Don't take my word for it that the major labels and the system that propped them up for so many years are dead. John Mellencamp, who sang a string of rock hits back in the 1980s and '90s, thinks the business is dead as well. In an articulate and passionate essay on the Huffington Post, he argues that the long slide started well before the rise of file sharing, back to when the business started relying on SoundScan and Broadcast Data Systems (BDS).
The old way of selling music is as outdated as '80s hairstyles.
(Credit: John Cougar Mellencamp via YouTube)With SoundScan, instead of relying on surveys from record stores, the labels could see exactly how many units were being moved in any given week, and where those sales were happening. With BDS, instead of relying on phone calls to radio program directors, the labels knew exactly how many spins a song was receiving in each city. Shortly thereafter, the Billboard charts began relying on these automated systems as well. The result: labels ignored the vast majority of the country and focused on a few hits that were getting airplay in the largest cities, and allocated their A&R and marketing budgets accordingly. We ended up, according to Mellencamp, with No. 1 hits that most of the country had never heard, and the rest was a long downhill slide to today's hyperfragmented and piracy-ridden market.
It's a great essay, and I particularly like his side note that the CD was created out of pure greed, as a way to get users to replace their collections of perfectly good vinyl records. (Remember how CDs were supposed to offer clear sound forever? Funny, my CDs from the early 1990s are already wearing out and skipping, but I have records from the 1950s that still play adequately.)
But like the folks at Idolator, who called Mellencamp old and dumb, I completely disagree with his conclusion. Mellencamp says that the irrelevance of radio and fragmentation of the market means there's no organic way for music to find an audience and grow. That's completely wrong--there's more opportunity for smaller bands today than there's ever been. Yes, beginning artists might have to do more work themselves, but recording, manufacturing, and distributing an album has never been cheaper or easier. From ProTools to Disc Makers to CD Baby and Tunecore, and more recent competitors like Routenote and Audiolife, these are tools that anybody can use and master. Sure, online marketing through vehicles like MySpace can't compete with mass radio play in 100 cities, but it's available to anybody--not just the companies' chosen few. When you get a bit bigger, you can enlist services like Topspin to hype your product in the digital realm, for far cheaper than an old-fashioned media blitz. Even getting gigs no longer requires a booking agent, thanks to services like Sonicbids.
In one sense, Mellencamp's right: if you're in music to become a rock star, now's a bad time to be a musician. But if you want to have your music heard as broadly as possible, there's never been a better time.
And for those of you who couldn't sing the chorus to Mellencamp's "I Need A Lover" when you read his essay, click here.
Follow Matt on Twitter
Update, 3/24: An SXSW organizer contacted me to let me know that the show included 14 panelists from major labels, as well as 20 panelists from independent labels. The truth remains that I didn't see, hear, or meet any--but of course I couldn't attend every panel. I've corrected the post accordingly.
Almost a year ago, I posted about how two executives from major Web companies had taken new positions related to digital music: Douglas Merrill left Google to become EMI's president of digital operations, and Ian Rogers left Yahoo Music to become the CEO of Topspin, a then-new company specializing in direct-to-fan marketing.
A year later, Merrill's gone, following Guy Hands out the door. (Hands was the CEO of private-equity firm Terra Firma, which bought EMI in 2007.) I'm not sure what he did there, but imagine he was behind the portal site that EMI launched last year...to no effect whatsoever.
Contrast that with Topspin, which oversaw successful launches of several albums and was just at SXSW to announce a major update to its automated marketing platform.
Sure, EMI's taking in far more revenue than Topspin--it's still got The Beatles' catalog, after all, and Topspin's just a start-up--but look at the momentum, the level of excitement, the bottom line. There's no comparison.
At SXSW, the conventional wisdom from every panel I attended, every business meeting I had, and every artist and fan I spoke with, was that the major labels are technological dinosaurs with no chance of survival. I didn't meet a single major label employee in the entire four days I was there, though at the Guitar Hero-Metallica event, the PR coordinator spent a long time explaining to a TV crew that all interview requests had to be approved by the band's label. Ah, the good old major labels we know and love--barriers, not enablers.
(Aside: as much as Metallica may represent the old record industry, its SXSW set absolutely slayed, consisting almost exclusively of pre-Black Album material, and so fast and tight and loud and awesome in the original sense of the word that it seemed like it--and we--were all 17 again. Pitchfork's take is absolutely right; it's not fair to compare them with any of the other bands at SXSW. Long may they rock, with or without the recording industry as we know it.)
I'm rambling, but keep looking. U2's second-week sales dropped 75 percent--nobody cares. Sony hired Rick Rubin to come up with a digital strategy, but nothing's happening (although Rubin remains a successful producer).
The RIAA seems to serve no purpose except to sue customers and try to get damages that are many thousands of times the value of the product infringed. Warner CEO Edgar Bronfman Jr. took home a $3 million bonus after his company lost $35 million and earned his spot on the CEO wall of shame.
Established artists are going independent as soon as their contracts expire--the latest is Counting Crows--and reporting, again and again, how much better they can do without a label.
A year ago, there were still some arguments for the necessity of major labels to handle marketing, promotion, and other tasks. Not anymore. The conventional wisdom now: if you're interested in the music business, and you want to change the world and make lots of money, go anywhere else.
If you're a musician, and you want your music to be heard, go anywhere else. If you're an investor looking for a business with a lot of upside, go anywhere else.
Follow me on Twitter
AUSTIN, Texas--I've blogged about Topspin Media in the past--it's the company that handled the staggered direct-to-fan release for the recent David Byrne-Brian Eno album, "Everything That Happens Will Happen Today." At the South by Southwest festival here this week, Topspin announced that it has taken a lot of the lessons it learned from the Byrne-Eno release and applied it to their platform.
Under the Byrne-Eno program, the artists first asked listeners to enter their e-mail address in exchange for a free song download. A few weeks later, they released a streaming version of the entire record, while simultaneously offering various packages for sale at various price points. This was the only way you could get the CD for eight weeks, when it finally went on sale for retail.
Subsequently, the artists used the e-mail addresses they'd collected to send messages about the David Byrne tour for the album, as well as a vinyl release that just came out. It was a very clever and canny way to market a record, and it benefited not only fans but also the artists--they say they earned the equivalent to a record company advance during the eight-week exclusive period.
I got a demonstration of the new platform from Topspin on Thursday morning, and there's a lot of impressive behind-the-scenes work going on there. The process starts with embeddable widgets that the artist (or, really, their management) can offer through their Web page or MySpace page; any fan can then take these widgets and redistribute them on their own pages, allowing artists to leverage their fan base as marketers.
There are a couple standard widgets, including one that lets users enter an e-mail address in exchange for a free download, and another that can be used to share an audio and video clip of some sort (Byrne and Eno sat down and talked about the album).
As these widgets are redistributed, artists can collect detailed information about who's putting them where, paving the way, for example, for a scenario in which an artist could offer free backstage passes to its 10 biggest promoters. Further down the line, when the artist is selling an album, Topspin enables the collection and storage of more information about fans (such as their ZIP codes). Such data is later used for promotions such as targeted e-mails advertising a local gig. Giving personal data is opt-in; these are fans getting information about an act they like, not random spam or cross-marketing.
Topspin's not intending to go broad--musicians have to have some history or traction before it'll take you as a client (management's basically required; a label is nice). The company is not looking to get into the distribution game, either. But I think that this type of direct-to-fan marketing is soon going to become standard-practice, at which point it'll be interesting to see how Topspin differentiates itself from the labels...or, perhaps the labels will just outsource this kind of work to them.
If you think John and George were the only psychedelic members of the Beatles, recall that Paul wrote "Helter Skelter" (although John played that bassline) and check out some of the tracks from his first solo album, Ram. If you're still not convinced, head on over to The Fireman site and take a listen to Electric Arguments. This is Paul's second collaboration with Killing Joke producer Youth, and it's the wildest music he's made in years.
(Credit:
The Fireman)
Like the recent David Byrne/Brian Eno record, Topspin Media is handling promotion and distribution for Electric Arguments, and a few days ago they made it available in several different packages, including one with vinyl for $29.99.
This is exactly how music distribution should work: you know exactly what you're getting--no Chumbawamba factor--and have different options depending on how big a fan you are. I'll be shocked if in five years the labels are still hoping to convince us to pay $15 or $20 for a full CD based on one radio single.
Back in August, I noted that the new David Byrne/Brian Eno album, Everything That Happens Will Happen Today, was available in its entirety as a free streaming audio file.
They also put up a free download of one track, "Strange Overtones." Later, they offered several packages to purchase--from downloads-only for $8.99 to a deluxe package with a hardbound book, screensaver, and extra songs for $69.99.
Turns out that this release and marketing strategy was driven by Topspin Media, which is led by former Yahoo Music Vice President Ian Rogers.
A couple weeks ago, Rogers spoke at a Grammy-sponsored event in Seattle and, as Idolator reports, the results of the Byrne/Eno experiment have worked out quite well for the artists. After eight weeks of digital-only sales, the duo have already grossed what they would have earned from a typical record company advance for artists of their expected sales profile. And that's without any physical CDs--they don't drop into retail stores until November 30.
As Nine Inch Nails has already shown, the key for established artists is to reach out to their "superfans" and give them opportunities to feel like they're part of an exclusive club. In the case of Byrne/Eno, it really worked: of the people who entered an e-mail address, more than 50 percent opened the subsequent e-mail, and more than 20 percent eventually purchased music through the site.
I'm a David Byrne fan--I've bought most of his solo CDs (which range from OK to great), and have seen him in concert a few times (always outstanding). Sure enough, as soon as I found out that I could buy a physical CD through the site, that's what I did. I guess I'm not a superfan, as I didn't spring for the $70 deluxe package, but I did buy tickets for Byrne's Seattle stop as soon as I heard they were going on sale.
Maybe it's just coincidence, but this week two executives have left major Web companies for roles in the music industry.
Earlier this week, Google VP of Engineering Douglas Merrill left to lead EMI's digital music initiative. According to his Google bio, his core background is in finance--not music and not really technology, although apparently he has done a lot of work in information security. Apparently, singing the Sex Pistols' anti-label song "EMI" to EMI head Guy Hands helped him get the job. Too bad MCA's gone--maybe I could have gotten a job by singing Lynyrd Skynyrd.
This morning, Yahoo Music head Ian Rogers announced that he's leaving for Topspin Media, a mysterious startup that apparently hopes to "help artists earn a living through software"--based on the old Wired article that Rogers links to, I'm guessing Topspin is trying to pioneer some new form of digital distribution or rights tracking. Rogers has expressed some interesting ideas about standard labeling for downloadable music files, and while Yahoo might have been a great venue to help push these standards through, the attempted Microsoft acquisition throws everything into doubt. In fact, one of the first moves Yahoo made after the acquisition announcement was to scrap its own music subscription service and move customers to Rhapsody. I honestly can't see how a pure Web-based music service like Yahoo's could survive in a Microsoft that seems devoted to pushing its own Zune ecosystem as a competitor to Apple's iTunes.
Two pieces of news don't make a trend (although if you go back two years, I guess they're following MSN Music's Hadi Partovi, who left to help his brother start iLike). Even so, it's interesting that executives are leaving Web companies to make waves in an industry that's supposedly dying. The obvious answer: music isn't dying, but the current distribution models are, and whoever figures out the next distribution model stands to make a lot of money.
- prev
- 1
- next
