The Death of The Music Industry

The great thing about starting an Indie label is that it gives you the chance to do some things that the major labels will not go along with.  It’s pretty common any more with younger acts.  Hence the explosion of the Indie movement which has made its mark on the big record labels ability to control the industry.  But it is particularly impressive when you see one of the music industry icons strike out and put together his own label like Willie Nelson did recently.

Nelson’s comments about why he wanted to set up his own record label, Pedernales Records are pretty positive…

“I have a whole lot of material I’ve recorded over the last 25 years in my studio in Texas, and it’s just laying there. Also, there’s other artists I think could use a good record label. Everything just seems so right about it.”

In the linked story Nelson quips that he likes to keep record companies nervous.  Well forming your own label does more than make them nervous, it’s a death sentence for the major labels if they cannot find a way to turn this trend back to their advantage.  As upbeat as Nelson’s reason sound, you have to wonder why a major label could not find a way to work with him and get this material out and not leave it “just laying there”.  But that’s the major record labels for you.  Never let it be said that an important body work or a major creative opportunity is ever so compelling that they wont find a way to miss out on it.

Good for you Willie and its clear you are doing this also so your kids, relatives and friends will have a record label they can actually work with rather than devote their career to legal battles and seeing their material sat on.  This has always been the appeal of the Indies and it is why more and more the Indies are edging out the major labels for the really good artists and releases.

http://www.reuters.com/article/musicNews/idUSN1439354420070314

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The linked article proves that the next Indie label can come from anywhere.  Now Starbucks wants in on the act.  But this isn’t a huge surprise.  Starbucks has been tinkering around with selling music in its coffee shops for a little while.  They really don’t entirely fit our profile of a scrappy young Indie that represents an up and comer in the music world who is willing to forge a new Indie label and give the finger to the big guys.

Starbucks is one of the big guys, in a different arena.  Arguably they do business like the big corporate giants in the music industry because they go into a town, hurt or shut down those small funky local coffee shops to force us all to drink their overpriced coffee (which hurts my stomach) in the same antiseptic environment as every other Starbucks in the known universe.

But Starbucks interest in launching a label furthers the trend to take the once exclusive rights of the big record labels and scattering them to the wind.  If Starbucks is going to start a label, who’s next?  McDonalds?  Goodyear Tires?  Krispy Kreme?

In the article, what drew my attention more than the fact that one huge corporate conglomerate was meddling in the pond of other huge corporate conglomerates was the innovative thinking that Hear Music was doing before Starbucks took them over.  This approach to letting customers come into the store and select the music they want and burn it to a CD is downright revolutionary.  This approach to music retailing, if were to be encouraged, could go a long way to bring back the “music store” idea and give music fans the freedom they love about the internet while still capturing revenue for the artists. 

I don’t mind telling you that as much as I love shopping online and listening to new music that way, I do miss the funky enjoyment of lounging, sometimes for hours in an a record store before finally buying my 2-3 CDs for that day.  The “High Fidelity” type of setting where the store might play something very cool and enlighten you even as you shop is part of the social aspect of the music industry.  So if Hear Music or even, God forbid, Starbucks can bring back a little of that world that now mostly lives in nostalgia, I would applaud that.  Even if Starbucks is part of Dr. Evil’s plan for world domination.  Aw, go ahead Mini Me, dominate the world.  Somebody needs to.

http://www.reuters.com/article/musicNews/idUSWNAS375020070313

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In the 1960s, the music of the time was heavily tied to the peace movement and some other political causess that were fighting the war and trying to make inroads for civil rights and such things.  Back then the big mantra was “organize”.  And it’s a pretty good mantra.  As independent musicians, maybe it’s because we have “independent” as our primary way of identifying ourselves, we tend to be lone wolves and against any efforts to tie us in and limit our creativity.

But there is no question, the clout that the major record labels have held over the years comes from the fact that they are big and able to speak for many.  Not to mention the budget they have for advertising or to swing deals and the market share and huge audience that they claimed to hold.  That kind of things turns heads in the music industry. 

Well times are changing and the independent movement is starting to surpass even the clout of the major labels.  But until we organize with the goal of both remaining independent but using the power of our combined size, we wont be able to swing the same kind of deal and “sit at the big table” like they do. 

That is why organizations like the American Association of Independent Music are so important to every Indie label and to the artists that support them.  If you have not checked out the good work these folks are up to, take a look at the link below and educate yourself on their mission, their objectives and what they are doing for independent labels and musicians all across the industry.  This is worth supporting and even joining.  You won’t be signing your soul away to the devil because A2IM are Indies just like you.  They are just helping all of us organize, just like the hippies used to chant.  And we can do it without those hideous hairstyles.

http://www.a2im.org/mission.aspx

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As big proponents of the new music industry over the old dying music industry, you would think we would be all about new technology and all things futuresesque.  And we are but more than anything, we are all about the music.  And that is what is our biggest gripe about the way the old music industry has conducted its business in the last 5-10 years.  It seems that the last thing they are about is the music, the artists or the fans.  Instead they are about being a business who happens to be in the music business.

So, griping aside, it’s funny that no matter how advanced things get, we still have a place in our hearts for something old but still great.  And I am not the only one who misses the days of “albums” and good old fashioned vinyl.  Sure they were harder to take care of, cumbersome to store and scratched easily.  But you got a more intimate experience when you finally got the shrink wrap off of the vinyl record and put it on the turntable.  There was just something esthetically pleasing about having to hold it by its edges and turning it sideways to make sure dust and scratches were not becoming a problem.

Not only that, there was always something cool about album covers and all the junk you got inside of a new album.  I still have framed and hanging in my guest bathroom the post card of a man upside down in a lake with his legs sticking straight up that came in the Pink Floyd album, Dark Side of the Moon. 

So it’s cool when you see that the devotion to the vinyl record still has a bit of a cult appeal to it.  You have to wonder if someday there will be a subculture built around preserving the love of the CD.  I don’t know about that because as efficient as CDs and DVDs are, they are somewhat void of personality.  So I guess I will always be nostalgic for the act of pulling that record out its sleeve and lovingly playing it on an old style turn table.  Nothing wrong with that

http://seattletimes.nwsource.com/html/musicnightlife/2003597565_vinyl04.html

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Nobody in the music industry would deny that the royalty system has been a stable system for getting musicians paid for a long, long time.  For most of us making their living writing, recording and performing our music, royalties is a big chuck of our bread and butter and without them, we quite frankly could not be professional musicians.  So over all, we are happy with the way royalties are structured and the administered.  It’s a complicated and difficult process and the PROs who handle it deserve kudos.

The linked article may be one where we do a double take and say “you know, maybe there is some wiggle room for the little guys.”  Small internet radio is trying to give us some variety and options in a world where most of radio is dominated by huge corporate conglomerates that seem to be determined to make the sum and total of musical expression sound alike pop music and boy bands.  As much as the royalty system is good, this new radio landscape has not been good for the music industry and certainly not good for musicians who just want to be heard.

So here you have small internet radio stations trying to make it and reintroduce some freedom and creativity to the world of radio.  And then you get this kind of punitive application of the royalty system which works just find for the big radio powerhouses but can put these little guys out of business.  Don’t you just want to say to the powers that be that are making this kind of decision, “Hey come on now.  Let’s be sensible here and give these guys the chance to operate.” 

After all, these new cyber radio stations give musicians something that is gold in any age of the music industry and that is exposure.  You could almost make a case that it’s worth it to let them air your music for free in exchange for the increased audience they are creating for bands, especially new bands just getting out there and trying to make it.  As the article points out, it’s not like the small internet radio stations want to exist royalty free.  They just want the system adjusted for their size and the size of their audience and market share.  That only seems reasonable to me.

http://www.reuters.com/article/musicNews/idUSN1225136320070312

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The story of how Wilco’s newest CD release finding its way onto the internet well in advance of the release date has a surprise ending.  When I saw this headline, I thought, “Oh boy, here we go.  Another story of the evils of the internet and how a band took a right turn to blow their fortune on lawyers and becoming the poster child for the RIAA.”  But the way Wilco has chosen to handle this is beyond cool and right on track with what we have been talking about in terms of taking advantage of the culture of downloads and seeing the wide spread distribution of your music as a huge marketing opportunity rather than a hideous hate crime.

The quotes in the article from Jeff Tweedy are classic new music industry thinking outside the box language that sees success where others see failure. 

“There’s probably some good argument to be made that (the latest online leak) will prevent a few people from buying the record,” But there’s also the idea that I believe is true for us, which is, it’s people listening to our music.”

“We feel very proud of our record and we want people to hear it. Ultimately, that’s the goal.  I think most people will do the right thing and support us and buy the record, even if they have downloaded it.”

What a refreshing approach to the new internet marketplace.  I wonder if we can get something passed to force the top dogs at the old guard record labels to go to Wilco School so maybe they can get a clue of what is going on in the music industry of this century and how to cash in on it.  Wilco is going to the next step of streaming the release on their web site which will generate traffic, build their fan base and take the teeth out of the download culture entirely.  Tweedy explains…

“We were prepared for it to leak as soon as the first advance CD went out. That’s just part and parcel of the deal. As with previous records, our plan was and is to give people another way to hear the record besides the download, since these often sound like crap and are a pain in the ass for people who don’t have a lot of time or are not super tech-savvy.”

And we all can hear Wilco’s fans breathing a sigh of relief and saying to their music idols “thank you” as they can abandon smarmy file sharing services with their huge libraries of porn and internet viruses and work directly with the band to access the music they love.  Watch how this results in much higher sales for Wilco, a booming web site (with the resulting healthy pay-per-click, affiliate and banner advertisement money) and a relationship with their fans that is strong, warm and affectionate rather than paranoid, full of fear and distrust which is the natural result of using lawsuit so to control the people you want to love you.

http://www.reuters.com/article/musicNews/idUSN0944209120070310

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How would you feel if you saw a man in the middle of the lake struggling for life and calling out, going down once, then down twice so you rushed out there and reached for him only to hear him say “Why should I go to the trouble of reaching out?  You do all the work.”?  Well that is pretty much the situation in the music industry as the old music industry progressively dies and concerned relatives try to find ways to help it survive.

Its like the old guard record labels have blinders on to how the music industry is changing and are just hiding in their boardrooms waiting for it all to just go away.  Meanwhile it is clear that CD sales are plummeting, digital music sales are skyrocketing and that transition is the next natural progression for the industry.  If the big business entities of the music industry would get in on the action, they could avoid a complete coup which will push them out of existence entirely.

The linked article shouts out how blatant the problem is.  The record labels are faced with a dramatic change in the market that is threatening their existence.  Forget for a minute that these are in theory, outgrowths of the music industry and they should be ready to do all they can to help musicians and stay in touch with what is really going on. 

But even as businesses, any reasonable business when facing such drastic changes gets together and devises an aggressive strategy to adjust the business to the new “paradigm”.  Well the record labels have a strategy all al right – do nothing and hope somebody else comes along and saves their rumps from certain oblivion.  But like that drowning man, they wont even reach for the rope.  They would rather continue to die so they can keep their attitude of “Why is my own demise my problem?  We think somebody else should do all the work.”  Well, as they used to say on the Seinfeld sitcom – Good Luck with All That!

http://www.reuters.com/article/musicNews/idUSN0925147620070310

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Each year another new path is opened up for future music stars to find their own pathway to stardom and dump the traditional hard trek through the record labels.  MySpace was a huge leap forward in this regard.  Using file sharing and MySpace, a band or artist can literally get their music in front of thousands, maybe millions of fans and make sales of their recordings without ever even taking a tour of a major record label.

This story linked here is an perfect example of how this rising star, Esmee Denters, did just that.  And now she is on her own road to stardom.  Small wonder she is considering continuing her winning path without getting all bogged down in the politics of the major record labels.  I think she will find as many of us have that the old guard record labels are pretty much obsolete, out of date and more of a nuisance than a help to up and coming musicians.  Besides they are putting all their money, time, talent and energies into suing music fans and pressing into service educators and other “civilians” to be their unwilling slaves in locking up all the music fans they can lay their hands on.

Well kudos to you Esmee and our wishes for more and more success.  If you can go it alone and skip the record labels entirely, you go girl.  But if you find you have the need of some structured help, head to the Indie record labels.  This is where you can find some help of label management that is actually interested in artists and music and getting you out there in front of your fans.  And that is what a record label is supposed to be about.

http://www.reuters.com/article/musicNews/idUSN0831939520070309

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The approach that the big record labels and other old guard music industry giants have taken to solving the file sharing and internet revolution in the music industry can at best be described as overkill.  It is equivalent to a problem solving technique that if applied to pet ownership would maintain that if the dog makes a mistake on the rug, kill the dog and sue all the rest of the dogs.  That will teach them. 

Over the last few years, however, we have seen some genuine innovation kick in that has offered internet prone web surfers some alternatives to file sharing which have really taken off.  Like it or not Itunes and similar services have begun to bring the masses over from the free file sharing world to a system in which they can continue to enjoy the freedoms of file sharing and online downloads of music without finding themselves cast in the role of public enemy number one.

The truth is, a lot of music lovers do not like getting their music by downloading it free from file sharing services.  The reasons they don’t are real and valid including.

*         They know that file sharing services are virus farms and they worry that the next song they download will come with a computer threat that will hurt their system.

*         File sharing services, in addition to having huge amounts of free music, are loaded with disagreeable material such as violent videos, pornography and the like.  Parents don’t like their kids being tempted by such sludge and someone who just wants to hear good music is not the kind of person who wants to see those offerings on their screens.

*         Deep down music lovers want to support the bands they love.  They know that bands cannot continue to make great music if they don’t prosper from their work.  Its simple math.  If they cannot find a way to reward their favorite musicians, those musicians will have to leave their music careers to support their families some other way and everybody looses.

*         Music lovers are not monsters or criminals despite what the RIAA might have you believe.  They are good people who are just finding new ways of doing things.  But they have ethics and morals and their consciences do talk to them when they download something for free that they know they should pay for.

This is why when someone comes up with another innovative way to let music lovers experience new music and then begin to pay for it if that music starts to take off, it’s a great way to bridge the gap.  Amie Street is yet another variation on this theme.  On this site, new artists can provide their music with the hope of getting exposure for it to a vast audience of music lovers.  This is great for new artists because for someone just getting started, the most important thing is exposure.  But it is great for the audience too because it is yet another way they can find and experience new music, maybe a future classic just coming out and know that they are doing so legally and that if that music starts to go somewhere, that artist will be paid for their work.

We congratulate Amie Street for coming up with yet another innovative approach to the problem.  We thank them and give them kudos because the big dogs in the music industry wont take the time to acknowledge that this kind of creative thinking is what is going to solve this problem a lot faster and a lot better than lawsuits and intimidation.

http://amiestreet.com/welcome

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It’s interesting to watch when one of the dinosaurs of the music industry tries to get hip, get young and get with it.  MTV may not seem that old but in truth, it has been around a long time and gone through a lot of “lives”.  So now, according to this article, they want to get with the program and expand their internet offerings dramatically to see if they can get in step with this generation of music lovers who have clearly abandoned ship of television, radio and the old guard music institutions in favor of the internet and digital citizenry in that music world.

Its particularly interesting that Viacom, a member in good standing of the old guard music industry is trying to turn its big hulking ship around and become part of what is new and now in the music world.  It’s a classic “follow don’t lead” strategy that should not surprise us.  For decades before the Indie and digital revolution, the big music powerhouses were notorious for letting the innovators take all the chances and then swooping in and snatching up all the profits as well as  the credit for making something great.  Sadly, sometimes when they made something great, they ruined it in the process. 

But I don’t think even Viacom or the other big record labels and music businesses have the clout to ruin the internet revolution.   This is more than just “the next big fad”.  This is a fundamental shift in culture aware from the old sales and distribution models to the new internet model which is as vastly different from what used to be the “music industry” as dinosaurs are from show horses. 

Will what MTV is trying to do work?  Maybe.  After all, music fans are tremendously forgiving and if MTV and Viacom can figure out how to work with fans the way FANS want to be worked with, maybe they can have a share in the new music world.  But if they are just mimicking what others are doing and keep missing the boat on what is really happening, they will fail.  The new music industry is nothing if it isn’t highly mobile and dynamic meaning it is changing all the time.  Old guard big business entities are not notorious for being able to change on a dime like that.  So it’s a big challenge for the behemoths of the old music industry to become this flexible.  We will see if they can pull it off.  I would like to say “good luck” to them.  But I won’t.

http://www.reuters.com/article/televisionNews/idUSN0237821720070306

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