Tag Archives: The Music Business

So says Peter Gabriel discussing the future of the music business.  There’s no doubt the big business end of the music industry is in crisis, as the disruptive technology of broadband internet undermines the existing business model of the major labels.

On the latest blog on Helienne Lindvall’s Behind the Music, commenter “Rockard” completely nails the true agenda of the major record labels:

The market for songs is the same as any other market. Price is determined by the interplay of supply and demand. Songs could be sold at a higher price previously because their supply was restricted by the record companies and radio stations. You could only access them by buying an album, listening to the radio or going to a concert.

The ability to download and stream music along with the wider access that musicians can get for their songs means that effectively the supply curve has shifted to the left. Since this has happened, their whole strategy has been to try and shift that curve rightwards again by freezing the competition. The competition here isn’t just illegal sites but independent bands distributing their music online.

These record companies are not the artists’ friend. They are not music lovers. Their profits are maintained as much by who they don’t sign as by who they do. It should be no surprise that established artists support the anti piracy stance of the big companies as they also profit from the current barrier to entry.

There is no chance of a return to the old model so they need to be working on a new business model. Optimistically I see more live music and greater market segmentation, i.e alternative artists.

Yes, this is what I have been saying for years. I’ve always believed that the major labels hatred of downloading and filesharing had less to do with stopping people pirating U2 and Metallica, and more to do with stopping people discovering new music that they don’t own.

From a blog which claims to be “First in Music Analysis,  Lefsetz Letter we get this post about the concert business.

Maybe no one cares to the equivalent of a multiplatinum level anymore.  Maybe the live business has to give that paradigm up.  At least for a decade, until new acts are grown.

We want music that resonates.  And we want music.  Lady GaGa is outfits.  Katy Perry is so second rate she’s third rate.  The future looks more like the Kings Of Leon.  A band that’s been around for years that finally breaks through.  And doesn’t break the bank when it sets ticket prices.

Screw lawn tickets at a discount.  That’s like listening to music on your neighbor’s stereo.  How about getting a ticket for a developing artists show when you buy the ticket for a star.  We’ve got to get people sampling, we’ve got to get people coming to the show on a regular basis.

Since the post doesn’t allow comments, I’ll respond here.  Has it really not occurred to this guy to go out find music by himself rather than be a passive consumer of whatever is served up by the corporate biz?  There’s plenty of great music out there.  Every genre you can imagine and many more you can’t – you just have to look for it for yourself rather than wait to be spoon-fed.

Go and read a few music blogs; listen to last.fm, network online with other music fans. You might even make a few new friends that way.  Once you’ve realised there’s more to music than the narrow commercial mainstream you can go to club venues and see great bands for a fraction of the one-gig-a-year price for some has-been at a corporate enormodome.

On The Guardian Music Blog, U2′s manager Paul McGuinness praises France’s proposed “3 strikes and you’re out” laws on internet piracy.

Amidst the posts sneering at U2 (Guardian blog commenters absolutely hate U2 with a passion I can never quite understand), commenter Iainl sums up precisely why this proposed law is dangerously flawed.

I don’t pirate music. And I’m certainly not depriving you of any funds. But I still don’t want to be kicked off the internet just because some kid has randomly used my address as the spoof field when hiding their tracks – something that is already so common in email as to be totally unworkable.

That just about knocks the nail on the head.  With their past record of Mafia-like behaviour, I don’t even trust the media cartels to be able to distinguish between use of legitimate streaming sites like Spotify or Last.fm and illegal downloaders. And who’s to say the next time somebody in the record industry gets into a dispute with a legal file-streaming site over the level of royalty payments that they won’t respond by using this law to threaten that site’s users with disconnection?  Vague promises from record companies that they won’t do things like that are worthless.  Once such a law is on the statute books, somebody sufficiently nasty-minded or greedy will try to abuse it in that sort of way.

Even though I wish every major record company to go to the wall, I’m all in favour of creative types earning a fair reward for their efforts.  But I don’t trust the existing media cartels to do it for them. With their own long track record of ripping off their creative talent they don’t exactly have any moral high ground on which to stand.

And surely the big record companies are largely responsible for letting the download culture “music should be free” genie out the bottle in the first place, by spending too much effort trying in vain to prop up an obselete business model rather than attempting to devise a new one.

To give one example, one of the biggest drivers of illegal file-sharing sites has been the fact that the legal downloading sites wasted years crippling their products with DRM, which was something the marketplace clearly didn’t want. If you were foolish enough to hand over money for a DRM-crippled download, you merely rented the music for a random amount of time. Sooner or later you’d upgrade you media player, or the company you ‘bought’ the download from will decide to shut down the DRM authentication server, and your file will no longer play. You were simply better off pirating it from a file-sharing site.

By the time they realised that DRM was a crock and started selling the DRM-free downloads the marketplace wanted in the first place, illegal file-sharing was too well established. It’s now far harder for legitimate substription-based downloading sites to get going than it would have been had the cartels not tried in vain to strangle downloading at birth.

From the blog of John Grubb, bassist for Railroad Earth

The record industry used to exist because recording was very expensive. It was expensive to record a song, it was expensive to reproduce the recording of the song, and it was really expensive to warehouse, distribute, and sell the recording of that song. Thus a whole industry cropped up to take advantage of the fact that the barrier to entry for your average recording artist, say Ma Carter out of the hills around Bristol VA, was so astronomically high that nobody really thought about releasing their own music. Show up, play my tunes, get paid for them? Okay! This worked great for long enough for the basic oligarchic framework of the major label system to rise to power.

And nowadays with recording technology being so much cheaper, it’s possible to record a great-sounding album on a very limited budget, which means bands can self-release without having to sell their souls to a record company. Albums like The Reasoning’s “Dark Angel” and Breathing Space’s “Coming Up for Air” didn’t cost a fortune to record, but sound as good as many major-label releases.

I have to ask whether there’s any point to the majors any more, when all they seem to churn out are formulaic acts who are all hype and no substance. With their track record of ripping off creative talent, suing their best customers, and generally throwing their weight around in order to block technological changes that threaten their existing heavily-flawed business model, I think artists, fans and music in general will be better off when the whole lot of them go to the wall.

Meanwhile I’m getting frustrated with Helienne Lindvall’s weekly column Behind the Music in the on The Guardian Music Blog.  While sometimes an interesting read, she doesn’t seem interested in anything that doesn’t revolve around the major record companies. It’s too much about what will shortly become the record industry of the past, rather than looking to the music business of the future.