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Fat Freddys returned to the number one album slot last week, third time at number one. I'm guessing that there were a few hundred folk among the thousands at Rhythm and Vine in Gisborne for New Years who hadn't purchased the album raced out when they got home and nabbed it.

Fat Freddys came up in the Weekend Herald's Business section in their article called Kiwi Music Hits Manistream (link) . here's a snip..

Sony BMG boss Michael Bradshaw ... said there was a view out there that when the main labels were not around, the independents would pick up the slack. That was not going to work - not if bands wanted to start selling internationally.

"I've been involved with marketing our records internationally for many years and we're talking millions of dollars and I really don't see where that money is going to come from unless we're here," Bradshaw said.

So, let's look at a few recent examples of Kiwi acts cracking it internationally, and see how many of them signed to a major label here, and used that megabucks offshore marketing to make it.

Fat Freddys Drop
Steriogram
The Brunettes
The Datsuns
Zed

None of them signed to a major label here before making headway internationally except Zed, who managed to get signed in the US and went on to do a song for an Adam Sandler movie (The Hot Chick). The Brunettes had a distribution deal with EMI NZ for their last album, but their US tour last year was set up independently, and led to their signing with US label Subpop.

The sidebar to this story was on the success of Dirty Records (Link) who have sold 280,000 albums, mostly on the back of Scribe's album.

Another good look at the music industry popped up in the Sunday Star Times at the end of last year - it's no longer on their site, so here it is in full.


Music lesson for everyone
18 December 2005, By ROD ORAM, Sunday Star Times

Perhaps over the holidays you'll have more time than usual to listen to the radio and to one of the great New Zealand success stories of recent years.

New Zealand artists now account for 21 per cent of the music played on air, up from less than 2 per cent in 1996.

This is a triumph of industry ambition rather than government regulation. With great enthusiasm, radio stations, record companies, artists, retailers and industry associations have worked together to exceed the voluntary target they set themselves.

In the process, they have enlivened our lives, helped define us as a nation at home and abroad and encouraged many more young people to write, sing and play. But the industry and its artists still struggle to make a living. Music is a host of mostly minuscule unsustainable businesses.

Retail music sales have been falling by about 7 per cent a year for the past six or seven years, in line with world trends. Sales may total only $200m this year, of which NZ artists have roughly a 20 per cent share.

While there are some money-making hits, other success is usually a relative term. A CD is a winner if it sells 1000 copies. But thanks to extremely low costs through digital DIY recording and production, it might be slightly profitable. An independent label and its band might
share perhaps $5000 in profits - a meagre return for months of hard work.

In the wider world, a deluge of artists has turned music into a commodity. And the internet's brutal assault has massacred record company profits. Trying to capture an audience - and make money out of it - has never been harder.

Since everybody else in the world has access to the same technology,success will flow to those who use it in the most creative and persuasive ways. This is New Zealand's big chance. We have rich and diverse music thanks to our many cultures, we have a slightly exotic, intriguing story to tell about who we are and where we are in the world, and we're good at striking a rapport with people.

To do so, though, requires the New Zealand recording industry to make an enormous improvement to its skills.

Here are seven lessons:

# Nurture the talent.
The upsurge in interest in local music is attracting teenagers into writing and performing. This year's Coke Smokefree Rockquest competition drew 650 secondary school bands playing their own compositions. The Play it Strange song writing competition for the same age group had 315 entries. A recent television documentary on Play it Strange and an upcoming commercial double CD of its top 30 songs reveal the passion and growing sophistication of these young composers.

This broad base is crucial to talent development, says Mike Chunn, chief executive of the Play it Strange Trust, NZ chief executive from 1992 to 2003 of the royalty body, the Australasian Performing Rights Association and a member of the legendary NZ band Split Enz in the 1970s.

It's a numbers game, he says. The more teenagers deeply into music, the better the chance a few will rise to the top of world rankings. He likens it to rugby. We have a large and talented All Blacks squad because of the depth and intensity of school, club and provincial competition.

# Use the technology.
Artists and labels are starting to make money from selling songs through internet downloads. Most of the activity has been through home-grown sites such as Amplifier but a few Kiwi songs have achieved global distribution through Apple's i-Tunes. But paradoxically, it might never have been easier. The internet and mobile phones are radically changing the way audiences are won, music delivered and money made.

Since everybody else in the world has access to the same technology, success will flow to those who use it in the most creative and persuasive ways. This is New Zealand's big chance. We have rich and diverse music thanks to our many cultures, we have a slightly exotic, intriguing story to tell about who we are and where we are in the world, and we're good at striking a rapport with people.

# Build a rapport with audiences.
Local bands are excellent at building local audiences, which explains how this year, Fat Freddy's Drop was the first band recorded by an independent label to enter the charts at number 1. It also swept the music industry's Tui awards. But local bands are only just learning to build global audiences over the internet. Given Kiwis' personalities, more are likely to succeed.

# Develop business skills.
The local music industry has made great strides in sorting out its structure and organisations and getting them to work better together. It has also built better relationships with major international labels. But it does not have the skills to be a serious or sustainable
wealth generator, and it never will if it remains almost entirely a domestic business.

# Create new ways of making money.
Licensing of Kiwi music for films, commercials, video games and other uses is starting to increase. Innovation is crucial. For example, Tardus, an independent label, has put together a CD of Kiwi music which will be distributed to about 200 US creative directors of JWT, the international advertising agency.

# Outgrow government assistance.
Six years of sizable government funding under a Prime Minister who doubles as Culture Minister is great, but it won't last. When the government changes, support and money will probably dry up. The industry has used the money well so far but is still a long way from self-sufficiency.

# Forge a distinctive NZ brand.
We're too diverse and interesting a nation to have a narrow "Kiwi" brand of music. But we can create highly distinctive forms of music under a distinctive brand of New Zealand music business. To cut through the global cacophony, we need to be just as famous for the way
we make money from music as we are for the music we make.

At the heart of the business brand will be some of New Zealand's greatest strengths - our ability to be small but global, to be remote but accessible, to be different but authentic. These qualities are highly prized in the world. People will pay well for them.

Yet, this isn't just a music thing. These lessons apply to almost any business. They are our hope for a fulfilling and prosperous future.