September 5, 2009 “What is going to happen to the music business?” Pt. 2
SomeRandomAddressThatIDon’tWantToPublish@yahoo.com wrote me an email that said among other things:
“What is going to happen to the music business?”
This is what I wrote back and none of it is rooted in anything other than stream of consciousness so debate if you will…
Nobody really knows for sure. The major labels (Sony, Warner, EMI and Universal) are all rapidly trying to diversify their business so as not to be tied solely to the sale of recorded music. Music sales have plummeted in the last few years because of piracy, although one very successful friend of mine once said, “It’s not the download that is killing the music business, it’s thirty years of greed and arrogance”. I find that a bit cynical but actually kind of very funny. Still, according to a conversation I had with a friend over at Big Champagne not too long ago - of all of the music downloaded online only 5% of it is done so legally (i.e. Paid for). There have been studies done since have shown that piracy is on the decline but many people are pointing to an increasing number of free streaming sources as the cause. (see studies by Paul Brindley and the leading question)
Labels are doing what is called 360 degree deals with artists they are signing which means that in exchange for an advance, marketing and promotion the artists agree to give up a percentage of all of their income streams meaning money from touring, corporate sponsorships, merchandise, publishing etc. I am told they have built departments or acquired companies that help them bolster and develop these income streams for their artists as well but I don’t have a ton of first hand experience with these other services myself. Label experience and general life experience leads me to believe that some of said services are great and have great executives, some are mediocre and a few are completely worthless if not harmful to the artist. All of them are likely over-run with too many artists to handle. If there is an upside to this it is that labels are incentivized to do what is right for their artists’ whole career, not just their own interests…The downsides well…those are what they are especially if a manager is taking out 10-20% across all streams and the agent and lawyers get their cut and…yea you know the drill.
So I would avoid being in the recorded music business if that is what you were planning. Overall the music business is much better off than the record business. It seems as if there is more music being listened to than ever before in more ways than ever before and if I had to guess it is being played on more devices than ever before. There is more music being created and distributed than ever before and Instrument and musical equipment manufacturers in the US according to NAMM’s 2008 Industry summary have been doing consistently better in the 2nd have of the decade than the first. (More people are playing more instruments is my guess)
It is, however, starting to come down to the problem of no one being in the audience because everyone is on the stage…
No matter what happens, there will be a music business of some kind. There was a day when Hemmingway was what we think of as a rock-star. The book business survived in spite of radio, in spite of TV, in spite of Video Games and in spite of the Internet. Will it survive Kindle and the Apple Reader? I’d say it probably will survive. It will probably loose more business if such devices make digital book files widely available (with or without DRM there will be rampant file sharing) but there will still be a need to purchase niche items because they will be hard to steal.
The book business is certainly smaller and leaner than it used to be but it is still there. From what I know about books there are obviously some great writers who make lots of money doing it but for most people they seem like a good way to promote themselves if they have services or philosophies to sell. I can see music becoming more and more like the book business. It could become even more of a byproduct or secondary support content than it already is when it is used in film, TV, videogames, websites etc. Perhaps music will borrow business ideas from the film industry and very expensive albums will only come together when multiple labels are supporting them the way multiple movie studios back different combinations of actors, directors and producers in order to mitigate risk… Then again, with all of the tools that are within an artist’s reach today for DIY, maybe not.
(On a side-note (this wasn’t in the email) – Coconut Records, Jason Schwartzman’s band… Where does Schwartzman get off being a great actor, great looking and a great musician – he’s a perfect example of music as a secondary or a support product – will he make a ton of money at music? Who knows, but he’s got a great vehicle to support his acting career and make his star rise even higher. He makes it looks like fun too… I can say only out of pure jealousy F*ck that guy.)
I hope that helps. I’d aim outside the record business if you weren’t talking about being an artist. If you are talking about being an artists well hell, that’s always been really hard so I guess making it harder to make a living shouldn’t effect you that much. People pursue music for love not money. There are much easier ways of making money but they can be rather soul crushing if you are an artist at heart. People often come to the crossroads of love or money. If you find yourself there I have a tent set up and have been camping there for quite some time. Drop by and say hi…
Good Luck to you,
Rick
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