The Week on the fall of the music industry
What are [artists] doing instead [of signing with big labels]?This quote is sad:
They’re cutting out the middleman—the record companies—and taking their work directly to customers. It started a few years ago, when such artists as feminist folkie Ani DiFranco began handling their own recording and distribution. Now, a handful of superstars have also decided they can live without a major label. Madonna just left Warner Music, her label for 25 years, to sign a $120 million deal with concert promoter Live Nation, which will oversee everything from record distribution and live performances to merchandise sales. For their most recent albums, Paul McCartney and Joni Mitchell turned over their distribution to a distinctly nontraditional player in the music biz: Starbuck’s. “It’s a new world now,” McCartney explained. “People are thinking of new ways to reach the people.”How is the industry responding?
Not very effectively so far. The industry seems to have devoted most of its energy to largely futile efforts to prevent illegal downloading. It can claim some legal victories, most recently in October, when an industry association successfully sued Jammie Thomas, a 30-year-old single mother in Minnesota, for downloading 24 songs. She was ordered to pay damages of $220,000—or $9,250 per song. But while it’s understandable that an industry would want to crack down on people stealing its product, the notion of big companies hunting and suing single moms and students has been a public-relations disaster. Besides, as one music executive told the Los Angeles Times, piracy is impossible to stop. “You can’t stomp it out. People are going to get it one way or another.”
Ringtones, in fact, are now the fastest-growing source of music-industry revenue. “I find myself, when I’m signing a record deal now, asking, ‘Can this sell as a ringtone?’” said Steve Rifkind, president of SRC, a label affiliated with Universal.
Is that the record industry's idea of forward thinking? Link
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I have been reading new music strategies blog recently, very interesting stuff as the author encounters the many clueless music-business types.
for example, at a conference:
What really threw the music industry people was not that these girls were downloading music ‘illegally’ — but that it was of so little value to them, that once they tired of a song, it was entirely removed from their digital media and their lives.
well worth reading
http://newmusicstrategies.com/2007/11/03/hooray-for-the-music-biz/
So the big stars are leaving record labels for Starbucks and Livenation. Is this progress?
i think what illegal downloading has helped create is a notion of disposable music. if you spend money on it, you're not likely to throw it out after tiring of it, however if it's "free" then you don't care.
Their fastest-growing source of revenue is based on a fundamentally anti-consumer premise that is practically guaranteed to disappear within the next ten years? I mean, come on...just how long can it possibly be before some major anti-trust lawsuit resulting in the blanket removal of consumer lock-out controls from these devices works its way through the courts?
A consumer ought to be able to put any legally obtained media on their phone that they want. The idea that you have to pay extra just to convert some audio that you already have a legal license for to a ringtone is absurd (only slightly less absurd than that so many consumers fall for that racket). Eventually consumer rights will be reasserted, and then where will the labels be? Their fastest-growing revenue source will evaporate, finishing them off.
snippit 1- "As recently as 1999, the recorded-music business was booming, with revenues totaling $14.6 billion"
snippit 2- "By 2006, U.S. revenues had plummeted to $11.5 billion"
snippit 3- "One study found that consumers downloaded 50 billion songs in 2006, most of them illegally—costing the industry $12.5 billion in lost revenue."
Going by snippit 1 and 2 which at least sound realistic, snippit 3 is off by around $9.4 Billion.
I'm led to believe this "one study" should actually read, "stuff we pulled from our ass"
Time to clue in folks-- these so-called "artists" who release one album a year are in it for money only. Seriously, anyone with a reasonable drive to create will be doing more than that, and have found dozens of interesting ways of connecting, etc... especially when you have financial resources like Madonna or McCartney.
They're corporate through and through, and probably disinterested in the collapse of the music biz beyond their paycheck. Moving to Livenation, etc isn't some sort of revolution, it's just mildly better for business than sticking with the most obvious dinosaurs.
I could write a dissertation on the idea of music's "disposable-ness" in the modern era, but I need to get back to work...
So, to make it [somewhat] quick: I think a lot of people miss the fact that we're bombarded with "music" in one form or another almost constantly. TV shows, advertising, the radio in our car, background music in restaurants and businesses, etc. And, with iPods and the like, we can surround/drown ourselves in music 24/7, should we desire.
(full, ironic disclosure: I type this as Pandora Radio blasts This Heat's "Repeat" into my cranium)
So, for those who don't obsess over the "art" side of music (like I do, and I'm definitely in the minority), it's little more than a piece of clothing or cheap furniture - an accessory that one may or may not notice. You have to at least sit in place and pay attention for a movie, or to play a video game (both industries, of course, dwarf the music industry in sales terms), but you can be showered with music every waking second and barely notice.
Of course, it doesn't help that by choosing venues such as MTV (which rarely presents music in any non-truncated or non-background form), ringtones, and the focus-group bland mush on commercial FM radio, the music folks have marketed themselves into a corner. But that's all an argument for another time...
thankfully, some people are starting to understand the issue:
http://internetbestsecrets.blogspot.com/2007/11/judge-with-good-judgment-at-last-music.html
As long as people don't donwload songs for profit - it's not illegal (at least in Spain).
Added to the fact that a recent report showed that music "downloaders" actually buy more CDs than the rest, I hope they stop pitching this non-sense idea that this is the real issue.
In ringtones, the record companies are moving to another semi-captive audience. It takes a few more steps to pirate one of those - perhaps just enough to force people to pay for them.
As discussed elsewhere (see: internet), the record companies are largely reaping what they have sown these many years. Until fairly recently in the history of the music biz, it was at most impossible, and the very least impractical to actually know what you were buying before you bought it. And typically (I am saying typical of the normal music consumer), you were paying for an album, but only listening to a single. If there are any losses record companies are incurring as the result of downloads, they are those songs or albums that the consumer, now with an informed choice, are no longer buying. They are no longer buying what they didn't want, but had to, before they knew they didn't want it. I am 54% sure that last sentence made any sense.
I think the record companies will live on in the form of licensing companies for movies, commercials, ringtones, etc. The music business however -and we have to include artists here- is alive and well, just evolving.
"They’re cutting out the middleman—the record companies—and taking their work directly to customers. It started a few years ago, when such artists as feminist folkie Ani DiFranco began handling their own recording and distribution."
woah, woah, woah! this statement highly offends me as a punk rocker! hell, even artists in the 50's sold 45 rpm singles out of the trunks of their cars.
The only thing that ever hurt the music industry wasn't mp3 and piracy. It's the "music" they are trying to sell - pretty boys and girls dancing prettily singing pretty tunes.
Casting bands with no real talent whatsoever. That's not music. That's just boring and in my opinion (not humble) it's absolutely okay to delete it after some time. Todays music is the acoustic equivalent of popcorn - nice and sweet but soon forgotten.
I'm so sick of this constant whining of the music (and movie) industry - if you're product sucks, you're not going to sell it.
Sometimes, it's just that simple.
This thread is totally refreshing, it seems that for the most part people are becoming a lot more educated about this stuff.
The commoditization of music is like trying to make a science out of a dionysian art...I spent 3 semesters in music business studies realizing that i was only there because i am a musician (and had to change my major immediately), and let me tell you, it was the most insulting expreience of my life to learn about how the 'industry people' view and treat the artists...
in my opinion all the people industry complaining about lost revenues should accept their complete lack of talent and stop leeching off the creations of others.
For me, the total value of music is about $800, which was the cost of the six 1-TB hard drives I filled up (over a couple of months, mostly via sneakernet), just on the off chance that the Harper government made audio sharing illegal. So Now I'm set for life (at least, for anything that's on the market right now.)
Basing an industry on the whims of 14-year-olds? Yikes!!!
I like having a nicely packaged, professionally manufactured CD or LP, in fact, I prefer it. I get nervous when the only copy I have of something is on a $100 hard drive or a CD-R that may or may not last very long... music that I love isn't disposable to me. So much for downloading. MP3's are great for listening to, but I prefer to have a full-fidelity, uncompressed copy of something for my hard earned $$$. And DRM-crippled tunes? No thanks, no sale.
But what do I know? I am just another consumer, right?
It's gotten damned expensive to buy CDs retail, and it's especially galling when I know how little of the proceeds actually go to the artist. This factor alone has really dampened my enthusiasm as a customer... the way that artists have been royally screwed by big record labels over the years really pisses me off, and I don't care to feed the beast.
The comment about people tired of getting burned on CD purchases after finding too many crap tracks too many times is spot on. For $10 a disc, I'll take a chance, but for $18 or more per disc, it's just too risky. I've got bills to pay.
Do you want to support an artist? Buy their CDs and other merch direct, at their shows or through their own website or merch portal! I know this isn't available as an option for everyone, but it is a good start. And if your pals want a copy, tell them to go buy one from the artist, too!
DIY, baby.
st v
"Basing an industry on the whims of 14-year-olds? Yikes!!!"
Well, it probably made sense when they represented the dominant music consumers, but now it's biting the music executives on the rear sides of their anatomies. And it's why ringtone revenues are growing so fast, as teenagers are the primary consumers of them.
This after all was the demographic that had their purchasing decisions made by MTV, allowing surface appeal to flourish at the expense of talent (not saying the two are incompatible, but think of how many performers out there have the former and not the latter).
Now teens are looking at youtube and myspace (if they're even on myspace any more ;) for the same, and listening to the same 40 songs rotated through mass media a lot less, meaning no more multiplatinum singles. (The monolithic ideal of 'the mass media' has been fracturing considerably over the last few decades anyway, something that the success of MTV ironically was an early indicator of.) All in all, it means the companies that based their business models on teens making purchasing decisions heavily influenced by mass media are now getting hosed.
That doesn't mean that they can't point fingers though. And as we're seeing over and over these days, it's much easier to point them at nebulous bogeymen than the poor decisions made by you or your peers.
@#5: The $12.5b in lost revenue likely comes from making some assumptions in a calculation like this: 50 billion songs downloaded * $.75 wholesale per song * 1/3 of pirate downloads would have been purchases = $12.5b lost by the music industry to piracy
The last assumption is to my mind astronomically high, and the numbers you point out make that even more obvious. I would assume a number more along the lines of 1/10 to 1/20, if even that much. The number of songs downloaded is possibly also an estimate based on specious or incomplete data.
Finally, all the focus on the numbers of big music ignores the other entertainment content producers/distributors, one of which in particular (gaming) is exploding. Entertainment budgets are pretty much a zero-sum game, all the money for it comes out of the same pot. The better Halo 3 does, the worse Jay-Z will do.
Forget CDs and MP3s, if your band doesn't have music to download to Guitar Hero or the new Rock Band game you are a nobody. I was in Best Buy the other day and there was a crowd of 25 people standing around a couple of teenage kids playing the Rock Band game to Black Sabbath's "Paranoid" on a big plasma T.V. they had set up. I'll be surprised if this phenomenon doesn't lead to a whole generation of great new musicians. Trying to play along makes the music more interesting as well as being a lot more interactive than just staring at an $18.99 CD liner or album cover.
“I find myself, when I’m signing a record deal now, asking, ‘Can this sell as a ringtone?’”
It's been mentioned above, but I have to repeat it - with this quote, Steve Rifkind has inadvertantly encapsulated everything that's killing the music industry.
They're not interested in songs and soundscapes, just music that can work when sold in 20 second chunks. they're not interested in consumer value, but rather want to resell songs in artificially repackaged pieces, at a premium of course.
That's why the major labels are on a downward slide. In previous eras, the bands (e.g. The Beatles) that had been missed by the majors still ultimately had to sign deals with the majors at some point. Nowadays, that's not the case. New bands are becoming successful without necessarily needing to access the majors' resources while increasing number of established bands are refusing to re-sign.
The majors are killing themselves with a dependence on marketing the new fad. Ringtones won't be a lucrative business in 5 years, especially if that sector is forced down the non-DRM route like other downloads are today. Acts like The Beatles, Led Zep, Nirvana and The Prodigy are still selling 10 / 20 / 30 / 40 year old albums, while the majors are concentrating on pushing the new 10 minute pop star. They demand attention for Britney's newest public meltdown, yet (in the UK at least, where I'm from), the #1 album is by the f*ing Eagles, for God's sake and #4 is Robert Plant!Are they really selling Plant ringtones?
Their business model is self destructing, and all they can think of is "how do I sell this to the same people in 5 different formats" and blame piracy for their mistakes. unless they change, the majors are history, and I for one say good riddance. Good music will prevail, these idiots won't.
What makes me irritated is the assumption that a download equals a lost sale in each and every case. Many people who download tracks without paying wouldn't have otherwise bought them. It's not like, if you remove the free downloading option, they will buy music at the same rate. Never underestimate the allure of getting something for nothing. I don't doubt there is some effect, but it's not as large as the record companies whine about.
Free Voicemail, if that were true, people would adore the music on their overpriced CDs. They don't. You're trying to make a point where none exists.
Dave X, in a musical economy of abundance, the last thing we need is musicians putting out more albums than they have music to fill. Pointless music that doesn't command the listener's attention has no value. A really good album can maintain its value for decades.
Ringmod76: Sure, modern tafelmusik. We just pretend it's something else.
Flickersticks, say more. How does the industry view consumers?
Musicpsych, downloading is their big excuse. The more lost income they can blame on downloading, the less there is to be blamed on their bad decisions. The wonder is that their overestimates aren't any higher.