Monday, January 24, 2011

foreclosure list

A press release from LPS' Mortgage Monitor Report shows Foreclosure Inventory Rising for 5th Straight Month

The November Mortgage Monitor report released by Lender Processing Services, Inc. (LPS) shows that the volume of loans moving to REO continued to drop as moratoria further delayed foreclosure sales. While the 90+ delinquency category has steadily declined, the number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts. Nearly 2.2 million loans are 90 days or more delinquent but not yet in foreclosure.

Foreclosure inventories also continued to rise for the fifth straight month as delinquent accounts are referred for foreclosure, but the sale of foreclosure properties continued to decline. When compared to January 2008 levels, the foreclosure inventory of Jumbo Prime loans is nearly seven times higher; the inventory of Agency Prime loans is nearly six times higher; and the foreclosure inventory of Option ARM loans is approaching five times the inventory in January 2008.

The report also shows that one-third of loans that are 90 days or more delinquent have not made a payment in a year; however, the number of new problem loans declined nearly 5.4 percent from October, which is opposite of the seasonality trend that typically impacts new delinquencies this time of year. Self-cures for loans one to two months delinquent increased in November to a six-month high.

In the month of November, 261,153 loans were referred to foreclosure, which represents a 0.7% month-over-month decline. The total number of delinquent loans is nearly 2.1 times historical averages - and foreclosure inventory is currently at 7.7 times historical averages.

As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:

Total U.S. loan delinquency rate: 9.02 percent
Total U.S. foreclosure inventory rate: 4.08 percent
Total U.S. non-current* loan rate: 13.10 percent
States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, New Jersey
States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana

Charts From The Report

The report is 34 pages long. Inquiring minds may wish to give it a closer look. Here are a few select charts.

click on any chart for sharper image

Delinquent and Foreclosure Rates by Month

Total Delinquency Percent Excluding Foreclosures

Total Foreclosure Percent By Product

Foreclosure Increase Compared to January 2008

Loan Cures

Serious Delinquencies

Foreclosure Starts vs. Serious Delinquencies

While there are some welcome trends in direction, actual foreclosures are lagging. The pent-up need to foreclose is huge.

Moreover, mortgage rates have rising nearly a full percentage point in the last 45 days. This will put a damper on already depressed home sales, making it harder to unload inventory.

Look for months of inventory to soar in the upcoming months with continued declines in home prices. Contrary to what most think, falling prices are a good thing. Home prices need to fall to a point low enough where genuine demand kicks in.

Foreclosure moratoriums are counterproductive and exacerbate existing problems.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

But somehow the paper of record wrote what was supposed to be a definitive article on how the Obama Administration plans to fix the economy without once mentioning that part of the economy, housing, that has traditionally led recoveries but that, partly because of the obstinance of Obama’s economic team, continues to drag down the recovery.

Well, if the infighting was as bad as the ‘bad marriage’ metaphor implies, it would be a miracle if they accomplished much of anything.

Also, IMVHO, when Obama was elected, very few people on the left were realistic about how intransigent the GOP was going to be, nor how intransigent, and how blindly greedy the banksters were going to be. Until there are perp walks and a simplified banking system, this will continue.

————————

OT alert!

klynn, recall our old threads about Yukos? Interesting development reported at CSM today:

Claims that the Khodorkovsky verdict has negatively affected Russia’s foreign investment standing appear to be contradicted by last week’s announcement of a $7.8-billion Arctic oil exploration deal, which was brokered by Putin, between Rosneft and the British petroleum giant BP.

A 2008 US diplomatic cable released Tuesday by WikiLeaks shows that BP has been courting Rosneft for years, despite that company’s close links to the Kremlin and deep involvement in seizing Khodorkovsky’s assets.

But if Medvedev wants to look like a viable candidate for reelection, he needs to do something to break decisively with Putin, his powerful predecessor and likely rival for the job, experts say.

Interesting, eh?

EW, apologies for the OT part of my comment.

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Tuesday, January 18, 2011

Making Money From the Internet

Values, Value and Valuation — The money is all relative

Oh how timing sometimes works out to be funny. I was driving home tonight and started thinking about the value of products, the valuation of companies and how the values that a company portrays can change the rest. No sooner had I sat down to write this piece than the news of Goldman Sachs investing $500 million into Facebook broke and refreshed the entire thing in my mind. So let’s look at these three things, and try to see if one manages to sway the rest.

Values

Do you, like me, find yourself more inclined to use or purchase something that comes from a company that you can believe in? The ethos of a company can — for me at least — completely break me away from the product. That very fact, because I feel that I’m likely not alone in my actions (or lack thereof) can have a serious impact on the bottom line of a company.

Look at Facebook, for instance. When the Social Graph was announced and the new privacy changes went into effect, many people threw up their hands in disgust. But many others continued with life as usual, even if a bit annoyed. Why? Because Facebook has this outward appearance of a company that’s simply trying to do cool things, and it needs information in order to do them. The company’s values seem, for the most part, to be in line with the things that we Internet users want. As such, there was a lot more wagging and a lot less barking from the angry dogs crowd.

You’re starting a company? There’s likely something to be said for developing an ethos ahead of time, making it known and then sticking to it. Would Google be where it is today if not for the “don’t be evil” tag line? Even if you don’t fully believe that the company runs that way, you still remember it. Point made.

Value

When value exceeds cost, even by a single cent, the purchase will be made – Grant Cardone

That quote is one that has stuck with me for some time now. A few years ago I was making my living selling cars and it is sometimes exceedingly difficult to overcome the objection of price. In the technology world, we’re constantly being offered products for “free”. The only cost? A bit of information, a slice of our privacy or somethings similar. But then, after using those “free” products, we start to build our own value for them.

Don’t believe me? Just look at some of the things that you likely use every day. Gmail? You’d pay for that. Twitter? You don’t want to admit it, but it’s likely become a valuable asset to your daily Internet life. The same can be said for so many things and yet we get them for “free”. But there’s a down side to this issue as well — it becomes very difficult for a maker to charge for a product when there are free alternatives. Don’t believe that? When was the last time that a box office movie didn’t get a torrent version?

And yet, even as companies try to build value in their products, still others think that the economy allows for them to set their own values and tell us what something is worth. TV networks are probably the most well-known perpetrators of this heresy. Apple TV launched, ABC and Fox decided to jump on board and see what would happen. Some of the rest? They decided that $.99 was devaluing the product and yet as the provider of the product, there is no one entity that is more unqualified to name the value.

Consider it a lesson in business, I suppose. The potential buyer will determine the value of your product. Always.

Valuation

Now here’s a sticky one. Valuation is one of those strange things because it means so many different things to different people. To the potential investors, it’s a measure of how much money can be made. To the business owner it’s a gauge of how well the business has done. To the end user? It’s…honestly not much.

As a case in point, around TNW we love Twitter. We want to see it succeed and we are sure that it will. The valuation continues to climb prior to any IPO and yet, as users of the service, it really doesn’t matter much to us. Sure, it would matter if the site closed its doors, but beyond that there simply isn’t anything about the valuation number that matters.

And so, as an entrepreneur you have to ask yourself where the balance lies. Do your company values allow you to build value in your product? If so, then the chances are that your valuation will end up right where it needs to be. There’s a fair amount of truth in the thought that, if you handle the small stuff, the big stuff will fall into place.

So with that, I offer you a thought going into the new year — start with your values. The rest will fall into place.

Source:http://removeripoffreports.net/

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The board would want £10,000 of the £25,000.00 that was awarded leaving the legal aided person with only £15,000 out of the £25,000. Ouch! With regards to the exemption, if the amount that was being argued over was £10,000 and the award was 50/50 then half of £10,000.00 being argued over (assuming 50/50) is £5,000.00. There is a £5,000.00 exemption ring fenced and therefore the board would get nothing.

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Thursday, January 13, 2011

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Show me a modern political candidate who doesn’t understand television, and I’ll show you a loser.

When TV became the dominant medium for Americans to consume news and entertainment, political candidates could no longer be successful without looking polished in televised debates, appearing on talk shows and spending big on commercials.

Like the television boom of the 1960s, we are standing on the precipice of a big shift in how public figures are perceived and how campaigns are conducted. Our frontier is social media, and its impact on mainstream political culture is coming on fast.

While my colleagues have been making their predictions about what’s on the tech and social media horizon in 2011, there will be no major U.S. elections next year. Here, we’ll be postulating about social media’s impact on the more long-term future of American civics.

1. There Will Be a Tipping Point

While campaigning and marketing share many similarities, the differences mean everything when you’re talking about democracy’s big picture. Brands can sell by hitting a tech savvy demographic of influencers. Elections involve everyone, whether they’re online or not.

If a large bloc of your constituency is made up of 65+ year-old retirees, chances are a Facebookclass="blippr-nobr">Facebook strategy won’t be time well spent. Despite the enthusiasm of the tech crowd and blogosphere, Twitterclass="blippr-nobr">Twitter is exceedingly far from the mainstream, with only 6% of Americans using the service. And while the world consumes YouTubeclass="blippr-nobr">YouTube videos at a mind-bending rate, viral success is still transient and elusive.

While these tools have certainly proven to be effective in rallying support and contributions, we don’t yet live in a world where social media can make or break a political candidate by itself.

That will change, perhaps even by the next major election cycle.

The future of the social media politician is not about wild speculation and technological uncertainties. It has everything to do with when and how deeply social media can be absorbed into mainstream culture. We are on track for a tipping point — a JFK/Nixon TV debate moment — when everyone on the political scene will acknowledge that we can never go back to campaigns without social.

2. New Media Strategists Will Just Be Strategists

I’ve had the opportunity to talk with the new media strategists for a number of senators, congresspeople and political causes. Despite their differences, they all agree that their own jobs will soon be folded into the larger campaign strategy. As many have already foreseen, social media will not require experts for much longer. As we head toward true mainstream adoption, social will be a default and well-understood tool in the belt of any public-facing professional.

We’ve already seen this happening in the private sector with marketing and PR professionals. As many corporate entities lumber to catch up with those on the cutting edge, so too will government officials and the campaigners who seek their offices.

3. We’ll See the Devaluation of Old Media in Politics/>

Print and radio ads are not as valuable as TV. TV will no longer be as valuable as interactive media. For politics, this is especially so, as the arena (at its best, anyway) warrants engagement and discussion.

As media appetites shift, this is an inevitability. In the U.S., we’re already seeing web use catch up with television in terms of weekly hours spent. Political money will simply go where the eyeballs are, and we’re likely to see a big payoff on social creativity when it comes to future campaigns.

4. Whistle Blowing Gets More Efficient, But That’s It

The WikiLeaksclass="blippr-nobr">Wikileaks saga has ignited plenty of discussion about journalism and whistle blowing in the Internet age. But at the end of the day, the mechanics of an information leak are about the same as they’ve always been: Someone from within an organization leaks damaging information, and the media (in whatever form) disseminates it to the public. Generally speaking, WikiLeaks has only acted as a “middle man” for raw information. It’s journalists who are making sense of it and transmitting it to the public with context.

The web only speeds up this process through digitization and universal access. Governments and politicians will feel the impact of leaks sooner, but it’s unlikely the methods of protecting sensitive information will be much changed.

Your Thoughts?

What do you think will be social media’s biggest impact on the political process? How long until we see a winning campaign strategy that is purely social? Let us know your thoughts in the comments.

More Political Resources from Mashable

- How WikiLeaks Became the Story of the Year in 2010 [VIDEO]/> - The Future of Social Media and Politics/> - How Political Campaigns Are Using Social Media for Real Results/> - How the “Rally to Restore Sanity and/or Fear” Nailed Social Media/> - 17 Web Resources to Help You Decide on Election Day

For more Social Media coverage:

class="f-el">class="cov-twit">Follow Mashable Social Mediaclass="s-el">class="cov-rss">Subscribe to the Social Media channelclass="f-el">class="cov-fb">Become a Fan on Facebookclass="s-el">class="cov-apple">Download our free apps for Android, Mac, iPhone and iPad

The following is an article from Uncle John’s Heavy Duty Bathroom Reader.

If you’re a fan of cheesy films like Manos: The Hand of Fate, Plan 9 From Outer Space, and Troll 2, you’ll love this one. Uncle John saw it last when our local Bad Film Society screened it, and as he was watching, it occurred to him that it actually gave new meaning to the word “bad.” (But somehow he couldn’t stop talking about how great it was.)

THE SIX MILLION DOLLAR MAN

On June 2003, a film called The Room premiered in a handful of Los Angeles theaters. It’s the story of a love triangle between Johnny, a banker; Lisa, his girlfriend; and Johnny’s best friend Mark. The film was the brainchild of Tommy Wiseau, the actor who plays Johnny. Wiseau wrote, directed, produced, and distributed the film. He financed The Room, too, shelling out $6 million of his own money to make it, plus thousands more on print and TV ads and a single giant billboard overlooking busy Highland Avenue in Los Angeles.

The Room was Wiseau’s first feature film. He hoped to use it to launch a Hollywood career… but all he succeeded in doing was blowing $6 million in record time. The Room played to nearly empty theaters for just two weeks before it was yanked from the screen; in that time it had grossed only $1,900, not enough to cover even one month’s rent on the Highland Avenue billboard. Put another way, for every million Wiseau spent, The Room earned less than $320, making it one of the worst box-office flops in history.

(YouTube link)

CITIZEN PAIN

Is there anything about The Room that isn’t bad? The acting is stunningly incompetent- none of the actors had ever had a major film role before, and Wiseau was incapable of providing decent direction. And the love scene between Johnny and Lisa is creepy (picture a Troll doll having its way with a seat cushion, except that Lisa is the cushion). Wiseau recycles the footage in a second love scene 20 minutes after the first, so you get to watch it twice.

As a screenwriter, Wiseau was even worse. New characters appear out of nowhere and aren’t properly identified, so it’s never clear who they are. A number of subplots -such as drug abuse, unrequited love, and bad real estate deals- are introduced, then quickly abandoned. (“I got the results of the test back. I definitely have breast cancer,” Lisa’s mother tells her, and the subject never comes up again.) And though the thickly-accented Wiseau refuses to this day to say where he comes from, English is clearly not his first language. The Room is full of clunky, confusing, and unintentionally funny dialog: When a (never-identified) character catches Lisa and Mark kissing at Johnny’s birthday party, and confronts them, Mark yells, “Leave your stupid comments in your pocket!”

(YouTube link)

PATRON ZERO

The movie likely would have died a quick and unmourned death had an aspiring young screenwriter named Michael Rousselet not happened to see the film near the end of its two-week theatrical run. As Rousselet sat alone in the empty theater, he was stunned by what he saw- bad lighting, out-of-focus scenes, dubbed dialog out of sync with the lip movements onscreen, poorly designed sets (it’s never clear which room is the room, or why the room is so important), one wooden, sophomoric acting performance after another, and much, much more. Whenever Rousselet thought that The Room had given all that it had to give, it would cough up some wonderful new chunk of mediocrity and incompetence for him to savor. It was unlike any film he’d ever seen. Sure that such a flop would never make it onto DVD, Rousselet sat in an empty theater (while the movie was still running) and called everyone he could think of on his cell phone, telling them they had to see The Room for themselves before it vanished forever.

(YouTube link)

MISERY LOVES COMPANY

That theater didn’t stay empty for long. Though The Room died at every other venue where it was shown, Rousselet’s promotional work paid off at this one. A small crowd of friends joined him at the next showing, and as these people phoned their friends, the numbers grew steadily at each remaining screening. “We saw it four times in three days, and on the last day had over 100 people there,” he told Entertainment Weekly in 2008.

By the time The Room ended its theatrical run, a small but dedicated fan base had already begun emailing Wiseau to thank him for his efforts and ask him to screen the film again. Wiseau received dozens more emails in the months that followed, and in June 2004 he booked a small theater in West Hollywood for a single midnight screening. That event was a hit -so many people turned out to see the film that Wiseau booked another midnight showing a month later, then another, then another.

As the crowds continued to grow like lookie-loos at a traffic accident, he expanded to two screens at the multiplex, then three, then four, and then five. Strong word of mouth among a steadily growing fan base of “Roomies,” as they call themselves, led Wiseau to schedule screenings in cities up and down the West Coast, then in other parts of the United States and Canada, and eventually in Great Britain. And with foreign-language editions reportedly in the works, The Room may soon have fans all over the world.

(YouTube link)

SPOONING

Have you ever been to a showing of the 1975 film The Rocky Horror Picture Show? As was the case with that cult film, The Room’s fans have created audience participation rituals all their own. Roomies attend screenings dressed as their favorite characters, shout out their favorite bad lines at the appropriate moments, yell “FOCUS!” during blurry scenes, march out “in protest” during the troll doll/seat cushion love scenes, and throw plastic spoons whenever the spoon photograph in Johnny’s apartment appears. There’s no question that the Roomies are there to laugh at Wiseau and his masterpiece, but he says he doesn’t mind. “As long as they laugh or enjoy themselves, I enjoy with them,” he says.

(YouTube link)

NO ROOM AT THE ROOM

If you’re ever in L.A. on the last Saturday of the month, go see The Room. Buy your tickets early- even when the film is being shown on five screens, The Room sells out quickly, especially when Wiseau or other stars appear in person. Wiseau’s fabulous flop has been reborn as the hottest cult phenomenon in decades, and at an estimated gross of more than $1,000 per screening, The Room is on track to break even sometime in the year 2504, maybe sooner if you consider profits from The Room t-shirts, CDs, DVDs, movie posters, and talking Johnny bobblehead dolls.

___________________

The article above was reprinted with permission from the Bathroom Institute’s newest book, Uncle John’s Heavy Duty Bathroom Reader.

Since 1988, the Bathroom Reader Institute had published a series of popular books containing irresistible bits of trivia and obscure yet fascinating facts.

If you like Neatorama, you’ll love the Bathroom Reader Institute’s books – go ahead and check ‘em out!

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Monday, January 10, 2011

Being Right or Making Money

Luck's father, Oliver, says the decision was based purely on "staying in a place he loves, playing beside teammates he adores and getting the degree he covets." Perhaps, I can relate to Luck better than some because I have the perspective of a 19-year-old high school senior that wants nothing more than to be in college right now instead of high school.

Being a senior in high school is not a horrible experience by any means, but right now, if I could be anywhere I wanted, I would be a second-semester freshman in college. Maybe a lot of high school seniors say that, but I am in my 14th consecutive year at the same independent private school. I have gone to school with more or less the same people for that entire time. I am ready to change schools, take some new classes, meet new people, and leave home. So when Andrew Luck announced he wanted to stay at school instead of going pro, I totally understood how he felt. I wouldn't want to leave school either.

On another note, even though the current NFL Collective Bargaining situation reported influenced Luck's decision very little, it is still a major issue worth examining in the context of Luck's decision. A major crticism of Luck is that he will lose tens of millions of dollars for not turning pro.

On the surface, that is almost guaranteed to be true even if his draft stock doesn't go down at all, and he doesn't get hurt playing for Stanford next year or the year after that because the new CBA realistically has to have a rookie payscale, which would result in Luck receiving a significantly smaller salary than the one he would have gotten had he gone pro this year.

But a closer analysis of the broad financial picture reveals that Luck made a sensible decision that very few big-time college athletes are capable of making. Assuming Luck gets his architectural design degree, he will still be set up to make good money regardless of what happens to his football career.

If something bad happens, he has a college degree to fall back on. If he plays for 20 years and makes more money than most of us will see in our lives, then he will have options for a real job beyond football if he wants to leave. Most former players who don't want to coach or don't make good coaches and don't have enough education, end up on the street because they spend too much money during their playing careers. By getting a degree, Luck assures himself that he will not share that future.

Andrew Luck has the right ideas of how to build a successful future. The rest of the world of big-time college athletics should take notice. And his critics should think twice before saying anything.

I recently watched the movie Exit Through the Gift Shop from well-known artist Banksy. I got a kick out of this film for multiple reasons having liked Banksy's artwork for years now.

What most amused me though is how well it goes about making you question what celebrity is and how much you can achieve by becoming famous. The key point for me is questioning whether you really need to be creative and innovative above and beyond being famous.

Then Mike Butcher over at Techcrunch went and posted something this morning about startup teams trumping celebrity tech entrepreneurs. In summary, he too is making the point that execution far outweighs celebrity.

Basically, what I'm getting at, is all the parallels you're starting to see between the startup world and the movie business. I am definitely not an expert on the movie business and can only imagine what it's truly like from afar. Yet, we've all seen enough of it to realize a bit how things work in Hollywood. You basically have a couple large companies or studios as they're usually called. There you have management at the top who are the power-brokers in the industry. They back films which are used as vehicles to market actors who either succeed or not. If they do succeed, they are cast in further films and a ton of marketing is thrown at these films, regardless of whether these actors have talent or not.

Ultimately, the goal is to make as much money as possible and if you're the one making all this money, keep other people out so you can continue to make as much money as possible. Sure, there are some stand-out actors, managers and studios who go against the grain but basically it's an industry optimized to make money. Simplified by me immensely but I believe you understand what I am saying.

Now let's switch over to the startup world. It's no longer Hollywood and we're now a bit north in Silicon Valley. You have a couple firms who call all the shots and are known as Tier 1 VC's (with some major players like Google, Apple, and Facebook thrown in for good measure).

These VC's fund firms instead of films run by entrepreneurs instead of actors. Some of these entrepreneurs are successful and some are not. Those who are get funded further by these Tier 1 firms. Lots of companies are started and sold since these power brokers in the Valley sit on each other's boards and pass deals back and forth. The power brokers continue to make money and those entrepreneurs who don't lead to successful exits get weeded out (where's the reality TV version of "out to pasture" for entrepreneurs?)

Ultimately, as in the movie business, you make as much money as possible and keep out the riff-raff who would keep you from making tons of money as long as possible.

Now don't get me wrong. I am in no way arguing about whether the movie or startup business is right or wrong or skewed in someone's favor or not. I'm also probably simplifying it too much as well. But the point I am making is that we are in a world where it's about making money. Sure, you can get your touchy-feely on and say you're changing the world but ultimately you wouldn't "work" if it wasn't about making some money.

Hence, my advice to any entrepreneur is to take advantage of whatever you have if you ultimately want to be successful. If you are naturally good looking, get your face out there. Be on TV and in the press. If it helps you make money, go for it.

At the same time, if media attention doesn't help you make more money, don't focus on it. Get your pretty head down to business and execute like hell to innovate, optimize and sell your product. Or have the best of both worlds. Be a CEO focussed on getting your brand or product out there and have a number two (great blog post by Ben Horowitz) who takes care of business. What you need to focus on is making money and being the scrappy entrepreneur that you are, you'll optimize wherever you can to achieve your goal.

In the end it's never about who was most popular that determines success. Just think back to all those football players and cheerleaders in high school. (I've seen some of them from my high school....thank you Facebook.....and had a good laugh!) So often there are people you never hear about making tons of cash since they don't need to focus on media.

On the other hand, if Twitter/Foursquare/Zynga/Groupon hadn't received so much media attention, you think they'd be where they are now? I highly doubt it and I guarantee you that they had a clear strategy in place to use media (and position their founders) from the start. Hence, don't waste time focussed on the wrong things. If you're a celebrity entrepreneur who's counting his millions hats off to you. If you've become a media darling and are broke, well tough luck kid. Try something new.

By the way, here's what Exit Through the Gift Shop is about cut and pasted from Wikipedia. Think what you will about whether it's a real story or not but reast assured the dollars earned by "Mr Brainwash" were real!!

Exit Through the Gift Shop: A Banksy Film is a Gonzo Documentary which tells the story of Thierry Guetta, a French immigrant in Los Angeles, and his obsession with street art. It is presented as a documentary, but reviewers have questioned its factuality. The film charts Guetta's constant documenting of his every moment on film, to his chance contact with his cousin, the artist Invader, and his documenting of a host of street artists with focus on Shepard Fairey, and also Banksy though the latter's face is never shown, and his voice is distorted to preserve his anonymity

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Friday, January 7, 2011

Ways of Making Money

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.

For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.

...

Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.

We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

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Case Study: How Dave Matthews Band Has Embraced The Modern Music Industry In Extraordinarily Profitable Ways

from the but-that's-impossible... dept

Over the last few weeks, we've noticed a few of our usual critics attacking the basic claims concerning successful music business models, because some of the bigger concert tours this past year ran into trouble, and because some of those tours seemed to realize they were charging too much. Of course, it's unfortunate when people misunderstand basic statistics and what data shows. First of all, we've never claimed that concerts were the only way to make money in the music business. There are lots of ways to offer scarce goods that have nothing to do with touring. Second, the fact that some big tours had trouble -- and misjudged the market is hardly a condemnation of touring as a money maker. It just means that some tours misjudged the market. This is hardly a surprise. For years, many tours had underpriced tickets, leading to a valuable aftermarket for scalpers. But over the past few years, major acts and venues have tried to capture more of that for themselves, leading them to push the market ever higher. There was obviously a limit as to how high those prices could go, and people have started to figure that out. This is a good thing, not a bad thing.

But the key point to recognize is that just because some acts misjudged the market, that's not a condemnation of these other ways to make money. This claim reminds me of similar claims back in the early 1990s about the productivity of computers in the workplace. A few companies did massive implementations that were done poorly, and turned out to be way too costly. And with poor implementation and poor planning, the end result was that these new computer systems didn't increase productivity. Suddenly, there were claims and press coverage about how computers didn't lead to any productivity gain. The mistake was conflating a bad implementation with what would happen if you implemented stuff properly. No one here has said that "just touring" automatically is a successful strategy. That's because it's not true. Instead, a properly implemented multi-prong strategy, that fits with both what the musicians want and their fans want, can work quite well.

A perfect example of that may be the Dave Matthews Band. Slate recently did an article on the massive success of the band. A big part of that, not surprisingly, is a relentless touring schedule. However, as the article notes, DMB is making a lot more money touring than most people realize. It's consistently one of the top earning touring acts in North America, despite not being as "big" a name as the others on the list. In 2010, for example, DMB was the 3rd largest grossing tour in North America, after Bon Jovi and Roger Waters, and ahead of such names as Paul McCartney, Lady Gaga and The Black Eyed Peas. And they did this with significantly lower prices than most of the other acts in the top 10. While tickets to Lady Gaga concerts averaged $98 and Sir Paul's concerts went for a staggering $138.49, DMB's average ticket price was $57.38. And, as the article notes, they did this in a massively profitable way, unlike some concert tours which cost so much as to have them losing money. On top of that, the band uses the famed Grateful Dead model for keeping fans coming back for more: changing up their songs each time, and having fun going off on different jams, that make each concert unique.

But, of course, it's not just about touring. The band has done its own version of CwF+RtB, with over 80,000 fans paying $35 per year for its fan-club (and the 80,000 number is three years old, so I'd imagine the real numbers are now much higher). That's $2.8 million from the fan club alone. Similarly, the band appears to sell a ton of merchandise. The article notes that, back in 1998, the band would sell $200,000 in merchandise per day, while on tour. Obviously, that data is way out of date, but the band seems to have little trouble coming with good "reasons to buy" for its fans.

I have no doubt that the usual critics will mock this, claim it's an exception, or somehow complain that this is somehow "bad." But it seems clear that it's working great for the band itself, and they're quite happy with it. And, really, in the end, that's what these business models are about. Finding the right mix for bands to connect with fans in a meaningful way, while setting up the structure that allows those fans to support the band. DMB seems like a perfect example of a band doing this on a massively large scale.

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