The Future Of Music Industry Pt. II

Here's an interesting article from the Mediapost's Online Spin Newsletter this morning by Cory Treffiletti (what a weird surname, in finnish that means something like a "Date-Hairdo")


The Future of the Music Industry Is Now


In case you missed it -- and you very well may have missed it, because it happened awfully quickly -- the Web has finally become a legitimate channel for the promotion and distribution of music, and the music industry is finally embracing this fact. Of course, this can be debated, since the Web also pretty much killed the record industry at the very same time.

This struck me while watching the Grammys this year. The award for Best Rap Album went to Lil Wayne. Wayne had the top-selling album of 2008, selling 2.88 million copies of "Tha Carter III," followed by Coldplay with 2.15 million. This is amazing in two distinct ways; first, because Lil Wayne built his reputation by giving away hundreds of hours of music through mix tapes and other online methods in order to establish a fan base, and followed it up with a whimsical array of beats and rhymes on a legitimate label release, netting the biggest, most ubiquitous album of the year. It's also amazing that for the very first time since tracking album sales started under the current model in 1991, the number-one album didn't clear 3 million copies.

The biggest single first week album sales record goes to 'N Sync (don't laugh), as they sold 2.4 million copies of "No Strings Attached" during its first week in 2000, but since then the numbers have fallen across the board. All that being said, way back in 2000 the music business was just plain different. When you bought an album, you were more than likely buying it for one single song -- or maybe a couple -- and the rest was filler. Nowadays, with iTunes leading the way for digital downloads, most artists are happy enough to sell singles. Artists like Smashing Pumpkins have been releasing single songs rather than albums, and in some cases they're giving them away (much like Hyundai's recent giveaway of the Smashing Pumpkins song in its TV spot during the Super Bowl).

What has finally happened is that some artists, if not their labels, are waking up to the idea that the Web can be used to hone their craft, build a fan base and promote their music. Lil Wayne gave away hours and hours of material for free, proving his own prolific status as a maniacal musician and allowing anyone who wanted to hear him to get a taste of his style. In doing so, he also perfected his craft and became a better artist by weeding through the process in public and inviting his fans to come along for the ride! By the time he was ready to put out another proper release, he'd become the self-proclaimed "best rapper alive" -- a title than can certainly be argued, but at least he makes a case for it.

Other artists focus on standard Web sites like MySpace music or their own official sites to get out their music. If you're established enough, you can do it, but it takes time and it takes effort and it takes a lot of arguing with the suits that still represent the labels. Artists like Pearl Jam (I couldn't go an entire article on music without mentioning them) are talking about emulating Radiohead and releasing their own music through their own sites. These levels of artists don't need a label anymore. The fan base is large and they have the wherewithal to get it done, so why not go this route?

This leaves the labels and the industry itself flailing a bit and testing out every new model under the sun (which is a good thing). They are testing paid downloads, subscription services, ad-supported streaming, ad-supported and ad-integrated P2P download services -- and in so doing, they're rewriting the rules for the future.
The rules for the future of the music industry are astonishingly simple:

• Rule #1: Make good music and leave the filler at home.
• Rule #2: Invite fans into the experience and build a stronger relationship with them.
• Rule #3: Utilize multiple revenue streams; it's not only about selling albums anymore.
• Rule #4: Have we mentioned make good music, and leave the filler at home?
• Rule #5: Shape your artists, or let them shape themselves publicly (Pearl Jam, U2 and Coldplay are just three examples of artists that took time to develop and are now some of the biggest acts in the world).

Bad News: Spotify's country restrictions

S**T. I just found out that I couldn't play all the tracks on my current Spotify playlists. Here's why, goddammit:

""Next week we are going to be making some changes to our music catalogue that we feel are important to communicate clearly. Unfortunately we are going to be removing a number of songs from our catalogue and adding country restrictions to some tracks, which may make them unplayable for you.

Dammit, it seemed to good to be true anyway.

Read more here.

Luke, use the power of the free, the music industry's a-changing!

Everything that is digital can be copied and distributed online quite easily, we all know that. I went to SIME-conference last week and heard a few interesting presentations on the subject. I’m not gonna go too deeply into the stuff that the PirateBay guys had to say (yeah, they want it all for free and it’s fun doing that , that’s pretty much their political agenda), but I’d like to share some thoughts of Joi Ito.

Joi Ito is the CEO of Creative Commons and his point was simply that in the digital world copyright issues should be thought over. He was not only speaking pro free content but he had some good points on how different levels of copyrights could actually serve in marketing the artist/producer. This just calls for profound adjustments on the business model of the current music industry.

He had a good example of the Brazilian Tecnobrega-movement. The whole Technobrega-phenomenon is based on the fact that artists don’t get anything for their normal CD’s. The CD’s are sold as pirates or they are even given away for free. The artists are paid through concerts, sound system nights, t-shirts, special merchandise and such. Ito pointed out that in the Brazilian market it would be impossible to make a living selling CD’s ’cos no one would buy them from uknown artistst. And these unkonwn artists don’t get a single gig unless people know their material. By distributing cheap/free CD’s the artists gain more attention and are booked to better gigs. And once they get to be more famous, some people actually buy their special versions of their CD’s for really high prices, wanna wear t’shirts with the artists logos…

This is actually Long Tail Theory & Freeconomy mixed in real life: you give away free material to market your talent and then you make money selling specialized niche products for a good price. The old model of marketing and trying to sell to masses doesn’t work there. Many analysts think this is the way how music business is developing – the business model is slowly changing and the biggest income comes out of touring & merchandise.

The reason why I'm a fan of mr. Ito, is that he actually thinks of the bigger picture, the business side of copyrights. I mean there should be a business side if some people (artists + the people working for/with the artist) want to focus full time on making music and making a living out of it.