You are on page 1of 5

Uncertainty rocking both the broadcast radio and record industries has opened an

enormous opportunity for recording artists and record labels. Growth for the music
industry will come from expanding the overall online radio audience and ad pie at the
expense of broadcast radio. When important trends are viewed through the lens of the
music/radio consumer, the future of recorded music monetization is revealed.
~Paul Goldstein, recode.net
Introduction:
Boston has long been considered the birthplace of America. It was here that many of the
founding fathers planned and executed their ideas about a new America. Here again is
where a new America can be created. This is not a reference to another revolution against
the government, but rather a revolution against the current music industry model. For
years, labels have taken advantage of small artists in an effort to make as much money off
of them as possible while growing their name. Could there be a new way to go about
this business though? What would happen if there were a record label that worked
directly with the artist to help them make a start, and then continue to work with them to
sign with a larger, more well known label? Call it the Stepping Stone Initiative. The
perfect place for this revolution to happen is no other city than Boston. The Stepping
Stone Initiative could revolutionize the way the recording business is done.
Breakdown of Current Artists:
Youre driving down the highway on a road trip and turn on the radio in your car. Who
are you most likely to hear? Even if you dont know any names of the artists, it would be
a fairly safe bet to say that the average age of the artists youd hear range from 20-30.
There are obviously exceptions to this, but it goes to show that there is a wealth of talent
in the youth of today. Listed below are the ages of several select Top 40 artists:
-

Ariana Grande ~ 21 years old


Meghan Trainor ~ 21 years old
Sam Smith ~ 22 years old
Ed Sheeran ~ 23 years old
Taylor Swift ~ 25 years old
Jessie J ~ 26 years old

These are six of the most globally popular artists in the world today. As can be seen, they
are all extremely young, some of them being the same age as many college students. Are

they generally considered exceptions when compared to most aspiring musicians? Most
people would argue yes. But I think that they represent a talent pool that is much larger
than people think. For every major pop star who rose to fame, there are thousands, if not
millions, of undiscovered artists around the same age wanting to make it big. This
provides for an enormous potential market of eager young artists who are ready to record.
Why Boston?
Boston is the perfect city for the Stepping Stone Initiative. Why? Colleges and
universities. Boston is commonly referred to as the college capital of America. According
to studyboston.com, there are more than 80 colleges in the region, ranging from art
schools to music conservatories to womens colleges to institutes of technology to
internship-centered curriculums to liberal arts colleges large and small. Eighty colleges
may not seem like a huge number, but this equates to over a quarter of a million students!
Combine that absurdly large number of students with a city full of artistic talent of all
sorts, there is bound to be some talent that has what it takes to make it into the big
leagues. Studyboston.com goes on to give three big names in the music industry that
started from Boston. These names are Aerosmith, the Dropkick Murphys, and John
Mayer. The only reason that seems logical as to why Bostons music production scene
hasnt grown to rival other cities is because of the proximity to New York City. However,
remember the possible market here; were talking about the average college student.
Most students dont have enough money to afford New York City. Place living costs on
top of the cost of studio time and you have debt piled up to absurd levels. This is where
the Stepping Stone Initiative would come into play. The mission would be to work with
the artist to create a demo that could be used as a platform to kick-start their career.

Opportunity in the Recording Industry:


No matter what the popular means of acquiring music is, whether it be physical or digital,
there will always be a need for studios and audio engineers. After all, music has to be
recorded in order to be distributed at a large scale. However, since there is a major shift
from physical to digital that has been happening over the past decade, especially in the

area of streaming, there lies a major opportunity for labels to generate income. According
to ifpi.com, Revenue from digital channels increased by 4.3 per cent in 2013 and now
accounts for 39 per cent of overall industry trade revenues. Internet distribution has
become the new face of the music industry. Streaming services especially have started to
take over as the dominant form of music distribution. Ifpi.com also states that,
Revenues from subscription services surged by 51.3 per cent in 2013, passing the
US $1 billion mark for the first time. Global revenues from subscription and
advertising-supported streams now account for 27 per cent of digital revenues, up
from 14 per cent in 2011. It is estimated that more than 28 million people
worldwide now pay for a music subscription, up from 20 million in 2012 and just
eight million in 2010.
What labels have yet to realize is that there is a way to better make income from the
world of streaming. Record labels have all this music piled up, but they have other
companies or individuals play it for them to reach consumers. Why wouldnt they cut out
the middleman? A label has ample opportunity, especially with the popularity of internet
streaming, to become their own radio station. Record labels could save ample amounts of
money by simply airing their own content through a service similar to Pandora or Rdio.
This is a perfect fit for the Stepping Stone Initiative.
What is the Stepping Stone Initiative?
The Stepping Stone Initiative would be a new kind of record label. Instead of shooting to
be a major label, the Stepping Stone Initiative would aim to be just what the name
suggests, a stepping stone for undiscovered artists. The company would dive into the
talent pool that Bostonian students posses. By reworking the studio model to better suit
the affordability of college students, Stepping Stone would then work with those students
to record some sort of demo or EP that they could use to get their name out in the
business. After the recording and production aspect is finished, the Stepping Stone would
continue to work with the artist for a period of time (one or two years) to help them
network and connect with a larger label. The obvious question with this style of business

is how would the Stepping Stone make profit? There are several ways in which Stepping
Stone would bring in revenue. For starters, when an artist signs with Stepping Stone, they
would obviously have to pay a small fee for the services provided. Second, while the
artist is under contract at Stepping Stone, any music they distribute through the company
would make profit that primarily goes to them, the artist. However, there would be
royalties attached in their contract to help offset the cost of producing and promoting
them. Also while with the company, the artist would have access to Stepping Stones own
online streaming service. According to Paul Goldstein, audience development executive
for recode.net, Ad-supported and subscription streaming services have tripled revenue
paid to artists and labels, growing from seven percent to 21 percent of digital revenues in
the last four years, according to the RIAA. Labels should take advantage of this.
Streaming would not only help the artist gain popularity, but would also provide the label
with an opportunity to sell subscriptions to the streaming service. Over this medium,
consumers would be able to hear exclusive content from artists working with the
Stepping Stone, and those artists only. Finally, say the networking associates are able to
help secure the artist a deal with a larger label. Instead of the artist having to wait out
their contract, the larger company would be able to buy the artists contract, terminating it
immediately with Stepping Stone. The whole point of Stepping Stone is to give the artist
a platform to take them from undiscovered talent to globally known musical talent, not to
do it all in one step.
Summary:
With the amount of college students located in and around Boston, there comes a major
opportunity for a new kind of record label to emerge and change the current business
model for recording studios. Instead of shooting to compete with big name labels like
Warner or SONY, there instead is an opportunity for a type of label to emerge as a sort of
stepping stone between the undiscovered street performer and the major labels. By
searching for fresh, young talent at local college events and performance hotspots, a label
could find themselves immersed in a vast pool of talent waiting to be found. If a label
could record, produce, and publicize an artist through means of a self-owned streaming
service similar to Pandora or Rdio, there is a large opportunity for profit.

Works Cited
- Goldstein, Paul. "The Future of the Music Industry: Selling Audiences to Advertisers."
Recode. N.p., 24 Apr. 2014. Web. 03 Feb. 2015.
<http://recode.net/2014/04/24/the-future-of-the-music-industry-selling-audiencesto-advertisers/>.
- "IFPI Publishes Recording Industry in Numbers - an Essential Guide to Global
Markets." IFPI Publishes Recording Industry in Numbers. N.p., 1 Apr. 2014. Web. 03
Feb. 2015.
<http://www.ifpi.org/news/IFPI-publishes-Recording-Industry-in-Numbers2014>.
- "250,000 College Students in Boston: Americas College Town." StudyBoston.com.
N.p., n.d. Web. 3 Feb. 2015.
<http%3A%2F%2Fwww.studyboston.com%2Fabout-boston%2Fliving-andstudying-in-boston.html>.