor  business  decisions  are  made,  livelihoods  and  careers  fail.  By  contrast,  take  the  medical  profession  as  an  example.  When  best  practices  aren’t  continuously  researched,  studied  and  adopted,  lives  are  lost  and  the  general  welfare  is  affected.    In  the  music  business,  bad  practices  do  not  transcend  the  impact  on  the  reputations  of  those  executives  involved  in  the  bad  decisions.  Thus,  we  observe  the  impact  of  poor  business  execution  only  in  the  revolving  doors  at  the  music  companies.  What’s  more,  there  has  traditionally  been  more  glory  earned  by  executives  who  attribute  their  successes  to  instinct  and  craft.  Not  unlike  the  mystique  surrounding  a  professional  athlete.  Many  industry  executives  like  to  keep  quiet  about  the  “secrets  of  their  success”  and  the  tools  they  use  to  obtain  it.  It  is,  after  all,  a  competitive  business.    It’s  not  that  new  methods  haven’t  been  tried.  But  rarely  have  they  been  fully  tested  and  implemented  across  the  board  so  that  their  impact  could  be  measured  over  time.  A  few  that  have;  such  as  call-­‐out  testing  and  focus-­‐group  research  are  no  longer  delivering  game-­‐changing  results.  It  is  with  the  use  of  those  type  of  tools  that  the  industry  continues  to  see  abysmal  success  rates.  More  and  better  tools  are  needed.    What  are  the  costs  of  inefficient  A&R?  

 The  industry  has  come  to  terms  with  the  idea  that  a  re-­‐examination  of  all  aspects  of  the  business  will  be  necessary  in  order  to  create  vibrant  and  robust  music  companies.  While  smaller  music  companies  never  could  engage  in  the  kind  of  promotion  spending  done  by  the  majors,  the  majors  also  realize  that  expensive,  failed  promotions  are  no  longer  affordable  because  the  successes  are  smaller  and  can’t  compensate  for  as  many  flops.  The  survival  of  the  strongest  players  in  the  industry  

 

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who  are  interested  in  continuing  to  break  new  acts  is  dependent  upon  reducing  the  risk  of  failure  while  at  the  same  time  insuring  that  failure,  when  it  does  occur,  costs  less.  Current  A&R  processes  are  costing  companies  millions  of  dollars  and  in  some  cases  make  music  companies  completely  unviable.    Do  labels  and  the  A&R  process  become  obsolete  when  artists  pursue  ever-­‐improving  DIY  strategies?  Can  artists  achieve  wide  success  on  their  own?    The  short  answer  is  no.    As  long  as  there  are  commercial  and  exposure  opportunities  for  music  and  musicians,  there  will  be  human  gatekeepers  making  the  decisions  about  which  songs  and  acts  are  chosen  for  each  opportunity.  Those  decision  makers  will  increasingly  rely  on  data-­‐driven  tools  to  enhance  their  natural  talent  identification  skills  but  humans  will  make  the  decisions.    DIY  strategies  can  help  some  artists  get  off  the  ground  without  having  to  go  through  a  gatekeeper.    Some  will  be  able  to  attract  and  retain  a  core  audience  that  may  provide  them  with  a  meager  living  (and  a  very  few  may  do  a  bit  better  but  those  will  be  the  exceptions).    Labels  are  already  redefining  how  they  operate.  Some  have  changed  their  model  so  much  that  maybe  they  should  not  even  call  themselves  labels.  Two  forward  thinking  organizations  of  this  type  that  come  to  mind  are  Jay  Frank’s  new  DigSin  singles-­‐only  label  and  Steven  Learner’s  and  Jim  Cooperman’s  Tiny  Ogre.  Both  are  examples  of  new  models  that  show  promise  in  the  new  music  business  landscape.  There  are  others  as  well.    The  “labels”  of  the  future  will  essentially  be  multi-­‐disciplinary  business  teams,  which  will  select  songs  and  acts  in  which  to  invest  their  efforts  and  resources.    These  teams  will  serve  as  catalysts  for  the  acts’  careers  and  will  make  the  difference  between  success  and  obscurity.  The  will  have  expertise  in  generating  multiple  types  of  revenue  streams  and  will  not  expect  to  earn  more  than  the  value  they  provide.  Artists  who  are  able  to  attract  these  teams  at  the  earliest  possible  stage  of  their  career  will  achieve  success  sooner  and  their  careers  will  last  longer.    The  process  by  which  these  teams  are  paired  with  acts  and  the  process  by  which  independent  songwriters’  tunes  are  chosen  for  acts,  will  be  the  new  21st  century  A&R  process.      

 

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What  does  the  21st  century  A&R  process  look  like  for  the  industry?    

A  21st  century  A&R  platform  for  the  industry  would  be  the  ultimate  song  filter,  talent  filter  and  early  stage  viability  detection  tool  for  industry  professionals.    There  are  millions  of  available  songs.  At  least  a  million  new  ones  are  created  and  uploaded  to  the  web  each  year.  Many  of  them  are  perhaps  unworthy  of  commercial  use  in  any  capacity.  4    However,  there  has  been  no  efficient  and  scalable  way  of  separating  the  worthy  tracks  from  the  

unworthy  in  a  way  that  is  viable  from  a  business’  perspective.  And  that  separation  of  the  wheat  from  the  chaff  is  only  the  beginning  of  what  must  be  done  on  an  on-­‐going  basis.  Once  worthy  songs  and  acts  are  identified,  there  needs  to  be  a  way  to  determine  which  worthy  songs  and  acts  are  appropriate  for  each  specific  commercial  opportunity.      

• An  ideal  21st  century  A&R  platform  would  be  so  good  and  such  a  leap  from  where  we  are  today  that  it  would  provide  competitive  advantages  to  those  professionals  and  companies  who  use  it  and  a  disadvantage  to  those  who  don’t.  It  would  be  that  good.    

• A  21st  century  A&R  platform  would  identify  songs  and  acts  with  early  evidence  of  viability  and  be  keenly  aware  that  evidence  of  viability  does  not  always  mean  an  act  or  song  already  has  traction  with  audiences.  A  21st  century  A&R  platform  would  be  focused  on  talent  identification  at  the  earliest  possible  stage.    

• A  21st  century  A&R  platform  would  minimize  the  amount  of  unworthy  songs  heard  by  any  individual  A&R  professional.  It  would  reduce  their  workload  by  increasing  efficiency.    

• A  21st  century  A&R  platform  would  call  attention  to/highlight  tracks  that  may  be  worthy  candidates  for  specific  opportunities  (a  particular  movie  scene  or  a  particular  performer).    

 

                                                                                                               4  I  recognize  that  one  may  argue  that  every  available  song  could  be  deemed  worthy  of  some  opportunities.  For  example,  someone  might  make  a  movie  about  a  really  bad  band  and  therefore  have  a  need  for  rough  demos  that  are  out  of  tune  and  otherwise  lacking  in  quality.  

 

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Digital  music  retail  has  brought  with  it  an  increasing  reliance  on  hit  singles  to  drive  business.  As  album  sales  have  fallen,  the  need  to  efficiently  and  cost-­‐effectively  mine  the  millions  of  available  tracks  for  the  hidden  gems  becomes  apparent.    

• A  21st  century  A&R  platform  would  provide  efficient  ways  to  process  vast  numbers  of  available  tracks  and  would  effectively  and  consistently  identify  high-­‐potential  songs  –  in  essence,  providing  a  steady  stream  of  potential  hit  singles.    

• A  21st  century  A&R  system  would  also  involve  a  simple  way  for  industry  professionals  to  manage  their  music  submissions,  keeping  track  of  who  submitted  which  songs  and  when.  It  would  include  a  method  for  managing  communication  with  submitters  to  keep  them  informed  of  the  status  of  their  submission.  It  would  minimize  follow-­‐up  conversations  and  the  need  to  engage  submitters  whose  music  has  been  rejected  for  a  specific  opportunity.  

 • A  21st  century  A&R  platform  would  aggregate  available  social  trending  data,  

provide  ample  information  on  each  submitting  artist  or  songwriter  as  well  as  a  song’s  meta  data,  images,  lyrics,  any  related  videos  and  would  not  require  the  industry  professionals  to  hunt  all  over  the  Web  to  find  information.  

 • A  21st  century  A&R  platform  would  enable  industry  professionals  to  obtain  

leading-­‐indicator  data  (as  opposed  to  trailing  indicator  data)  to  help  them  get  involved  at  the  earliest  possible  stage  with  high-­‐potential  songs  and  acts.  

 • A  21st  century  A&R  platform  would  enable  industry  professionals  to  obtain  

audience  reaction  data  that  could  be  used  to  test  songs  and  acts  against  various  demographics  in  order  to  test  assumptions  before  committing  their  companies  to  spending  large  amounts  of  promotion  resources.  

 • In  short,  a  21st  century  A&R  platform  should  increase  efficiency,  offset  costs  and  

reduce  risk.        What  does  the  21st  century  A&R  process  for  musicians  look  like?    A  21st  century  A&R  platform  for  musicians  will  be  the  ultimate  path  to  commercial  deals  and  exposure  opportunities.  It  should  be  as  close  to  “put  in  your  songs  and  have  them  find  their  way  to  appropriate  commercial  deals  and  exposure  opportunities”  as  possible.    There  will  always  likely  be  far  more  songs  and  musicians  /  

 

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artists  /  songwriters  than  great  commercial  and  exposure  opportunities  or  even  audiences  that  can  absorb  all  of  the  worthy  new  music.  Therefore,  there  will  likely  always  be  competition  for  deals  and  exposure.  However,  a  21st  century  A&R  platform  would  involve  improvements  to  the  process  of  being  considered  for  deals  and  exposure  opportunities.    

• A  21st  century  A&R  platform  would  provide  advantages  to  the  talented  and  skilled  and  would  make  the  business  less  about  who  a  musician  knows  and  to  whom  they  can  gain  access.  With  21st  century  A&R,  talent,  skill  and  market  appeal  would  rule  supreme.    

• A  21st  century  A&R  platform  would  be  relatively  frictionless  and  musicians  would  easily  see  the  advantages  of  using  it  and  the  disadvantages  of  not  using  it.  Those  slow  to  adopt  its  use  would  experience  competitive  disadvantages.    

• A  21st  century  A&R  platform  would  curtail  the  need  for  musicians  to  spend  valuable  time,  effort  and  money  hunting  for  and  pursuing  potential  opportunities.  It  would  save  musicians  time  and  money.  

 • An  effective  21st  century  A&R  platform  for  the  

industry  (as  described  above)  would  put  an  end  to  companies’  policies  of  not  accepting  unsolicited  material.  In  fact,  it  would  make  unsolicited  material  welcome  and  necessary  thereby  opening  a  direct  pathway  to  opportunity  for  independent  musicians  everywhere.  

 • A  21st  century  A&R  platform  would  insure  that  musicians  could  know  the  status  

of  their  submissions  without  the  time-­‐consuming  work  of  continuously  following  up.  

 • A  21st  century  A&R  platform  would  not  only  provide  notification  to  a  musician  if  

their  submission  were  rejected  but  would  also  provide  them  with  a  response  and  reason  as  to  why  a  particular  submission  was  rejected.  

 • A  21st  century  A&R  platform  would  enable  worthy  songs  and  acts  that  have  been  

rejected  several  times  yet  evaluated  positively  by  industry  professionals  to  have  the  attention  of  other  industry  professionals  instantly  drawn  to  them  with  no  further  action  by  the  submitter  required.  

 • A  21st  century  A&R  platform  would  provide  consistently  rejected  musicians  with  

professional  help  to  improve  their  submission  strategy  as  well  as  their  music  in  order  to  increase  their  chances  of  being  selected  in  the  future.  

 

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• A  21st  century  A&R  platform  would  provide  a  way  for  musicians  to  obtain  direct  fan  feedback  from  anonymous  music  lovers  who  could  give  insights  and  opinions.  

   Who  will  resist  such  solutions?  

 Almost  no  one.    However,  change  is  never  easy  and  always  encounters  some  resistance.  Nevertheless,  the  pain  in  the  ecosystem  is  currently  so  great  that  almost  everyone  is  receptive  to  a  better  way.  There  are  however,  certainly  a  few  companies,  industry  professionals  and  musicians  who  will  be  especially  resistant  to  change  of  any  kind.  Those  are  the  people  for  whom  the  current  system  is  working  and  who  would  be  threatened  by  change.  They  are  entrenched  in  and  have  a  stake  in  the  status  quo.  

   Conclusion:    

The  21st  century  A&R  platform  described  in  this  document  is  not  theory.  It  is  operational  and  already  working  in  practice.  In  fact,  nearly  1300  

music  industry  professionals  use  it  to  conduct  at  least  some  of  their  A&R  efforts.  These  include  professionals  at  Columbia  Records,  Epic,  Capitol  Records,  MTV,  dozens  of  independent  labels,  radio  stations,  top  producers,  publishers  and  music  supervisors.    Over  $2.5  million  has  been  invested  into  the  building  of  this  platform  and  new  and  advanced  features  continue  to  be  developed  and  introduced.    In  the  past  6  months  alone,  over  3500  songs  and  acts  have  been  selected  for  opportunities  on  Music  Xray  and  the  company  receives  praise  daily  from  both  industry  and  musician  users.    

 

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While  not  perfect,  Music  Xray  is  the  embodiment  of  the  21st  century  A&R  platform  described  herein.  It  creates  a  fair  and  open  system  for  musicians  and  is  by  far  the  most  comprehensive  set  of  A&R  tools  available  anywhere.    If  you  are  interested  in  learning  more  about  how  21st  century  A&R  is  changing  the  music  business  and  you  are  a  music  industry  professional,  I  urge  you  to  view  this  short  video  and  sign  yourself  up  to  the  free  service:  http://musicxray.com/mipvideo    If  you  are  a  musician,  I  encourage  you  to  visit  http://musicxray.com/video  and  then  sign  up  and  Music  Xray’s  song  to  opportunity  matching  system  will  match  your  songs  to  opportunities  for  free.    

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About  Mike  McCready