When news broke in April that Echomusic of Nashville (popularly known as echo) was being closed by parent company Ticketmaster Entertainment, it was reported (all too briefly) as a story of some 60 lost jobs on Music Row. What hasn’t been reported is that early next week, on June 15-18, between 100 and 200 echo clients – most of them small or mid-level, independent or indie-label bands and artists – will see their websites go dark with no refunds and no ability to transfer their sites seamlessly to another host.
The echo platform, touted by the company for years as a unique integration of web site, e-mail list, merchandise sales and fan connection tools, was built on an architecture so proprietary and one-of-a-kind that sites “powered by echo” must be re-built from scratch. This is according to current and former Echo employees, as well as artist managers who are currently scrambling to rescue their artists’ vital presence on the web.
“It’s shocking,” said the manager of a prominent Americana singer/songwriter who has at least a three-year relationship with Echo. “You’d think with all the years and money he’s put in they’d maybe go not the extra mile but just the extra half mile. . .We’re really being left with no options.”
Clients were formally notified in mid May that the sites would go dark on June 15-18, but managers and artists are reporting that web designers and hosts need 60-90 days at a minimum to code and launch sites. Some, like country singer Travis Tritt, have already posted placeholder “under construction” pages. Others are routing their domain name to a MySpace page. Echo employees have been working overtime to walk clients through a seven-step process that will put them in a position to re-build their websites elsewhere. Those clients are on their own for the unanticipated costs of the changeover, which run from a few thousand dollars up to $10,000 or more. Moreover, the investments clients made in their echo sites, which are regarded as among the more expensive in the local market, as well as their monthly maintenance and hosting fee (averaging $300/month but running up to $1,000/month), are said to be unrecoverable.
Why is this happening this way and happening now? Well that’s where this gets really interesting, because it actually has to do with one of the most far-reaching developments in the music business – a set of mega-transactions taking place far from Nashville.
Indirectly, it’s Irving Azoff’s doing. Briefly, Azoff, one of the most powerful and wealthy managers in the history of rock (the Eagles are among his clients), recently presided over the merger of his company Front Line Management Group with Ticketmaster. Simultaneously, Ticketmaster has announced plans to merge with Live Nation, the concert promoter formerly known as Clear Channel’s market-dominating SFX. In other words, Azoff is about to assume corporate control over the management of most of the biggest-grossing musicians in pop music, most of the venues in the U.S, and the titan of ticketing, the much loathed Ticketmaster. More HERE and HERE. And for those who haven’t been following Nashville music business news at all, echo was bought out by Ticketmaster in 2007 for a reported $25 million.
So to use a strained metaphor, echo, launched ten years ago as arguably Nashville’s most progressive digital music marketing company, became a flea on the back of a dog being eaten by a bigger dog. And a money-losing flea to boot. While Ticketmaster showed some patience in trying to let echo be echo from Nashville and find its way to profitability while growing rapidly, the new company, appears to have been in no mood to be nice to Music City or echo’s longstanding clients.
There are more specific injustices here worthy of investigation. Echo insiders knew for weeks that the shutdown of client websites was coming but were forbidden by higher-ups to disclose it until the 30-day warning in mid May. Numerous clients were also informed that a revised accounting of their fee schedule revealed sales tax that had not been disclosed on the front end. One artist manager said she was informed that unless she paid a previously unknown tax bill of $900, echo would not allow her access to her artist’s digital assets, e-mail lists or transition services, and she doesn’t appear to be alone.
Furthermore, it was hard not to notice that while echo the local start-up of the late 1990s was a refuge and service provider for many independent, non-star-trajectory artists, the echo of recent years (especially post Ticketmaster) focused on big-time clients like Rascal Flatts, Kanye West and Alicia Keys. In a triumph of inequity, some 20-30 of Echo’s largest clients are slated to remain in the echo system, managed from Los Angeles. Insiders say that it goes even deeper than that; when recent mega-clients signed on to echo, at least some had the $20-30,000 fees for their web design and setup waived in exchange for an ongoing share of revenue generated through ticket and merchandise sales. This arrangement, according to sources, was not afforded to mid-level clients, who paid cash up front.
The larger tragedy here is that just as a new generation of artists were challenging the dominion of a calcified record label system and its decades-long chokehold on career development, tour support, radio play and national album distribution, along comes another, unanticipated near-monopoly with vertical control over the most lucrative and influential parts of the music business – touring, ticketing and management. And then that company, through a few orders from on high, is able to dismantle a company that at one time carried many of Nashville’s hopes for a self-determined, locally-controlled digital music infrastructure.
There’s a precedent for this parable. In the late 1990s, Gaylord Entertainment, which had built The Nashville Network (TNN) from its origins into one of the most successful cable companies in America, sold the network to a company it knew and trusted. That was Westinghouse, a diversified corporation that had for years been TNN’s marketing partner. Little was to change, they agreed. TNN was still producing programming from Nashville, and Westinghouse was supposed to give the network access to new advertisers and larger amounts of capital to go to the next level. Then, abruptly, CBS bought Westinghouse and then Viacom bought CBS. And to Viacom, TNN was the flea on the dog. Voom, it was absorbed into Viacom’s MTV Networks and the entire Nashville production operation was shut down, throwing hundreds of TV people out of work. And TNN had its name and format changed twice in two years – first to The National Network, and then to Spike TV, as un-Nashville a network as exists today.
One wonders if this is Nashville’s fate – if its most successful entrepreneurs are inevitably destined to lose control. It’s enough to make one wonder how Music City will negotiate this new and unfathomable music business.
(This article represents original reporting by author Craig Havighurst and should be attributed to the String Theory Media blog.)