A fresh look at the media industry and how trends affect the independent artist and publisher.
Spotted on: Digital Music News
According to this daily industry bulletin, there was a 21% drop in music sales between Thanksgiving and Christmas.? This is traditionally the hottest time of the year for music sales.? This is on top of a 15% drop in sales for the year of 2007.
Bottom Line: Given plummeting sales and the major restructuring going on at EMI, 2008 may be the year where we see a major shift in how major labels operate.
Spotted on: Yahoo
2007 was an interesting year for the music business.? Music sales were up, and almost all of that boost came from digital downloads.? Physical sales took a whopping turn for the worse.? The AP asked a couple of industry-types what their take was, and here are some of the highlights:
“Big” Jon Platt, EMI: “…the problem, is that everyone is trying to fix the old model, and that’s obviously not working, so we need to build on a new model… The business itself has to get back into artist development…We just have to be creative in thinking of ways to grow an artist.”
50 Cent, Rap Superstar: “The actual record sales may be changing but people are actually getting the material the best way they can and coming out to see the show…When you have a record that doesn’t connect right away, if the company doesn’t have a passion behind an actual artist and feel like this kid is an actual star and support it, it’s just going to whither away.”
Michael McDonald, ATO Records: “The bottom line is if anyone had a simple answer, it would be in motion already…I do think music is as relevant and there’s more music out there than ever before…Everyone is looking for a solution, but the solution does not look like the music business has looked for the last 30 years.”
Mark Cuban, Sports Team Owner: “They sell music and they need to be everywhere and anywhere music generates revenue…their ultimate solution may be in reducing the price of CDs to under $5 across the board and building artists in order to monetize everywhere else.”
Bottom Line:? Even successful music business people are completely lost to what’s next.
Spotted on: CNET
Trent Reznor released sales numbers for the new Saul Williams release on his blog. The album “The Inevitable Rise and Liberation of NiggyTardust” was produced and released by the Nine Inch Nails mastermind with a forward thinking model: Download the album for free, or pay $5 for a higher quality MP3 version (a la Radiohead). According to the numbers released, approximately 18% of the downloads were sales.
This number is likely slightly lower than reality. There is no information to measure how many people downloaded the album for free then went back and bought it. CNET interviewed both Trent Reznor and Saul Williams, and their opinions are quite different.
The album has been out for two months, and the major campaign of videos and touring begins in the next few weeks. The album sold almost 30,000 downloads and gave away another 120,000 with almost no marketing campaign, and no publicist. Although the album hasn’t gone digitally platinum, this experiment is a positive sign. Williams’ music does not neatly fit into a pigeonhole. While the sales model is similar to Radiohead’s In Rainbows (which is no longer available as a free download), these two artists are not in the same position, and the IRLNT test will be a gauge of what mid level artist can expect from this model, at least for this year.
Having 20% of your listeners buy your album may not seem like a large amount, but it’s hard to measure who they are, how they know Saul Williams, and whether they were pre-existing fans or not. Consider that an album’s life span is long – upwards of two years, and over the next eight to ten months we will see how this model works when promotions are put into play.
Bottom Line: Whether or not this model of selling albums works is still unclear. As time passes, and more artists try this model, we will see whether audiences will pay for something they can get for free.
Spotted on: Gizmodo
The way the major labels are adapting to the transforming music industry is strange. Somehow, the four largest music labels in the world seem to be the last ones to understand what people want. From the perspective of an onlooker, it seems like they wait till the last second to adapt to everything.
DRM is officially becoming a thing of the past. According to Business Week, it appears that Amazon’s DRM free service and billion MP3 Giveaway has brought the Big Four around to a DRM free world (at least for some albums). Sony BMG, the last of the big four labels to cling to DRM like a liferaft, has announced they will stop using it sometime early this year.
This is the magic moment when the major labels have all given up on the wildly unpopular copyright protection. Sony is using a gift card service, where listeners can buy cards at retail outlets (such as Best Buy and Target) and then redeem them for MP3 albums online.
Considering the 15% drop in CD sales last year, it’s refreshing to see that the major labels are adapting to the desires of their audiences, even if it is forced by pressure from iTunes and Amazon. DRM was instrumental in iTunes gaining dominance in the music download market, and now even they are beginning to offer DRM free tracks, and at the same 99 cent price tag.
Bottom Line: DRM will finally be relegated to where it belongs, on subscription services.
Spotted on: Techdirt
A new idea has surfaced in the music business this year: giving away tons of free CDs. First Prince did it through UK newspapers, causing quite a stir in the industry. Now Big Head Todd and the Monsters are giving away 500,000 copies of their new album to radio stations and fans, splitting the cost with radio to get the copies out there. The albums will be available as giveaways from radio stations, and on the band’s site. The album is available as a free download for fans, and according to the BHTM site, the physical album is “Available SOON from our merchandise store for just $5 or FREE with any merchandise purchase of $15 or more.”
At first glance this appears to be another groundbreaking model for the industry. BHTM used to be on a major label, and has the industry recognition and viability as a touring outfit (they are preparing for a 60 city US tour as we speak) that comes with major label artist development and promotion.
Looking closer, even at dirt cheap prices (including postage), the investment here would be a minimum of $200,000. Apparently, fans are jumping at the bit to get the free album, a testament to the credibility of BHTM. But what does this action say for the rest of us in the industry? Although not as widely recognized as Prince or Radiohead (and few artists are), BHTM has the credibility and resources to launch this kind of campaign. For the rest of us who have not had major label development, access to create a quarter million in investment, tons of willing radio contacts, and the ability to book a viable 60 date US tour, this tactic may not be fruitful in the short term.
Based on the flopping CD sales over the holiday season, CDs are set to lose major amounts of retail shelf space next year, except in major retail outlets like Wal-Mart and Target. Consider that without retail shelf space, physical distributors will rapidly become obsolete. These days, selling 100,000 copies of a CD gets you high up on the charts. Give the sorry state of CD sales, it appears that musicians will need to have some kind of sure money maker (like touring) to buffer this kind of massive promo giveaway, unless one is willing to invest tens of thousands of dollars and ‘see what happens’.
So what about the horde of mid level musicians that don’t have the clout to give away half a million (or even ten thousand) CDs? It’s a brilliant marketing ploy, but without the ability to book a viable tour with sweet guarantees and juicy crowds or the guarantee of radio play it becomes a major loss leader in an industry that is rapidly losing revenue streams.
Giving away albums to generate buzz has become the modern equivalent of the single. Let the fans hear the music, and give them the opportunity to support the band live, or by buying merch or CDs. This tactic will drastically undercut the Big Four’s ability to set prices and control music distribution over 2008.
Bottom Line: It is beginning to appear that the only way to transform the music business is to devalue music and start again with a whole new model, where art is free and the money comes from something else.
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