Thursday, September 23, 2010
There's no money selling music
One of the first conversations I ever had with TC (circa 2007/2008), before she came on board as Publicity Strategist for AG One, was about the direction of music sales. We were at Florentines -- one of the teams favorite local Fullerton jump offs -- and in the midst of all the commotion from dancing bodies to a crowded bar, we were sitting behind DJ Roial 1's booth and started talking about how record labels who expect to sustain financially in the next 5 years cannot continue to be reliant on revenue generated from music sales. I told TC that within 5 years iTunes would no longer charge per song download...it would become membership based and for a set fee you'll be able to download X amount of music a month...and so on and so forth with the algorithm.
Approximately 3 years from the day we had the conversation I am writing today to admit that I was wrong...and here's why.
I recently saw a commercial on TV for Rhapsody that said they are now offering unlimited downloads and streaming of music directly to your phone, iPod, computer, etc. for a pretty reasonable monthly fee. . . I was wrong, iTunes slept on it. Either they missed this new trend or are in the process developing a more efficient means of "selling" music.
But this goes to show that the huge decline in music sales is ultimately forcing a change for digital distribution. This is no longer just a problem that labels and artists have to face.
Its always going to cost money to make good music -- plain and simple. But with the convenience of being able to download music free via the Internet makes it hard to recoup the funds invested. The quick fix that labels have taken as of recent is to implement a new type of record deal: The 360 Deal.
I have never been a fan of the 360 deal -- not to say they aren't a brilliantly thought out means for both labels and artist to mutually benefit...However, I am not a fan of them because of how they are manipulated and leave even the most successful artists struggling at the end of the day. With the need to survive artist have no choice but to tour more (keeping them away from families and studios), rush to finish albums to generate revenue (ultimately hurting the culture of quality musicianship), and leaving our music outlets flooded with catchy singles (because catchy singles sell, albums don't) ...which ultimately leaves artists in a seemingly treadmill type lifestyle they call a career.
The long haul fix: Branding. 360 deals are an attempt to do this, but I believe there is a better paradigm that will be far more lucrative for artists, musicians and music companies alike. I have my theories and I've put some into practice. Some have generated the expected results, others have not -- I'm still perfecting those.
For now I'm happily building a nice strong foundation for my castle to rest upon -- its almost done. I still strongly believe music will not be a lucrative means of income within the next few years. I'm preparing AG One to sustain independently of that revenue -- what about you...will you survive without it?
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Posted by Randy Z. at 11:15 AM