Wherever artists, business, and paying for music are discussed, music labels are an easy target for the vitriol. Everyone has an opinion. The word ‘dinosaur’ gets used a lot, as in: “It’s like watching a bunch of dinosaurs asking the small, fast-moving mammals around their feet to knit them sweaters for the coming Ice Age.”
It’s easy to see why when Doug Morris, the 68-year old CEO of Universal Music complains that there’s “sympathy for the customer” who wants music like “Coca-Cola coming through the faucet in your kitchen”.
The music industry is desperately trying to maintain the high profits of the past. “Everyone is going vertical,” says American tech entrepreneur Bruce Warila. “Artists becoming labels; concert operators signing artists; labels buying venues; managers becoming labels; merchandising, ticketing and digital music going under one umbrella; management, radio, touring and TV clustered around a demographic (such as Disney), etc. It’s hard to open Billboard these days without seeing some form of vertical integration occurring.”
This is the 360 deal, as executed by Madonna, where one company gets involved in all aspects of an artist’s career. Many executives think it’s the way forward for the business, though Jessica Koravas, European Manager for AEG, owners of The O2, says, “I expect there will be some spectacular failures as some players discover that the other guy's job is harder than it looks.”
It’s not even a new model. Motown was a prime example of an independent record company aligned with Jobete publishing and organizing the Motown Revue tours. But the 360 Deal looks modern and sexy – so much so that private equity company Ingenious is directly bankrolling musicians and equity czar Guy Hands bought EMI. “Everyone is sure the other guy has a better business and wants to get into it,” says Bill Flanagan. “But I’d like to be a fly on the wall the first time that new superstar you’ve signed calls up and says, ‘I’ve been invited to go to New York to play on Saturday Night Live. I’ll need a private jet and half a million dollars to pay for hotel suites for my band and entourage.’ Better get that latte machine working overtime.”
To those not seduced by big advances and the myths in rap videos, it’s possible to conduct a career outside the music label system. For new bands there’s no denying it’s difficult, though established artists like Ryan Adams (gives away live show MP3s to promote LPs) and others show various possibilities. The key necessity is having talent.
The artist-as-business-unit tends to favour intelligent, arty “legacy bands” such as Gang of Four. Their bassist Dave Allen blogs regularly and in November published an intriguing manifesto which can be summed up as: make it cheap, make it quick, post MP3s as music gets rehearsed and recorded, enrol the most rabid fans as marketing agents, partner only with an indie label. Gang of Four’s activities invoke the experimental punk spirit that created them. They got their start on a three-song, cheaply recorded EP that made a lot of waves. Their next release is likely to be a four song digital EP. Free MP3s, downloadable artwork, posting demos on the Net.…this is conscious exploration of what a band can be in 2008.
Dave Allen is convinced that giving away MP3s promotes music sales. It’s been a running argument for the last eight years and various studies support both the death and encouragement of music buying. Look at the numbers though and it’s easy to wonder if it isn’t much ado about very little. According to a recent study by German company Ipoque of a million global Internet users, only about 20% are file sharers. The amazing thing is they account for almost 80% of Internet traffic. But just 30% of that traffic is music – the rest is much bigger film files.
In 2008, expect to see music labels be simultaneously quite pig-headed and embrace the new reality. Though the shouting will continue over the necessity of DRM it will probably disappear. How to monetise the anarchy of p2p has been an ongoing backroom exploration for most of last year and it’s highly possible that a license service will become reality this year, with music downloaders paying a monthly subscription to legalise their ongoing file sharing activities.
Part 1: Introduction
Part 3: Live Performance
Part4: Internet & Mobile
Part 5: Radio