“I started my career in the late eighties, where the template was: sign on with a record label. That’s you’re ticket to admission.  You have to have distribution, they have it tied up – promotion, all the team in place. And then just try to work as hard as you can, and over time, what I was hearing when we were first getting signed was, by your third or fourth album if you get your audience, that’s what we’re aiming for, and we look at you as a Prince type character, with a career like The Cure, or Depeche Mode or bands that’ve been around for a long time and that will continue to be around. Ok, all right, I’m ready. I’m in for the long haul; I’m ready to do this.

Then you start to learn as you see contracts. Wow, whoever went along with this contract originally, it’s not a very fair contract. Let’s see, you as a record label lend me some money to make a record, and then I have to pay you back all that money. And after I pay it back, you own it forever. Wow. And then I get to make this little sliver on top of that, if I’ve recouped (expenses). But you get to control how much I spend on marketing and other things I have to pay you back for. So, wait a minute. I could sell this many records and still never recoup? And you do all the accounting?  And then when you don’t pay me, ever, then I have to spend twenty-five grand to audit you, for you to then tell me “Oh, yeah, we do owe you this much.” That kinda sucks. And then [there’s] the mysterious, purposefully convoluted and tangled world of publishing, and how confusing that is. And a lot of musicians, myself included, that just wanted to work on music, and hoped someone had figured that out.
And you realize – some of the unfair business practices and precedence that’s been established.   And I’m not saying that no one should benefit from songs I write, or that I do all the work and I should make all the money. But I should make SOME money, and I should be able to clearly see where that money is coming from, if I did all the work, essentially. I wrote the song, I came up with the idea.

But then when you see the industry start to collapse, which means you’re kinda happy to see some of it collapse, but then you’re sad because also my livelihood is in danger, and I think how am I going to support myself and a family in an industry where we’re essentially making typewriters, you know? Nobody wants typewriters anymore. Everybody will read, and everyone still writes, but they don’t use these clunky machines…

I think the promise, and what I would hope more than anything, is that when we get to this new business model, whatever that is, on the record label side and also on the publishing side, [is] that somebody is strongly speaking up for artists’ rights when that starts to get figured out. And that in an age of potential transparency, that the actual content creator has a seat at the table…

What I consider, from a consumer point of view, the next good business model, the next thing that makes sense, is if there were mass adoption of music subscription services, like Spotify. I think in an age of broadband connection being everywhere, everyone having powerful computers in their pockets, this sense of feeling-  normal people feeling comfortable with the idea of the cloud, and their data’s somewhere but it’s is secure, it’s somewhere, and they have access to it, having all the music available in the world available to you at your fingertips, anywhere you want it all the time, that’s pretty cool.  That requires some education on the part of those companies, to help people to understand what that is. But is it fair to the artist? Not really. Look at the checks you’re getting paid from those services. It’s not an inspiring amount, and it certainly doesn’t replace lost revenue.

In my case several year ago, sitting around realizing “Hey, that kind of hazy dream I had, of sitting around getting checks for record royalties for the rest of my life? From work I did years ago?” You know, Eagles style, “Hey, Hotel California, another billion dollar check shows up.” It’s not gonna happen. Being able to make a sizeable amount of money from selling a record. It’s not gonna happen anymore. That’s a bitter pill to swallow. Music is free. I don’t think it should be free, but music is free. I can right now search in Google for any music that there is, and find it free. And so can anyone else with above-rudimentary searching ability. That’s a fact. That’s what you’re competing with.”

- Trent Reznor, Nine Inch Nails

More on Trent Reznors proven solution to these issues in the music business:
The new music business model: Connect With Fans!

“OK. The record business is broken. The model is broken.” I’d go through periods of having to look in the mirror and say, “Let’s see. I just made an album I spent a year working on. I turned it over to the record label to get manufactured. It leaked, and I’m online, just boiling furious, at fans who’re talking about how much they love this new album, that they just stole.”
And then I’d think, “Wait a minute. They’re not standing outside my house, bootlegging copies out the back of their van, y’know, to make money. They’re sharing their excitement about songs I’ve written, and music I’ve done. And they’re excited about it. And I’m pissed off at ‘em, because what? They didn’t wait until a month from now, when they’d have to drive to a record shop (if they can find one,) to buy a piece of plastic they don’t want, then rip it back to their computers, to…man, this sucks. Ok, something’s not right.” Or they can buy it from iTunes at a lower bit quality, which at that time was also copy protected, which I was originally strongly against.

It becomes very clear, if you can remove the emotion from the equation, that, OK. The delivery system is broken. And the relationship between fans and artists and record labels is also broken. I thought I was smart enough to get that right. What I learned is it consumed… The following years coming up to the present, have been spent trying to experiment with different business models.

First and foremost, spending time paying attention to what consumers want. You know, it all sounds like market research and boring marketing-type crap, and it is, but it also became clear: nobody else has figured it out. And managers aren’t gonna tell us what to do, and record labels, it’s clear they don’t know what to do. And the internet at large, their proposition that everything should just be free? That’s great if you’re a kid at home, it’s not so great if you’re a content provider that’s thinking “OK, how am I supposed to keep doing this if everything is just free?” That’s not right, in my opinion.

…rethinking how one makes money. If I’m gonna go on tour, and here’s a concert ticket, I’m hoping you come see, you know what? I’’’ throw the record in with that, it’ll all come into the same pot. Rethinking different ways to get your message out to people, and also trying to be consumer friendly. What do people want? They want stuff that’s not copy protected. OK. They want to be able to share it with their friends? OK. They’d like higher quality digital files? OK. They’d like to feel like they’re getting some sort of value for their money? I understand that. OK.”

Read the full source of this quote here.

In the new music business, your audience and fans are your most important asset. Take it from Trent Reznor, Getting peoples attention, and then keeping that attention, and connecting with those fans is one of the most important thing you can do for your music career.

So how many people on your mailing list are ‘active’? By active we mean how many would actually reply to an email you send out about a show or new song? Those are your active fans.
People on our mailing list these days don’t “unsubscribe” like they used to when they don’t want your emails anymore. Eventually, they change their email addresses without telling you and your emails will get rejected and you may never be in touch with them again.

Industry leader and consultant Tim Sweeney recommends you “test your list”, also called verifying, or ‘opting in’ your email list subscribers. Here’s how you can do it. Write a new email about an upcoming show or something important and ask them to let you know if they can come or not. Start making a new list of the people who responded and call it your “active list” of fans. Include in this list the people who come to your shows and have bought CDs from you!
Or, use mailing list software such as reverbnation‘s free fan reach, and ask everyone in your list to verify their email and subscription to your email list by responding to confirm their address. Our guess is over half won’t respond!

Tim suggests continuing to send general email announcements to the people on your list if you want to, but send a separate more personal email to the people on your new “active list.”

To jumpstart your career or to move it to a new level, you need to know who you can count on. It’s time to build a new fan base of people who want to support you versus being disappointed by the lack of response to hundreds of emails.

It’s not about how many fans you have or ‘friends’ on your social networking profile, it’s about how many of those people are ‘true fans’ who will support your music, help promote you, and puchase all your products. Those are the kind of fans that today’s artists need to have a music career.