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Going Digital:
Atoms and Bits or Bits Without Atoms

Copyright July 2008 by Keith Holzman,
Keith Holzman
Solutions Unlimited.
All rights reserved.

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The "digerati" among you will note the above reference to Nicholas Negroponte's thesis in his provocative 1996 book, "Being Digital." Negroponte refers to bits as the binary ones and zeros of computers, and by extension, all the software, websites, and most meaningful to us, the digital information stored on the web, and various downloadable music files. Atoms, on the other hand, are the tangible items one can actually hold, such as books, CDs and LPs.

For most of us it's not a question of bits or atoms, but bits with or without atoms?

Just about every artist and label is releasing music in some digital form these days. That's a no-brainer, and I see no reason not to release any new project digitally -- as bits. There's lots of upside and no discernable downside.

But many clients are asking themselves if they also need to release in one of the traditional physical formats such as CD or LP -- in other words, as atoms.

Such a decision has to be based on the many disparate aspects of a business and will be different in each instance. It all depends on an artist's or label's circumstances.

Why wouldn't one want to release a CD? Well first there are all the costs -- designing the packaging, plus the printing of tray cards, booklets or folders or other special packaging such as Digipaks, the pressing of CDs, the assembling of all the materials, and finally the expense of shrink-wrapping. It also means the necessity of keeping track of inventories and accounts receivable.

Next there's the matter of attracting the attention of a distributor willing and able to get a reasonable quantity of CDs into the marketplace. Most established distributors -- even those that specialize in indie labels -- won't take on a new account unless they can be guaranteed about a million dollars worth of business. That's a lot of money and an unlikely circumstance, particularly to a new and unestablished artist or label.

So if you're an unknown or a start-up, you may have to consider going it alone. And that's not an easy task. It means that that you'll have to make deals directly with retailers willing to stock your music, plus you'll also be on the hook for the costs of manufacturing and shipping, not to mention returns.

Yet I've known of artists and labels who've started out on their own in a small way, but with lots of drive, stamina, and stick-to-itiveness, found themselves eventually succeeding. A substantial part of such a winning formula is that you be extremely proactive.

This means that if you're a musician serious about your music and your career, or if you're committed to the eventual success of your label, you must see that your artists are constantly performing in front of audiences, thereby building fans and a constituency. Such artists are also not ashamed to sell CDs, T-shirts, and other related paraphernalia at all their performances, and it can become a substantial part of their income.

You've also got to make lots of sales calls to accounts. In addition -- and this applies also to those who only release digitally -- you'll have to work all possible avenues of publicity -- be it local newspapers, fanzines, or national magazines and syndicated news programs. You must also try to get your music played on as many appropriate radio stations as possible. Then there's the matter of trying to get your music used on televisions shows, feature films, and even commercials. This may be the hardest task of all, but it can mean the quickest way of getting your music known, and paid for!

And don't neglect your website which is a great way to sell digital downloads, CDs, and other merchandise.

It's my opinion that releasing physical product -- a CD -- legitimizes a release and means you're serious about your music. It makes it "official" and shows you're committed. But, just as important, it will also sound better than any compressed form of download such as an MP3.

And what was that about the old-fashioned LP mentioned earlier? According to an article in the July 3rd issue of Digital Music News, sales of vinyl (LPs) surged 77 percent in the first half of this year to over 800,000 units. That's not exactly "chopped liver" where I come from. LPs are of particular value to audiophiles, so if your music warrants the additional processes and costs, it might be worth considering. But I suggest you wait to make such a decision until your music starts to sufficiently catch hold that there seems to be a market developing for it.

Therefore I recommend, in most circumstances, both bits and atoms.

Until next month,
Keith Holzman -- Solutions Unlimited
Helping Record Labels Manage for Success.

Copyright 2008 by Keith Holzman, Solutions Unlimited. All rights reserved. Adapted from "Manage for Success," Newsletter #87, July 2008. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Keith Holzman is the principal of Solutions Unlimited, a management consultant specializing in the recording industry. A trusted advisor and troubleshooter, he is a seasoned music business senior executive with extensive experience in all aspects of running a label. He was President of ROM Records, Managing Director of Discovery Records, Senior Vice President of Elektra, and Director of Nonesuch Records. He publishes "Manage for Success," a free monthly email newsletter devoted to solving problems of the record industry. You can subscribe at his website <
http://www.holzmansolutions.com>. Keith is a member of the Institute of Management Consultants and has served as a panelist for the National Endowment for the Arts, and as a board member of many arts organizations. He can be reached at mailto:keith@holzmansolutions.com. Keith is also the author of the recently published "The Complete Guide to Starting a Record Company" available both as a 235-page, printed spiral-bound book, as well as a downloadable E-Book.

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