Businessweek outlines the problems facing the music industry, and some potential industry responses, in an article published online yesterday.
The Internet has wreaked all sorts of havoc on the traditional recorded-music model. For decades labels have been signing bands, paying for their first record and video, moving the music to radio and retailers, organizing concert tours, and helping to peddle merchandise. But for many fans and artists, that model has become grossly anachronistic. If the music is flowing digitally, why allow a corporation to get between an artist and the audience? “It’s a new world now, and people are thinking of new ways to reach the people, and that’s always been my aim,” said Paul McCartney in March, 2007, when he joined Starbucks’ (SBUX) new music label, HearMusic, ditching his longtime home at EMI.
It doesn’t help that the same companies have been antagonizing music consumers for years with pricey CDs, rights-management restrictions, and file-sharing lawsuits. “They can’t even make a product you can open,” says Brandon Kessler, founder of Messenger Records, a small New York City label. “Can you imagine going to the store and buying a carton of milk you can’t get open? It’s infuriating. There’s such a lack of knowledge of their customer.”
As I said earlier this week, the record companies do have some strengths, which the Businessweek article also outlines:
Despite the challenges, record labels still perform some tasks extremely well. The Big Four turn out recordings that are technically pristine, meeting the exacting standards of radio, television, and film that are out of reach for most kids with computers. The labels also can transport these CDs worldwide, stock them at retailers, market them reasonably effectively, organize concert tours, and manage various business functions for artists under contract. “They’re very good at selling a Bruce Springsteen album and getting it everywhere at once,” says Dale Anderson, a Buffalo [N.Y.] journalist who produced independent folk singer Ani DiFranco’s first two records.
But clearly the CD market is in decline, and it’s just good to see that some at least among the Big Four are recognizing that and looking for other ways to replace the revenue that will inevitably go away as digital distribution becomes the norm. Read the rest of the Businessweek article to see some of the strategies they’re considering.
Then think about your industry. The RIAA has been roundly and rightly criticized for being slow to recognize how its world was changing. What’s happening in your industry that could be as disruptive as digital distribution has been for the music industry? And what are you doing to not just respond, but to proactively participate in shaping your industry’s future?
Update: see the news about Madonna and her non-traditional distribution/promotion deal here. More competition for the record industry.