I had a surprisingly candid lunch conversation last week with a big music label executive, and a good part of our talk focused on the future of music. I asked the usual question: Why are you guys so damned clueless? Your business is disintegrating before your eyes, and all you do is go for short term cash gains (lawsuits, mafia-style collection rackets from venture backed music startups, etc.). The long term costs are horrendous – an entire generation or two of young music lovers feel no remorse at outright stealing music. Particularly since most online streaming is now free, it’s hard to understand why downloading or sharing songs should be a crime.
His response: It’s all part of a master plan. The labels fully understand that recorded music, streamed or downloaded, is going to be free in the future (we’ve argued this relentlessly). CD sales continue to decline by 20% per year, and the only thing that’ll stop that trend is when those sales reach zero. Nothing will replace those revenues.
They also understand that recorded music will largely be little more than marketing collateral, meaning that the Internet services being sued today for copyright infringement will be embraced in the future as ways to get the word out on hot new music. These services pay for the privilege today (either through high streaming rates or in court), but in the future they’ll be the ones getting paid by labels. Think radio payola at a whole new level, and there won’t be any more talk about social networks giving stock to labels and artists. Money will flow the other way, as it should.
By 2013 (maybe as early as 2011) it’ll make sense for the labels to finally reorganize their business models around the reality created by the Internet and person to person file sharing services. No longer will the labels be tied to revenue limited to sales of master recordings – by then most or all artists will be under 360 music contracts that give the labels a cut of virtually every revenue stream artists can tap into – fan sites, concerts, merchandise, endorsement deals, and everything else.
But until then, he says, the spreadsheets and financial models dictate that suing customers and partners just makes too much sense. Venture capitalists have directed hundreds of millions of dollars, via their litigation-mired startups, into the label coffers. To some extent those payments will continue, although the big payment days are likely over. Apple still sends a lot of money to the labels for paid downloads, and sites like MySpace Music, Imeem, Rhapsody and Last.fm pay big streaming dollars. Until CD sales really stagnate, all those revenue streams bring in more money than facing reality.
For most industries, embracing old revenue streams until they are completely petered out is a great way to open the door wide open to competitors with more innovative business models. But the Innovator’s Dilemma problem doesn’t necessarily apply to the music industry. The big labels have a lock on talent, and there’s no reason to believe that new artists won’t continue to strive to lock themselves in to one of them.
What this means for us music consumers – don’t expect much to change for the next few years. But sometime in the next decade we’ll see a real renaissance in how music is distributed and consumed. And who knows, a decade after that we may have all forgiven the music labels.
Soooo, by the picture are you saying Big Music are Nazis?
,Michael Martin
http://www.googleandblog.com/
are those nazis?
yes they are German troops, although they are not surrendering but rather breaking out into a rendition of “YMCA” by the village people.
It happen during the Seige of Bastone – look it up, its on Wikipedia.
heres the link:
http://xrl.us/bffo9
Mike,
I also had a sit down with some high level music executives in the past two weeks from EMI. To me, they are still obsessing over the idea that they will be able to bundle a music subscription fee into either your phone or cable bill. They were against the idea of music being entirely free.
well of course they’re against the idea of music being entirely free.
Jason — i heard the same thing from a music executive. something about devices like my ipod/tv/computer coming with music that a user pays for via a subscription . it didn’t make sense to me.
labels should focus on innovatively marketing and distributing. find a way to muscle indies off itunes homepage while selling me ringtones for my oven.
Nazis in this sense is an over generalization of the German Wehrmacht (army) who were not all Nazis per se, but had to make a personal oath of allegiance to Hitler (not Germany)
Ok, bit of a tangent, but yes this is an image of German soldiers surrendering in the closing days of WWII – if my History/Military Channel memory serves me right.
,Michael Martin
http://www.googleandblog.com/
well am happy you return to post , back to music for them it means money
This doesn’t make any sense. What’s stopping artists from just going solo and building their careers on internet radio play and music sharing, while retaining their own copyrights? Am I the only one that thinks the labels pimping the artists is bad for everyone? It just results in lots of crappy unfocused music and no-talent ‘artists’ being trotted out by corporations solely as marketing tools.
@tomg: *Comment of the Year*
I really don’t see why you call them nazis. Could you please explain?
The image of surrendering racist Nazis is appropriate in the context that it is well documented that in the early days of rock history African-American musicians were routinely underpaid and cheated out of their contracts by the recording industry execs. The “copyrights” of many original works by African-American musicians were signed over to record companies in significantly lower compensation relative to their white colleagues.
Sure, today record companies can claim they totally embrace African-American musicians, because they’ve come to realize that the latter have made huge contribution to their bottom line and indeed possibly are the only reason why the record companies continue to survive in this digital age.
Next time, when record companies tell you they “own” copyrights of music by rock legends like Nat King Cole, Chuck Berry, etc, you know how they “acquired” those rights.
Same answer to you, reactionary racist.
Of course, you’re forgetting that ALL artists were ripped-off since day 1. Don’t believe it? read “The Real Frank Zappa Book”….
Those are german soldiers.Doesn’t mean they were Nazis.
I never knew that Jewish was a race. I just figured they were megalomaniac misled murderous dudes who went on to build Volkswagens and typewriters and be modern and self-loathing.
DUH. get yer h8 on straight.
Man, are all Germans Nazis to you? Get off your collectivist mindset.
@Martin
Goodwin as spam tool? Why not just show us your tits?
I thought that only worked for Pink Floyd or REO Speedwagon…besides, I didn’t have a girlfriend who could show them.
Unbeleivable just how arrogant the major (soon to be minor) record labels are. They are already losing out on new talent finding new and innovative ways to bring their music to market. Expecting musicians to give them (the labels) a slice of all their action is verging on madness.
Like this: http://news.cne...0191324-93.html
REALLY interested in that one.
Have you seen this website? http://www.mybandstock.com . that makes so much more sense. Give artists the power to distribute ALL their content to bands, and allow the people who buy stock in them to exclusive videos, music, blogs, and other stuff.
i thought they were the beatles
Well done
/golf clap
True – True – True, Everything is a GO until the complete phase out after 2020.
Sucks that it should take so long, though. Why don’t one of the big guys start the trend early? Get one up on the competition?
Exactly! I don’t see why they have to sit back and wait. Taking a page out of the Nine Inch Nails/Monty Python playbook, by offering up some free content, could actually help increase sales or at the very least help bolster their reputation. I know I’d feel a lot better about a company who at least tries to innovate, than one who is content to wait until they are forced to change.
Interesting that they’re still dragging their feet.
I have a feeling though that they will not have that luxury of waiting. Sure, they have a lock on talent. But all you need is a new company like YouTube/MySpace Music that wants to become their own music label. These new companies have mastered the new distribution model, and I don’t understand why they allow themselves to be locked in.
Why don’t they try discounting before accepting that nobody will pay for downloaded music? Allofmp3 showed plenty of people will pay if the price is right.
10 cents a songs. I’d certainly buy lots of albums if they costed $1.5-$1.99, I already do that on amazon by buying used CDs.
I agree at $1.99 or 2.99 albums would sell like hotcakes; at that price some people wouldn’t even buy the $.99 or $.10 songs they would just pay for the albums because they perceive $1.99 as a cheap price and most spend that daily on different things such as bottled sodas and chips.
So…you’re saying I’m going to have to sell my body to get a ticket to a concert in 2-4 years?
What’s a kidney, man? It’s the new thing!
I personally think CD sales are dropping more because of the CD being an outdated media format, rather than publicity.
At least in NYC, enumerate the people around you everyday using Discmans vs using iPods, or other digital players.
The Digital format is just more convenient. If they don’t want to be part of the distribution mechanism, oh well… People are realizing you don’t need to buy a whole CD if you only like two songs. I think that plays more against them than piracy.
If you look at it from a numbers perspective, you have 135 million people using the internet every day, out of those, it’s really a tiny fraction of people that actually go through the pain of installing p2p applications, searching, downloading, organizing and burning music into CDs (or putting on their ipods). Let’s say you had what… 50million of those actually doing that.
50 million people is probably a small fraction of people compared to the global market of the music industry. Instead they should focus on making it easy for the other 120 million people to get their music conveniently, I guess that’s the opportunity Apple saw and why iTunes is successful.
The same goes to the movie industry. Create your own digital distribution networks and stop crying.
That’s the advice that the pirate bay has for them, create your own torrent site and make money on ads. They’d get plenty of decent advertisers paying them.
Another solution would be to create a “License to share”, you pay a fixed amount of money per year to the RIAA or MPAA, and you download and share to your heart’s contempt.
I think these major labels really need to focus on actually controlling the distribution of their music and where it is used.
Making a site and provide all your music for free is a great idea, and getting revenues from ads is the way forward. As shown by Google. Provide free services and then slap ads on them.
I also do think that people are willing to purchase tracks but of course at the right price.
>”you pay a fixed amount of money per year to the RIAA or MPAA, and you download and share to your heart’s contempt.”
“Contempt” is right. I see no reason to pay a tax to the RIAA/MPAA for the right to download and share music. First, it would unfairly pay them when I share music that did not come from them. Second, it keeps artists and small, non-member labels from seeking out new business models in order to compete with RIAA members. Third, we’re still not paying the artists directly — and the labels are only going to keep digging deeper with 360 deals and the like.
Hey, Could you please elaborate about paying the RIAA/MPAA to download and share please. Thanks.
“rather than publicity” -> “rather than piracy”
Very interesting. I think we all knew they were on their way out and there wasn’t room in the future of music for these industry dinosaurs, I didn’t realize they had a backup plan.
I’m curious to see how this pans out. Great article! Thanks for sharing.
Hmm sounds like they really are waiting for 100% of the artists to be under the 360 contracts first before proceeding to a new business model.
This seems unwise. If they wait 5 years, the patterns of discovering new music will change drastically and they’ll miss out on the power of momentum.
Today, YouTube & social networks are becoming great ways of discover new musicians. If this pattern continues to evolve to become habit, the role of labels will begin to shrink… and so will their ability to negotiate with artists.
It’s likely that there will always be packaged artists like Britney who don’t have a musical fanbase before the labels get a hold of them. They’ll likely be the bread & butter of labels but artists that come with a following of 100,000 subscribers on YouTube will expect different treatment/contracts.
Labels should consider developing partnerships in a way that allows them to add value to both, the distribution partners and the artists… beyond just managing rights and collecting money.
I think you have a point. Labels now need the artist more than the artist needing the label. This will continue to grow. This I think is mainly because Labels are trying to sign artists to crazy deals, when the artist can make more money by themselves.
I simply cant see the major labels sorting out their business models. If they do and music becomes 100% free then how will independent or unsigned artists make big bucks??
We’ll survive the way we always did, by playing music, and not necessarily as our sole source of income. I think it likely that most musicians now don’t even see the majors as being part of the real picture anymore. Back to being minstrels I say.
Exactly. I don’t even think about getting a “record deal” any more. I hired two promotion companies to get my CD out to radio, and although the airplay Im getting hasn’t translated to a lot of CD sales (no surprise there) I am working to turn that airplay into more and better gigs. That’s the model these days; the artist IS the label.
As you’ve pointed out, this requires the labels to have a monopoly on the best talent. And, there is already strong evidence that they no longer have a monopoly, and that their share is in decline. There are hundreds of reasonably well-known artists now who don’t do the majority of their distribution through labels or traditional channels. Radiohead is just the best known example of this.
The Innovator’s Dilemma certainly applies to the recording industry. They may still be in denial about it, and their strength may be such that they can effectively convince themselves that they’re on top of this paradigm change and will be kingmakers forever, the facts just don’t add up that way. At this point, I don’t think there is a happy ending possible for the majors. They’ve always been hostile to the artists (ask anybody who has a major label deal whether they would choose to deal with the label if they had another way to reach as many customers, the answer will always be an emphatic “no!”), and now they’re being hostile to partners, customers, and anybody else they can extract money from. Why would anyone want them in the loop when there are alternative models that don’t include them at all?
Everyone always brings up Radiohead and Nine Inch Nails as examples. You seem to forget that these bands largely became popular under labels.
There are not many artists who have gone from obscurity to popularity just through their efforts alone.
artists from obscurity to popularity…Lily Allen and Katie Thom…both through Myspace
Who both had, as I believe Major backing…
It’s never been about the “best” talent. It’s always been about the talent that has the most money. The majors know that no matter how many new Radioheads will pop up, if they throw loads of money on an inferior product like, say, Coldplay, they’ll still shift more units.
And yes, Radiohead did get to where they are backed by a major label.
As you pointed out, Radiohead made much more money when they were less experimental.
The argument so far has been that the labels can’t expect consumers to pay anything for listening to music. And I know that the labels are depicted as evils. But will the consumers ever pay for music once the labels are gone? Will they pay the artists when they self-promote their music?
I think that it’s a bit pretentious to claim the moral high ground when you’re taking someone else’s work for free, and wrap it with some ideology about the evil of labels.
great blog
Not enough salt, but yeah.
Pay to play is already returning to online radio. http://tinyurl.com/d6oy4z
The reversal of revenue streams between copyright owners and copyright users will complicate the decision-making process for artists who want to “recapture” the copyright to their musical compositions and sound recordings.
It is so very wrong for publishers and labels to have been given the opportunity to extract revenue from their signed artists and then, when it comes time for the artists to retrieve their copyrights (32 years after assigning them away), the business reality is that those artists will have to pay to have their music played.
If 360 contracts are what the RIAA labels are counting on to save them, they are even more doomed than we previously thought. Of all the independent labels and bands I’ve talked to, not one would ever think about signing a 360 deal. The services offered by labels are increasingly becoming commoditized, and it would be foolish for any artist to trade equity in their band for so little in return.
The big labels do NOT have a lock on talent.
I totally agree. More like a lock on creative freedom in my opinion and therefore a masking of some of an artists talent as a result.
I don’t understand this, If I’m an artist what incentive is there to sign with a record label if everything is moving over to the internet etc
Thanks
music is much more than the top 40. Think of the 12 year old recording his first performance…. The majors are only seeing the profit that comes out of music, and therefore constrict and control it. New methods of distribution are already breaking that monopoly. It’s time to see the whole picture. It’s time for the listeners to go straight to the creators. (or vice versa)
this is a load of crap.
no one would steal music if it was 10c for a non-drm song (1$ album). given that this is a pure digital format rather than physical CD that needs stores and distribution – music can make as much money as always.
also – those people that think the revenue will come from performances and commercials, clearly don’t understand the theory of the long tail.
Are you saying that you think 93% of the cost of a $15 CD is reproduction and distribution?
In Uk-currency speak, labels tend to sell their CDs to distributors for £4.50 – £5 a copy (if they’re lucky). About £1 – £1.50 of this goes to the artist via the label, £3 – £4 stays with the label (who normally pay for reproduction, marketing, yadda yadda yah). If the CD sells for e.g. £12.99, then 62% ish goes to the distributor and end supplier, 30% ish goes to the label, 8%ish goes to the artist. So yes, that is what he’s saying. Backwards, huh?
Doesn’t matter, the equation is get something vs get nothing.
And the broke people pay HOW–Paypal? eBay basically shut me out after 320+ purchases on money orders because I won’t blow off my bank account of 20 years like that. Forget fixing my vintage stereos quickly.
All you New World Orderers better stick to the drive-thru and get the junior bacon cheeseburger. Maybe we’ll have toilet-paper militias killing for Charmin someday. Never mind.
It’s D2. New Depression. bye
It just seems like once again they’re making the mistake of thinking that for the next 2-4 years, things will stay static…that the 360 deal is here to stay. That no NEW technology will be developed that isn’t already in existence. That innovation will continue to happen.
It almost makes you feel sorry for them, if it wasn’t such a great opportunity to be the new innovators.
Oops…make that “That innovation “won’t” continue to happen.” Not enough coffee yet today.
So Basically, this exec is saying that if we ALL stopped buying CDs right now… steal the music and donated money to the bands instead… Their business model will fail earlier… and they would stop litigation and get with the times???
I find hard to believe… the would probably sign up to get Bailed out by the Governments and blame the Crisis
If this means that concert and merchandise prices are going to go up, I am going to be pissed. I am already irritated at the rising cost of concerts and only once have I ever been willing to pay $30 for a t-shirt that ended up being way too small. I certainly wouldn’t pay $40 for one just so the RIAA can top off the fuel tank’s on its fleet of limos.
I wouldn’t believe anything from a big music exec., and the story above has huge holes in it: Big Music has made themselves into the universally hated enemy of young people who buy most music. How does that help them in 2011? And 360 contracts? Sounds like making even more enemies to me. It’s time for these hustlers to get out of the music business, and return it to the musicians, recording engineers, and patrons.
This paints a pretty grim picture for artists. The 360 deal is the most anti-artist invention in history!
Artists need to ditch the labels and keep their money.
The trouble is that (as youtube / myspace / etc have proved) it’s still the big bucks that get you the reach. You don’t think all of those ‘featured artists’ are selected on a purely talent basis, do you? Or if you do, you’re all very, very naive …
Of course every featured artist spot on any major website is payola! But that doesn’t take away from the fact that the 360 deals about as anit artist as it gets.
A major part of bands surviving the “artist development” stage has always been the money they made from tours and merch. Since only a tiny percentage of bands ever make a single penny on any cd sales, that touring and merch money has always been the only way a band made it from town to town.
Now if a band doesn’t hit it big on the first cd they will fail. The 360 deal kills any and all artist development.
By writing this article you are painting a big bullseye on yourself when it comes to the RIAA.
I am interested to see what Ethan Kaplan, VP of Technology for WBR has to say about this article? Micheal, can you ping him for his feedback and comments?
nothing is going to change unless we do something about it. there is no place for great bands to become huge and make a change in music. the industry is dominating the decisions on what makes it or not. and it is not a problem of artists dropping their record labels, as much as it is the fact that the record labels fall into this corporate hierarchy that is “the music industry”. when music becomes about music again, instead of about money. we will see the change. never has music changed, in every aspect, than it has in the last 10 years. we can’t blame technology. there is still someone, some human being running the show. whether or not you like actually going to the record store, looking at all the music and buying records or cd’s, you should still have to buy a full album online even if you only like 2 of the songs. the thing with that is, those two songs that you like because you heard them on tv or the radio, would probably end up not being the 2 you like the most anyways. all in all, if you only want 2 songs off of an album, then you don’t deserve to listen to it in the first place. plain and simple. remember people, majority rules and that is what the industry is feeding off of. which makes it hard for us dedicated, true fans of music to stand up and have a voice. it is my rage and my dying devotion to music that will push me to help make the change for music that it so desperately needs. this is my life now, but i can’t do it alone. so who’s with me!
Let me sum up the above comment.
1. “when music becomes about music again, instead of about money. we will see the change. ”
The music industry should be about music, not money.
2. “you should still have to buy a full album online even if you only like 2 of the songs.”
Unless you have picky tastes and only like 2 out of 10 songs on an album. In that situation, it’s not about the music but about the money, and you (picky listener) should be forced to buy the whole album.
3. “if you only want 2 songs off of an album, then you don’t deserve to listen to it in the first place.”
And if you don’t want to buy my whole album, dear picky listener, then you don’t deserve to listen to ANY music. Only us “true fans of music” deserve to listen to any music.
Bottom line:
Music should not be about money… nor the listener. It should be about the musician and “true fans” who like all music. Nothing is going to change unless we shut out those who only like 2 songs!!
…..
Idiot.
LOL!
Anyone who has anything to do with the music business knows that they run on 5 year business plans so this is just part of the current cycle while the next 5 year plan is being worked on .
The same could be said for other content industries like TV or even Movie studios ,
There has been more than enough technologies developed to help the music industry, but for the past 10 years they have continuously ignored the efforts of the development community and only chased Apple who only used them to sell iPods.
Today, there is nothing a record label can do that an artist/manager can’t do for themselves.
Indie music and Hollywood tech development is where the prosperity is, Hollywood who has a history of adapting new technologies without arrogance.
Big music exec with Universal, Sony, WBR, EMI?
Independent music makes more than 30%( This is a larger share than any of the “big labels”) of sales and is growing, more releases from independent labels/musicians than most of the majors combined.
When people stop buying CDs then the majors will change their ways(market forces). They are milking every last penny from the traditional model. You can’t really blame them. And there are still lots of people buy cds, enough to have them produced still.
Sounds to me like the majors are still damned clueless. Looking forward to seeing them go the way of the dinosaurs.
lol, I remember that music will be free article, its pretty ridiculous, I mean you compare the zero marginal cost to software, which begs the question why do people still pay for software?
merchandising and live shows will become more important, but royalties through subscription services and plain old selling though online stores will still be staple for the average band.
and how long will it take the labels to catch up? they already have, aka spotify
Digital delivery only deals with the physical manufacturing overhead in the business today. Licensing and royalties, particularly in juggling the realities of terrestrial vs online outlets, are mired in complications that don’t appear to be on a fast track to resolution.
Why 2011/2013?
My best guess is it has something to do with building out the infrastructure along with the ISPs to rollout tiered net services (aka “Bye, Bye Net Neutrality). God how I wish TPB bought Sealand.
Your headline is misleading. “Big Music” isn’t surrendering. It’s reorganizing. Corporations do it all the time. So much for the revolution, eh?
Not so Fast!!!! Today free music, use it as a marketing tool, and earn money on tours, bla, bla, bla,….., what will happen then to the movie industry when high broad band makes it equally easy to download a song or a movie???????????
My only source of surprise in this entire ‘candid interview’ is that the music industry are so stupid (slow, old, sluggish etc) that they can’t even back a single micro payment standard.
If I could save a small amount ($20) though PayPal or CC payment onto a browser integrated payment system and click a button to pay $0.10-$0.50 for a song as I download it (or better, pre-listen to 50% and pay for the rest) I would have no qualms about paying.
Amazing that an industry that is so heavily vested into trends and tech is so slow when it comes to such basic things as payment processing..
Well, they’ll learn I guess..
Ok, Here is my opinion on this topic.
First of all, the indies account for the most number of songs in the marketplace. At the rate we are going, its not going to be a matter of the majors suing online services why? well because technology is leading the way here.
I call BS on this one, are you telling me, in 2 short years, the RIAA will admit defeat? Not bloody likely. Come on Techcrunch, is this some sort of attempt to brush the whole Last.FM thing under the bridge? I doubt making these fantastic stories will let anyone forget about what happened there. Nuff said.
“The big labels have a lock on talent…” – But why would the next generation of artists sign a deal with a label that takes say 70% when they could sign a deal with Apple that takes 30%?
Back in the day labels offered value by having great A&R guys that loved music and invested in artists over the several albums it might take to establish them. Nowadays A&R has been replaced by MySpace or Twitter; recording requires only a computer and sequencer software; and distribution is either free on the internet or inexpensive via Apple, etc. What are the labels offering anymore that can’t be done (better? certainly cheaper) elsewhere?
The answer is simple: as you say, recording requires only a computer. This means that ‘anyone’ can do it. Therefor, the problem of getting noticed and standing out from the crowd is still there. Therefor, nothing has actually changed. The labels are still very good at one thing: Marketing. And Marketing costs alot of money. And labels have money.
Right, the music execs have a well-crafted, insightful, long-term plan…..And Ford, GM, & Chrysler actually have warehouses full of really reliable, cool looking, well-priced cars. They have just been sitting on them intentionally to make their books look horrible so they can get all this government cash…
If the Ticketmaster/Live Nation merger goes through, there will be one giant “music label” in two years. Indie artists will be forced to play in the street and even then Ticket Nation will call them “pirates” and sue them because people are not paying a 10x “convenience” surcharge to Ticket Nation to listen to the live music…
Partly spam, partly illustrative.
See how a major label removed my mega viral music video for one of their artists from YouTube:
http://ask.pud....ar-music-video/
You know I do love the convenience of downloading music just like any other person, but as a musician there is still one thing that nag’s me about MP3’s and that is the quality is worse than CD’s!!
During the years, the various formats (Tape, Vinyl, CD, etc) have all developed out of a need for either convenience, better sound quality or both. With MP3 we have taken a step backwards in quality but a leap in convenience.
Maybe one day someone will create a better format than MP3 so we can get back to better quality sounds. Until then lets enjoy how the codecs sound through a good home stereo system.
There are many formats available. FLAC [Free Lossless Audio Codec] is the purist and an audiophiles dream.
Has anyone mentioned The Boxer Rebellion’s success story here? Their example is such a sign of the times, I have been following it with great interest. Still unsigned, yet they’re selling out venues across the UK, Europe and, now, the US after iTunes liked them and decided to promote the album globally on their homepages. http://www.mysp...eboxerrebellion
The idea that although the major labels are going to lose their core business that made them so dominant (CD distribution and sales) while simultaneously tricking artists who can now record their own professionally mixed music at rapidly falling rates into giving them a cut of all revenue streams, including concerts, is beyond insane.
I agree. Once CD sales dry up completely in the next 5 years the record labels will be completely out of business. Basically the only reason they still are able to sign artists at rediculously low contract rates is because of their ability to advertise for said artists (ie: “you sign w/ us and we’ll get you on the next disney movie soundtrack” or ” you’ll get radio play if you sign w/ us”)
Basically the recording industry is going to slowly turn into a gigantic extortion racket…well more than it already is.
By 2030 net-labels and micro studios will have the same production capacity as any current mega-studio. Technology has phased them out and they’re just grasping at straws until the final boot drops.
“By 2030 net-labels and micro studios will have the same production capacity as any current mega-studio.”
Where have you been? Digidesign with ProTools accomplished this with the release of the Digi001 back in 2001.
Actually the Digi001 came out last century! I got one in 1999.
But their “core business” has never been distribution and sales. Their “core business” has always been promotion and marketing. And that’s not going to change.
“But sometime in the next decade we’ll see a real renaissance in how music is distributed and consumed.”
Umm, havent we already seen a dramatic shift in the way music is distributed (p2p or itunes) and consumed (physical-less media aka the ipod)?
What else should we wait for? It doesnt matter to the end user how the music is created; they only care about acquisition and consumption; which we’ve already seen change dramatically.
SMALL MUSIC. It’s time to stop worrying about what Big Music is going to do because the public has spoken and said they are no longer interested in supporting anything Big Music has made possible since the ability to record music came into existence.
So, it’s time to think small.
Forget about super stars and the mega concerts – they will be relegated to the past. Woodstock .. never happen again.
Ancillary industries based on the drawing power of major artists -including YouTube, MySpace – radio, TV will find their audiences for music waning and will commit fewer resources to its presentation.
Those considering the creation of music as a way to make a living – will opt to devote their lives to other endeavors.
While, in fact, while we actually might have more choices in music … most of those choices will be provided by amateurs; and, as Big Music stops funding the creation of music we’ll find the available pool of music bigger and bigger and less and less enticing and interesting.
Once Big Music stops focusing the public’s attention on artists through their marketing efforts, the music that will be left will be set adrift to find its on level in a global ocean of music – some of which might find small online groups of people spread across the world, who, because the market will be so deluted, will have little or no impact on the development of artist’s careers.
Technology has made all this possible, and we’ve voted in the way we download music that this is what we want.
So, great. Think small. For those of you who remember what music meant to you in the past… you’re good ’til Alzheimers sets in. For those of you who’ve never lived the great musical adventure of yesteryear … what do you know and why do you care.
It’s your world, kids, you’ll never know the difference.
So come on everybody… let’s get small.
Big Music and its commodities, Rock Stars and Pop Stars, are bygones of the Age of Control.
A Rock Star is actually a very fascist concept. These people are the Mussolinis of music.
This era couldn’t end any faster.
what lol how is a rock star a fascist concept? what are you talking about
I can hardly believe this comes from a ‘big music label executive’ as you might assume that a executive has a reasonable level of intelligence instead of being a retard.
What this executive essentially is saying is, we know that we aren’t operating on the optimal level yet (better yet: a declining level), but instead of improving and working our ass off to save the future, let’s play dumb and NOT innovate, unless the market forces us to.
Imagine a big oil company say that they make enough money already (lesson 1 in business economics: you never make enough money). Let’s sit back and do nothing until the oil reserves run out and then we will take a look what to do else.
You probably see where I’m getting at… (I hope so, for your sake).
Economics 101 for big label music executives: at the moment you realize that you’ll run behind, you’re essentially to late already and so you’ve got to get your act together and do the best you can to close that gap.
Also, I do not get that whole intimidate-our-future-partners-first-because-we-need-to-rely-on-them-in-the-future thing.
The big labels have a lock on talent, and there’s no reason to believe that new artists won’t continue to strive to lock themselves in to one of them.
Actually, there’s every reason to believe that artists won’t lock themselves in. The purpose of the major labels is to provide two things: distribution and publicity. The Internet has already supplanted physical distribution, resulting in decentralization of music listening – who listens to Top 40 radio anymore? So no matter how much the majors jump up and down yelling, they’ll never be able to ‘push’ bands the way they could before music listening became so splintered.
If major labels no longer have anything to offer them, why would artists sign on? They can either make a go of it themselves (like Jonathan Coulton) or they can work with an indie label who actually understands the dynamics of the digital world, and who won’t be ripping them off with an outdated model of music sales.
Social media, playlist platforms and streaming makes the role of a label less important. Artists can even be discovered in new ways. I read that Ross Robinson discovered an upcoming act, Repeater, this way.
I’ll be interested in seeing how this project sounds and plays out for him.
I checked them out from one of these forums, and I wish there were more press on Repeater.. it’s better than a lot of stuff coming out right now, and I want their new business model to succeed so more people can hear them…!
So ,
In short the future “role” of record labels according to this article will be having the hyper effective resources, connections and infrastructure to plaster artists music and faces all over the internet in a manner that cuts through the zillions of myspace profiles…. and in return for this privilege artist are expected to give the “label” a cut of everything they make.
If this was coupled with a social & class order of “artists development” , real-world interaction, education and structure it would be pretty cool – in effect an artists development school that just happened to CALL itself a “record label”.
But I have a feeling it will have about as much “structure” and “class” as the world depicted in the film “idiocracy”
There are a couple of roles that labels, as well as radio stations so to speak, play and that includes being taste-makers in essence filtering through the endless amounts of garbage created. The diamond in the rough is quite the money making opportunity. The large labels find themselves in a bind where sales decrease and competition increases. But there are incredible opportunities.
We are working with smaller labels on iPhone applications and new packaging products. Our platform just so happened to work well with the business model, and although we have only been selling locally in Chicago for several weeks, we have picked up three labels already. The small labels will bring the innovation.
JMA, one of the country’s largest music marketing agencies, is upstairs, and they are interested in means to approach the required demographics. So, people are working on different models. As an aside, one of my clients, a label owner, gave a talk to grad business students and out of 30-some people, nobody had ever purchased a CD, although there were four people who purchase vinyl.