August 11, 2013

The Pete Kilpatrick Band: A sound business plan

Thanks to advances in technology, making it in the music business nowadays is easier for everyone – and, just maybe, harder than ever.

By Ray Routhier rrouthier@pressherald.com
Staff Writer

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The Pete Kilpatrick Band plays to a packed house at The Big Easy recently in Portland.

Photos by Gabe Souza/Staff Photographer

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Bandmates Matt Cosby and Pete Kilpatrick lug equipment into the Market Street venue before the show. These days, musicians often struggle to be heard above all the competition.

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Instead, they are looking for bands that have already developed their own fan bases and proven that they can sell music on their own.

"Technology has created all these tools that bands can use to make and distribute music, so from that standpoint, technology has democratized the creation of content. The potential for bands to get their music out to the public is so much greater than the days when they had to pay for recording studio time and pay to print up fliers to send out to fans," said Mike McGuire, a music industry analyst for Gartner Inc., a worldwide technology research and consulting company.

"But it's not enough to just put out good art and perform it. You've got to create an experience for fans, you've still got to get your work in front of tastemakers and find a way to rise above all the noise."

The "democratization" of music production means it's just as likely for a band from Maine to build a fan base on its own as it is for a band from traditional music meccas like Los Angeles or New York, McGuire said.

While record labels are still important in getting music played on the radio or on store shelves, their diminished profits mean they have less to offer bands, and want more from the bands they sign.

"As we've seen the unbundling of music -- people buying songs instead of albums -- the economics have changed drastically. So now if a record label signs someone, they often want a (financial) piece of everything -- marketing, merchandising -- since there isn't as much money in selling music for them," said McGuire.

The rap duo Macklemore and Ryan Lewis rose to the top of the Billboard singles charts this year ("Can't Hold Us" hit No. 1 in the spring) without major support from a record label. The group built a fan base, sold albums on its own, and made enough money touring to hire Alternative Distribution Alliance, a division of Warner Music Group, to get its latest album into stores.

The recording industry's total revenue was about $16.5 billion last year, down drastically from $38 billion in 1999, according to figures from the International Federation of the Phonographic Industry. Compounding the music industry's troubles, record labels have been slow to adapt to changes in technology and consumer preference.

Statistics from the Recording Industry Association of America show that as recently as 2009, the record industry was making about 70 percent of its revenue from full-length albums, compared to 90 percent less than 10 years earlier.

But the same set of numbers show that by 2009 in the U.S., the industry was selling only about one album per person -- per year. Even though people are buying fewer albums, record companies still rely on them for the bulk of their income.

So while musicians once dreamed of signing a deal with a major record label, dramatic changes in the music industry have forced musicians to adjust their dreams, and their definition of "making it big."

HAVING A DREAM, FINDING REALITY

Kilpatrick moved to York from Massachusetts when he was in the eighth grade. Up to that point, he had been heavily into sports, but his new friends in York were passionate about music -- and they were good. He soon joined in their passion.

His friends formed a classic rock band called Jeremiah Freed. Within just a year or two out of high school, the band got signed to Universal Records in 2001 in a deal worth about $500,000 in equipment and recording time. After recording an album, the young musicians got in their van and took to the road to promote it.

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