

Justin Timberlake Made a Fortune Giving His Album Away - michaelgrafl
http://www.businessweek.com/articles/2013-03-29/justin-timberlake-made-a-fortune-giving-his-album-away

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bitwize
Yes, but can a small time musician make a fortune giving their album away?
Timberlake had prior fame and considerable marketing resources (including
dollars) at his disposal to get the business model right. That makes a world
of difference.

I've found that the most vocal proponents of copyright crackdowns and DRM are
small-time musicians, authors, etc. Piracy won't affect Lady Gaga's sales, but
for that indie band from JP you love so much, it could mean the difference
between being able to feed their families with their music, and having to work
a shit job and therefore play less, perhaps not playing at all, to make ends
meet.

~~~
jiggy2011
True, but it's a double edged sword. Before the internet and napster, were
small-time musicians any better off? I still remember the market being
dominated by big players with loads of commercial backing.

The tech makes music production much easier/cheaper and publicity/distribution
trivial. The flipside of that technology is that it makes mass piracy much
easier.

There are probably a lot of people willing to listen to obscure small time
musicians for free, but how many of them would be willing to stump out $15 for
a cd?

~~~
tptacek
The major labels worked somewhat like venture capital firms. They funded lots
and lots of small artists with advances that few artists were ever successful
enough to pay back, with the ultimate effect of subsidizing a middle class
lifestyle for them while on contract.

Artists today far more dependent on touring and merch revenue (fun fact:
artists sold merch in the 1980s too!). There seem to be a lot of
misconceptions about touring revenue. Justin Timberlake might pull in 6
figures from a show. Most indie acts can count on something more like $50 per
band member per night.

~~~
jiggy2011
I wonder how much that changes if you manage to take piracy out of the
equation?

In other words, are less artists funded through A&R because there is a higher
risk from piracy that previously, or is there also a factor that A&R becomes
less important if musicians are able to self finance music production and
distribution therefore allowing the masses to do talent discovery on their
behalf?

I know a few independent small time artists and their plan seems to work on
the basis of "do enough shows and get enough youtube hits & twitter followers
and someone will offer us a contract".

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shortformblog
My question: How much of this is Timberlake leveraging his success in careful,
well-calculated ways—and winning big, and how much is it the streaming? The
scarcity of new Timberlake material for seven years probably created an
atmosphere where fans were super-curious.

There are broader lessons in marketing here beyond just the streaming. The
streaming is one element.

A recent Billboard interview with JT's manager, Johnny Wright, sort of
underscores this:
[http://www.billboard.com/biz/articles/news/branding/1552474/...](http://www.billboard.com/biz/articles/news/branding/1552474/justin-
timberlake-manager-johnny-wright-on-secret-plans-around)

~~~
KoulMomo
I'm also really impressed with Justin Timberlake's branding strategy
(everything post "Dick in a Box").

I wonder how many people out there, like me, were converted from hater, to
fan.

~~~
miloshadzic
I don't think "Dick in a Box", "Motherlover" and "Three way" were part of his
marketing strategy. I think he's just a cool guy.

------
laeg
Can we all just take a moment to revel in his greatness.

[http://www.youtube.com/watch?feature=player_detailpage&v...](http://www.youtube.com/watch?feature=player_detailpage&v=EpCgZgG-
HTo)

For the next 10 minutes, I'm going to be a fan girl.

~~~
rzendacott
He and Jimmy Fallon did a History of Rap performance that is also pretty
awesome. <http://www.youtube.com/watch?v=2EPl0OGz2Cg>

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anigbrowl
Interesting, but it's hard to know how much impact streaming had on sales vs.
other factors. For example, Justin Timberlake e also appeared on _Saturday
Night Live_ and then appeared on _Late Night with Jimmy Fallon_ every night of
the following week, both as sketch artist and musical guest. 6 nights of
appearances on a broadcast network in a single week is an unusually high
degree of promotion; I've never seen as much for any other album launch.

~~~
edwardunknown
[http://www.nytimes.com/2013/03/28/arts/music/justin-
timberla...](http://www.nytimes.com/2013/03/28/arts/music/justin-
timberlakes-20-20-experience-album.html) The amount of publicity for this
album is mind boggling and it's disturbing how willing people are to be swept
away by it. I hope at least when Universal's done paying for all the fake hype
they won't have made much profit.

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inkaudio
The key to proper analyst of data is deciphering what is correlation and what
is causation. The article mentions that in Spotify’s home of origin Sweden,
where it is extremely popular, majority of people stream music, and do not pay
for individual albums sales. Easy to argue his album popularity on streaming
only services was mere correlation and did not lead to increase album sales.
If you follow the industry closely, you’ll notice the article left out the
well known sales boost Grammys performers get. This post Grammy Awards sales
boost is a know fact. Justin Timberlake had an advantage, he was the only
popular performer at the Grammys releasing something new after the Grammy
Awards. The other performers albums were already out for a year a more. We can
also argue that the free streaming on iTunes also help lead to sales. The
streaming on iTunes is ideal, it is only temporary, so if you really like the
album you’ll have to buy it. Another important data point that was left out of
the article was Justin Timberlake's album was heavily promoted on the new
Myspace. Despite Myspace seemingly zombie status it still has millions of
users, many of whom still go to myspace for music.

------
Avshalom
not that 32,000 is anything to sneeze at but it appears he actually made a
fortune selling his album.

EDIT: which is to say the actual headline is: "Spotify probably better
hypemachine than Clear Channel, at the moment"

~~~
forrestthewoods
A fortune? A million CDs at ~$10 a pop minus apple's cut (digital) and
multiple expenses/middle man cuts for physical it probably made 5 to 7 million
dollars.

Given the number of people involved in the creation of a CD that's pretty good
but not exactly a fortune. Many fortunes will be made from this endeavor, and
they'll be from things other than direct sales of music content to consumers

~~~
sjtgraham
Timberlake is such a successful artist it is beyond reasonable doubt that all
deals he has are on favoured nations terms so what he actually made is likely
at least on the high end of your estimate, and circa $7MM in a WEEK is a
fortune whichever way you slice it.

Also, Suit & Tie had 9,394 radio spins in it's first week, which is the most
in the chart's history, that's a first week audience of 93.4MM people [1]. I'm
not sure what the royalties are for radio play in the US, but I imagine it's
nothing to be sniffed at.

Keep in mind, this is the first week; Timberlake is absolutely going to make a
complete killing from this album and all the related opportunities that arise
from it, e.g. touring.

[1] [http://mashable.com/2013/01/21/justin-timberlake-suit-and-
ti...](http://mashable.com/2013/01/21/justin-timberlake-suit-and-tie-itunes-
radio/)

~~~
adventured
I own a group of radio stations. We pay about 5% of our sales to music
licensing costs.

Frankly I never cease to be amazed at what a great deal that is compared to
how Spotify / Pandora / etc are getting screwed big time on licensing fees.

Traditional radio was / sometimes still is an extremely profitable business.
Once you exceed basic costs, it's all gravy minus sales commissions and some
production costs on commercials etc. Radio is basically one giant sales
business.

It seems as though for radio, from day one, it was heavily a promotional
medium for selling physical records, with the added bonus of a sales cut for
the music industry. With the move to digital music, I think they stopped
looking at it as a means of promotion so much and wanted to own the whole
channel (as much as possible). Short sightedness, spurred on by a mixture of
fear (eg Napster) and greed (opportunity to rewrite the distribution rules).

~~~
edwardunknown
Labels were dependent on radio to sell albums but things like Rdio completely
replace buying music. I've been using it for a couple months and already I
can't imagine buying music on iTunes or anywhere else. It really is a game
changer.

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kjeldsendk
Justin Timberlake is a cool guy that makes great music.

And.. he shares his fun times with everyone, SNL, dick in a box, motherlover,
3somes with lady gaga, jizz in my pants etc, he even made the five timers
club. Then he hangs out with Jimmy Fallon for 4 days, does a new tune every
day and the absurdly funny suit and tie sketch. He tops it all with his
medley.

Not to mention his acting career , guesting several big hits during the time
he didn't make music himself.

He might have been gone for 7 years, but he really was here all the time
building his street cred to unseen heights and backing it up with an album
that is worth owning, just like the previous 2.

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dobbsbob
Musicians never make money from record sales unless they have multiple
releases like JT. The studio eats almost all the revenue of the first couple
of albums and the vast majority of artist income has always been merch,
advertising and live shows. Thats why its important to just give away your
music so you create a large fanbase that sells out tours.

Bloodhound gang is a good example. They record everything on a laptop, give
all the tracks away and sell out a tour for $3million plus a few mln in merch,
which is pretty good when theres less middlemen to siphon the income.

U2 made 700million last yr touring. None of their albums come close to that
sales figure so they also give away songs to promote the real income of live
shows

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paulhauggis
If he hadn't made millions on albums he didn't give away, he would never be in
a position to give them away and make money.

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bogger
I'm wondering if there is a mistake in the numbers.

The album has 12 tracks, so if the whole album was streamed 7.7m times at
$0.005 per track streamed, the royalty payment would be closer to $400,000

~~~
graue
I'd assume that's 7.7 million _track_ plays.

7.7 million * $0.005 = $38,500, which is the right order of magnitude. Then
note that it says " _less_ then [sic] half a cent per listen".

~~~
polshaw
Sorry for OT but.. _FFS!_ Now not even 'business journalists' can tell the
difference between than and then.

~~~
anigbrowl
They're just giving free reign to their creativity, man. Don't be like a king
trying to rein on their parade.

Seriously, it is extremely depressing how low editorial standards have fallen.

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ntomaino
Favorite song on the album?

~~~
elithrar
Blue Ocean Floor & Strawberry Bubblegum for me.

(also, this has to be my weirdest HN comment ever)

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Fjslfj
[http://en.m.wikipedia.org/wiki/Correlation_does_not_imply_ca...](http://en.m.wikipedia.org/wiki/Correlation_does_not_imply_causation)

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coryl
It seems like music is the loss leader these days, I'm curious to know the pay
day from touring.

~~~
alan_cx
From what I can tell, and the model I would advocate, is that recorded music
is advertising for a live tour, which does make the money.

And, IMHO, that is how it should be. A recording, to my mind, is faked music,
produced to an inch of its like. Its like air brushing. A real artist, or
musician, can perform live, and that is where they should make their money,
performing their art. That is the artist. Buy a MP3 or CD and you are buying
5% artist, 95% corporate skimmed off "tax".

Granted a lot of pop act's tours are fairly faked up, but at least you see the
buggers put in the effort!!!

IMHO, "piracy" keeps these artists honest.

~~~
skrebbel
which is why all electronic music is fake and not real art!!

~~~
rjtavares
And Pixar movies are also not real art!! /dumbopinions

