This week the 53rd annual convention of the National Association of Recording Merchandisers is rolling out panels, exhibits and performances in Century City. For anyone who’s trying to make money off music, the NARM convention is the place to be.
Meet Paavo Backman, an up-and-comer in the music business from Helsinki, Finland. He’s not a musician, a manager, or a label executive promoting a hot new record. "If I want to post something I click here – and decide if it goes to Twitter and Facebook as well, and send."
He’s pushing apps – for smartphones and tablets. His company, Mobile Backstage, custom-builds and brands them for individual bands.
"And if you are [the] artist, you can reach your fans globally in three seconds from here, now, and take video clips and 'I’m here in NARM' and after that, around the world, your fans get this 'beep, beep,' this message sound. And they really want to use this all the time because they feel they’re one part of [a] special group. It’s a key point."
Making your fans feel special – everyone at the NARM convention, it seems, wants to drive home that point.
Rich Bengloff runs the American Association of Independent Music. Throughout this convention, his group’s offered crash courses on the way the music industry works. He says music consumers’ focus has shifted – from owning music to having it available, anywhere they happen to be.
"The key word now is access," says Bengloff. "Everyone has access, which is a good thing, but it’s also a bad thing. So to be able to stand out, you have to go direct to fans and be able to cultivate your fans. That is the way you will be successful in the music business because they become your viral street team at that point."
That’s when a musician or band can make money from more than recordings, Bengloff says – think merchandise, licensing, even stuff that doesn’t exist in the real world.
"There’s people going online. They create their own avatar of themselves," says Bengloff. "They buy a virtual T-shirt, they go to a virtual concert, they buy a virtual beer. It’s actually becoming a big business."
Bengloff applauds the National Association of Recording Merchandisers for changing along with the industry. NARM president Jim Donio says it’s had to. His first convention was the last in Los Angeles before this one – 21 years ago, when Columbia Records introduced an unknown female vocalist named Mariah Carey.
Since then, when record companies ruled, the music industry has taken a beating from piracy, changing technology and falling sales. This year, Donio says, he’s finally seeing sales tick upward again.
His take: the business is down but not out. "Clearly the issue still is about people spending money on music," says Donio, "and we haven’t figured out all of the new opportunities there and monetizing every single aspect of the business, but we’re working on it."
The trade group used to focus on the needs of music retailers and wholesalers. Now, NARM president Jim Donio says different kinds of companies send people to the convention in different years. This time around, it’s all about social media.
"Social media is a huge huge part of this business," says Donio. "So you have to figure out how to harness the power of that. How do you measure it? How do you apply it? Companies like Topspin are looking at all different ways of marketing in the business."
And companies like Paavo Backman’s Mobile Backstage are reaching that market through apps. The company’s app for the metal band Black Label Society has been very popular; Backman says band members use it to send 20 fan messages a day.
"They are old rockers, and still they understand: if you have good tools, it’s easy to hook your fans, and they love it!"
No matter the variety of music, or how good it is, Backman says that if it’s gonna make money, it’s gotta hook the fans.