U.S. Immigration Policies & the 4 Ways It Will Change Music

In a time where globalization is so prevalent, governmental policies and the U.S. music industry are inadvertently stomping the globalization brakes with a heavy foot. International musicians are dominating the Billboard charts, global artists are in high demand in American stores, and fans demand tour dates in the States, however with all that said there is about to be a tremendous decline in international music and it starts with immigration visas and its effect on touring.

Some procedural background: International bands looking to tour/play in the United States can’t just jump on a plane and hit up the club circuit, rather they must first obtain a visa. Despite having a slew of visa options for U.S. non-citizens, the visas relevant to international musicians are often types “O” and “P.” Varying slightly in some specific areas (most commonly in the length of time a musician can remain in the U.S.), one thing remains consistent - visas can cost a lot of money, and burn up time, energy, and patience in order to acquire. International musicians, American labels focusing on international bands, domestic/international agents, and overseas labels rely heavily upon a slow and steady grassroots marketing approach to develop a fan base. This technique could potentially be butchered. Here comes the boohoo bad news: The U.S. Citizens and Immigration Service (USCIS) is now imposing stricter application requirements, along with stringent procedures that will severally limit the flow of international musicians. This will ultimately lead to 2 sets of problems: (1) touring effect and (2) a consumer market effect.

TOURING EFFECT:

As the new visa requirements will eventually cripple both international musicians and U.S. bands, here are the immediate effects, especially for oversea musicians:

1. An attorney relationship is required

Type O and P visas require a U.S. based “sponsor” that must vouch for the international parties visiting the States. Prior to the immigration amendments, musicians typically relied upon an agent, manager, label, or venue/concert representative to serve as a sponsor. Now the USCIS is limiting who will be considered “sponsors” or a “qualifying agent” by relying on more reliable and testable sources. Attorneys are now seen as the major component to maneuver the USCIS red tape OR, the unrealistic candidate of management companies who have deep relationships with the USCIS. For international musicians, teaming with a U.S. attorney is now an essential element of touring in the States.

2. Diluted Number of International Bands Performing at U.S. Music Festivals

Due to the new harsh visa procedures, visa sponsors are now required to strictly detail where and when the international band will perform. This component essentially eliminates international acts picking up random U.S. dates or returning for follow up shows once a successful tour is finished. Further, popular U.S. music festivals like SXSW, which carve out a specific number of slots for international musicians, will soon dwindle. For an international musician who relies upon U.S. exposure generated from domestic festivals, the risk/reward and financial component involved is now a savings account suicide. Labels will unlikely bankroll for a band to come play one festival without a significant number of set concerts following the date.

3. Social Sanctions are a B*tc*!

American musicians may not feel the immediate effect of strict visa requirements for international musicians, but in the world of international law social sanctions are soon to follow. If the U.S. continues to keep its talent in house by limiting the exposure of international acts, the world’s entertainment economy will follow suit which will severely impact American talent (more specially, mid level bands). For example: If Greek musicians are in immediate demand on American soil but they are unable to tour in the U.S., Greece will see a decline in their entertainment exports. If Greek musicians don’t have the opportunity to tour in the U.S., they can’t build a fan base, which means they can’t sell albums, partner with U.S. companies, or establish beneficial licensing agreements. This all causes a slight ding in entertainment exports. The way the international community typically works, instead of changing particular laws, which can take years to accomplish and are often seen as drastic, countries take calmer approaches and issue indirect social sanctions. In the example above, Greece may issue incentives for Greek musicians/labels that play festivals and concerts in their homeland OR issue penalties/special taxes for venues that book American bands. This is essentially what the movie industry has been experiencing with state incentives for filming in particular states. So to American bands, in short, if there isn’t opportunity to international musicians in the States, in the future your opportunity to play outside of American borders may be limited. Call it a social sanction backlash thanks to your governmental policies. Regardless, it’s how the international community responds to a disapproving black-eye.

MARKET EFFECT

4. Less Cross-Over Appeal

When there are less international musicians being exposed at American festivals, this equates to less airplay on American radio, less exposure to potential fans, which trickles to limited market demand, promotions, marketing, and eventually album sales. When there isn’t a demand, cross-over marketing opportunity with businesses and products come to a halt. This model swings both ways, as American musicians looking to partner up overseas will see limited opportunity because the markets will be saturated with domestic musicians.
UPDATES (as of 3/9/10) The backlash has begun and it starts in the world's hottest upcoming market - Australia. The Department of of Environment, Water, Heritage, and the Arts, headed by minister Peter Garrett highlights plans for "Bringing Aussie Musicians Centre Stage." Under the plan, if international touring artists (currently heavily saturated with American acts) perform in Australia, the plan allegedly assures Aussie musicians the opening act. On the surface, the plan promotes Australian bands by teaming with better known acts. Although not new to the industry by any means, the strong push to implement the plan is seen as backlash to the recent U.S. immigration policies making it harder for international musicians (more specifically the growing Aussie market) to tour in The States.

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3 Ways to Partner With a Non-Traditional Music Retailer

American Apparel Clothing Company had the right idea when they teamed up with French Pop sensation Sebastian Tellier to release his American album a few years ago. Their 350 stores essentially became home as the exclusive retailer for Tellier. As this method of non-traditional retailer / music partnership isn’t the first of it’s kind it did help launch the growing trend of international globalization with music and retailers. For retailers it isn’t all about the music (sorry musicians), as it is doubtful Tellier’s lack of popularity in the States suddenly drove boy shorts and tank top sales through the ceiling. American Apparel benefited from a market expansion, capitalizing on a sultry French singer to expand their sexy clothing, and to possibly generated income from wasted shelf space. Tellier on the other hand catapulted himself into a cutthroat American marketplace by having one of the most popular clothing stores vouch for him, essentially gaining instant credibility overnight. This model is simple and fortunately becoming more maneuverable for musicians on all levels. As bands continue to fight the grind hoping for 2 inches of shelf space at Best Buy, adopting the Tellier model may prove more beneficial. Be smart, be productive, and follow the 3 ways to partner with a non-traditional retailer.

Music professionals fail to study the dim industry statistics. They are scary as hell, depressing, and make you want to switch careers. However buried deep in the gloom there is interesting information that provides hope. In 2008, the hierarchy of album sales read as expected: Mass merchants sold an overwhelming majority at 120 million units, chain stores came in second with over 115 units sold, non-traditional stores at 80 million, followed by the dying breed of indie stores at 20 million. 2009 paints an entirely different picture. Mass merchants have experienced an -18% drop, chains -23%, indies down -16%; but the non-traditional retailers gained +8%. In an industry that consistently feels a 30 to 40% punch to the gut year after year, any gain is worth noting. It's even more interesting to note that the only real gains come from stores that don't even specialize in selling music.

To make sure we’re all on the same page, just a quick synopsis. As discussed in a previous post – Why You Need a Record Deal – Nielson estimated about 105,000 releases in 2008 in which only 6000 of those albums sold 1000 or more. Mass merchant stores like Target, Walmart, Best Buy, etc. sell the most music in today’s marketplace (Walmart controlling 20%). On average these stores have about 750 different titles on hand. Clearly the slots are reserved for A-list artists who are not only on today’s top 100 list, but also the best selling artists of old who continue to spin a fan base. Further these mass merchants shelf albums as “loss leaders” which means they price music so low (ie: the artist, label, merchant make nothing), the merchant banks on drawing in customers who will buy additional store products outside of CD’s. This model, coupled with limited spots basically means it is damn near impossible to crack the mass merchant market and see a benefit. If you’re trying to crack this market as an unsigned band you might as well set your sights on becoming the King of England and marrying a Playboy Bunny as well. Good luck! Chains stores, similar in many ways, tend to reserve their shelf space to musicians they are positive will sell. Because of the dying market, chains can’t afford to risk limited sales from an indie artist, as they can almost guarantee X amount of sales with a major musicians seeing their labels will pour millions into promotion. Chances you’ll crack the chain stores shelves, much like the mass merchants, sits around zero. As indie stores typically are more liberal with their music selection, their dwindling traffic almost demands guaranteed sales with Top 40 artists. You may be able to crack a few indie stores, however you can't develop a career by nickeling a limited number of indie stores in order to carve a legitimate market. Gaining a sustainable career today means being extremely savvy in the market, innovative, and spreading out your album sales efforts. This includes both online sales and retail sales, however when it comes to retail sales it is best to focus on the non-traditional market. The non-traditional retail market simply refers to retail stores that don’t typically sell music. The non-traditional route can essentially kill two birds with one stone: first bird- you gain retail exposure, and two- you can potentially gain international exposure. Here are the ins and outs on making it happen.

1. First Build an Infrastructure

Bands typically try to enter the marketplace with a “we’re here and our album is done” type attitude. For the most part nobody gives a sh*t, as there are hundreds of thousands of “you” out there. To gain legitimacy you need an infrastructure. When you eventually partner with a retailer they want to know they’re not starting from scratch. Seeing benefit in an unknown band is unlikely. There is more risk involved, more energy and effort to take a band with zero album sales and benefit a business or retailer. Now if there is 500 sales, 1000, 2000+ plus there is something there to build on. The risk is lower, and energy can be expended on marketing/promoting the unique partnership as opposed to wasting energy on telling the world who you are. Further, infrastructure lets a retailer know you’re hardened, not scared to promote, and won’t rely on someone else to "sell” you. Hint- this is attractive to the business world!

2. Expand a Retailer's Market Don’t Just Enhance it.

Non-traditional retailers know who their market is, as should bands. If the two groups share the same market it is unlikely a store will be attracted to a partnership as the band simply enhances their store. Stores are looking for expansion- help in capturing a new market while keeping their image in tact. For example: Chain store A who has 100 skateboard shop locations, attracts customers ages 13-18 who are punk rock listeners. The store is looking to expand into 20 new cities but wants to sustain customers for a longer period of time, 13-30. It isn’t in store A’s best interest to partner with a band that already shares these same market demographics as the partnership would only enhance the stores image. Store A stands to benefit by teaming with musicians that appeal to ages 19-30 in order to expand their brand. More than likely this will no longer be punk rock listeners, so Store A needs to capture a band who expands them into a 19-30 listener demographic. When it comes time to meet with non-traditional retailers it is important to focus on what you can do to “expand” their market. This isn't difficult, rather takes some business detail in updating your bands market analysis and researching beforehand a target non-traditional retailers current market.

3. Think Global

More times then not, the best landscape for non-traditional expansion isn’t in your backyard. Global markets often benefit from global talent because it’s something new, edgy, and exotic that captures their local customers. As more brands are reaching far beyond their domestic boundaries, companies are looking for unique partnerships to help with this expansion. Further international talent can essentially be free because of the mutual benefit. Bands should be happy to potentially capture a new market without spending marketing dollars. Front-end money isn’t the motivating factor, rather sustainable album sales over time. The same applies to the non-traditional store. If the partnership doesn’t prove to benefit either party (1) there’s no love lost, (2) there’s no real money damage, and (3) there’s no social damage to the band because nobody in that particular market knew who you were in the first place. If you don’t have international business knowledge, nor know which stores to partner with, no worries. Non traditional retailer partnerships have advertising companies drooling. Identify the major players in advertising within your desired country, unleash your ideas, and they will be chomping at the bit to pick up a new account.

The Next Big Music Markets

The world is changing, the industry is changing, and the music giants of today will no longer be industry titans tomorrow. In the last five years there has been an explosion of emerging artists popping up from the most unlikely of places. At one point 25% of the musicians on the American Billboard Top 100 music chart weren’t American born, which clearly reflects a huge shift that the music marketplace once controlled by the United States is no longer. The United Kingdom and Latin American countries have exploded onto the scene, and in many cases/genres are controlling the American market. As these countries continue to strengthen, there are several countries that are quickly approaching the same status.

Musicians, both domestic and international, scramble to new venues around the globe to capture their piece of an audience, however it’s important to realize there’s a specific rhyme and reason to global expansion. Some countries are on the up and up with their music industry, while others are only perceived to be successful. It is important to have a plan, a plan that incorporates industry statistics, buying trends, music festivals, intellectual property law, emerging artists, genres, and demographics. Most people don’t take the time to evaluate these aspects. Lucky for you I do. Stay ahead of the game, and if you’re looking to expand your career, label, or market to international areas, there are two countries that will blindside the global market in upcoming years. Please meet: Australia and South Africa. Stay ahead of the curve and learn where/why/and how to capture these markets immediately.

WHERE: Australia
WHY: Industry scholars are already aware that Australia is the ideal music market unfortunately musicians do not. If you monitor the Australian Billboard music charts you’ll notice an eclectic mix of musicians from around the globe. Even though a majority are American A-listers, if you dig a bit deeper you’ll notice Australian acts cluttered throughout. Australian musicians may not be the in the global mainstream yet, but they will be. The musicians are unique, they have their own style, and because everything is recorded in English, the likelihood American labels will begin cherry picking Australian talent is inevitable. If you incorporate Australia’s rising tourism numbers coupled with the countries low piracy rate, talented musicians, new genres, and solid buying market, their music industry expansion is a no brainer.
HOW TO CAPITALIZE: North American musicians will have a difficult time expanding their careers into the Australian market from a touring standpoint simply because of the economics. Traveling to Australia for a tour, shipping product, or jetting over for promotion is unreasonable from a money perspective, however getting radio airplay isn’t. There is a hug radio market in Australia, and because English speaking musicians (more so North American musicians) are already popular in the area, there is an existing demand for good product. As nice as an Australian tour may be, focus on getting radio exposure first, as it will be your best shot to slowly build a fan base. For European artists the opposite is true. Traveling to Australia is reasonable, and with Australia’s strengthening music festival season, getting some face time with fans will prove beneficial. As for focusing on radio efforts, wait until you establish a fan base by touring first, as the chances you’ll trump a North American or Australian band for radio time is unlikely.

WHERE: South Africa
WHY: The African music market in general is booming. Matter of fact, the entire continent is becoming a self sustained, self contained entertainment ecosystem. For the same reasons as above, the explosion of new/unique genres, steady tourism numbers, musicians, festival, language and buying trends in South Africa make it ideal. Even though the American music market is still the controlling industry force around the globe, major labels will adapt to global change very carefully. Careful for U.S. majors mean signing English speaking artists who have sexy/exotic/international appeal, but not TOO sexy and exotic. Tracking down European acts still proves financially risky for American labels, however South Africa fits the bill. The country adds extra incentive because of international trading routes, laws, and market potential that make the country attractive. If you’re thinking there are many other countries that the U.S. has great trading relationships with that would also fit the bill, you’re right -so why South Africa? The South African music market is gaining a closer relationship with the Nigerian movie industry, which essentially means licensing deals, added global exposure, cross promotions, and a huge revenue stream. The Nigerian film industry (ie: Nollywood) produced a 2.3 billion dollar industry in 2008, and is still rising. Believe it or not, Nollywood ranks #2 in the world in terms of films produced each year, ahead of the United States and behind India. Combine a possible Nollywood relationship, South Africans sense of community development with its artists, and rise of popularity for Nollywood films in Johannesburg and Cape Town, not to mention the 2010 World Cup in which the countries artists will be exposed to the world, and you’ve got a potential recipe for success.
HOW TO CAPITALIZE: Without sounding totally repetitive, the same steps that apply in Australia also apply to South Africa. North American artists should focus all efforts on radio, while European artist build a fanbase by touring.

RUNNER UP: The Netherlands
WHY: Quickly speaking, The Netherlands is packed with unique musicians. The country is a nice central European hub especially from a touring standpoint. However the strongest asset of The Netherlands is the fact piracy isn’t as widespread as it is in other European countries. Matter of fact the annual report put out by the International Intellectual Property Alliance, which monitors widespread piracy in each individual country, doesn’t even categorize The Netherlands as a “potential threat.” The likely emerging European markets of Italy, Sweden, Germany, and France, along with a majority of the Asian countries plagued the IIPA’s “piracy watch list” (ie: not good) which makes the likelihood their music markets will explode into the global mainstream rather difficult.

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