A new model for record labels?

Excellent thread and thoughts by all...it's all valid. My perspective on this topic is that the real enemy to sales is "access". All of the downloading and visibility and instant gratification afforded by all of the content websites, including a band's own website, is what has diminished the desire. Access has diminished aspiration, access has diminished the aura and magic of the unknown and the thirst to learn more.

Back when there was no access, you could not learn about or see the maker of the music....the mystery and the desire to learn more led to sales because that was the only way you could learn more.

Jimmy Page was only someone I could see pictures of in a magazine or hear his music on the radio...to really get more *I had* to buy the albums and then sit there and dream about what it would be like to see him play live! All the while, this created an aura and an aspiration and type of frenzy to learn more, hear more, see more. Instant media access of all types has diminished the aspiration and the aura and magic.

Compound that by the fact that music is not in the same formative, discovery stages that it was in the 50s, 60s and 70s...it's not as open loop, unpredictable and evolutionary as it once was....it's ironic, but if something is harder to get or do, it carries more weight and ultimately aspiration.

Access and instant gratification whether it be from free music, easy visibility of artists, cell phone concert clips on YouTube, to me, is the death knell of the star quality, the aspiration, the need to purchase to learn more....all of this has conspired to turn the business and ultimately the excitement...upside down.

I am not defending you tube, who is the current place to go and rip audio and video, or Lime wire (shut down about a year ago by Fed Govt.). But there is a difference from what a person downloads from them and buying a CD. With you tube, you only get 128 kbps, with MP3's, with the real CD in WAV format you get 1,411 kbps. Listening to a portable device or on a computer, you probably cannot tell the difference.

However, put a song recorded at 128 and one at 1,411 in the stereo in my truck (Eclipse Head Unit, 3 Eclipse Amps and 8 JL speakers) and believe me, there is a huge difference.

I do not fool with ITunes or anything made by Apple, so that is a different situation. Personally, I buy the CD. Of course, I live in the middle of nowhere and the only store selling CD's is Wal-Mart (and they edit), so I have to order them, but the sound quality it worth the price.

Still, if I had a band which I knew could be big, I would be looking for one of Peter Grant's relatives.

bermuda said:

There are some great opportunities for imaginative bands, and they will probably sell a lot less music than tyhe labels would, and they'll make the same money.

But, it won't be much. That's still reserved for the major artists, and it remains to be seen if a YouTube band can become that big.

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I think this was proven viable this year when Macklemore & Ryan Lewis won 4 Grammy's. They never signed to any label (their "label" is Macklemore LLC), independently produced and recorded their albums, and had no mainstream promotion or support at all.

What they had was over a decade of building their fan base (funny given they won "Best New Artist") via social media, Youtube (half a billion views, yes with a B) and the ability to sell on iTunes. They may very well be an outlier but there you have it.

bermuda said:

I should add a projection I've had for a few years. That is, while being signed won't be a big deal anymore, bands will vie for positioning on iTunes, Reverbnation, etc splash pages, and I suspect that a lot of people being ousted from labels will end up working with those online vendors

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Look at what Beyonce did with her surprise album release recently. Exclusive to iTunes for a week and she also bought every slot in the rotating banner on the iTunes home page, which is usually reserved to highlight the new and hot stuff that week from a plethora of bands. She was on all 15 of the banners! She also didn't tell anyone except Apple about it, which pissed off the likes of Target and Amazon when it came out.

Everything is indeed changing and we're only seeing the beginning of people jockeying for position.

shemp said:

Excellent thread and thoughts by all...it's all valid. My perspective on this topic is that the real enemy to sales is "access". All of the downloading and visibility and instant gratification afforded by all of the content websites, including a band's own website, is what has diminished the desire. ... Back when there was no access, you could not learn about or see the maker of the music....the mystery and the desire to learn more led to sales because that was the only way you could learn more.

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I think the access to information is suitably enticing and enhances desire to hear the artists' work. But it's not enough to sell songs when they are indeed streamed via YouTube, on the artists' sites, and in promo videos for the biggest hits on vevo.com (which the labels like to use.)

coolhand1969 said:

I am not defending you tube, who is the current place to go and rip audio and video, or Lime wire (shut down about a year ago by Fed Govt.). But there is a difference from what a person downloads from them and buying a CD. With you tube, you only get 128 kbps, with MP3's, with the real CD in WAV format you get 1,411 kbps. Listening to a portable device or on a computer, you probably cannot tell the difference.

However, put a song recorded at 128 and one at 1,411 in the stereo in my truck (Eclipse Head Unit, 3 Eclipse Amps and 8 JL speakers) and believe me, there is a huge difference.

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The point is, most people will settle for less when it's free.

vitaflo said:

Look at what Beyonce did with her surprise album release recently.

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Beyonce is an artist who'd sell albums with advance promotion or not.

Bermuda

bermuda said:

In the meantime, the money to be made is in live performing, and that's true for the biggest artists as well. Bermuda

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Exactly. That's the way it's been for thousands of years. The recording industry has only existed for the past century - created by the recording studios. The "labels" created the industry. Prior to records ALL music was performed live by traveling musicians. If you wanted to be a professional musician, you had to move around the country, or continent, and perform. We are simply seeing a change in a "modern era" paradigm returning somewhat to the way it began. The lion's-share of money made by "musicians" has always been made from touring. Labels and writers make their money from publishing, and record sales. The distribution network has changed due to the digital era but the large money will always go to popular touring musicians. New artists Macklemore and Ryan Lewis' success was done without a label so,the current system seems like it will still reward those most popular with some level of success, even with downloads and diminishing label involvement.

I get the majority of my music I listen to for free ....... It's called the radio. That's the way it's been since recorded music began. What I listen to electronically (iPad, iPhone, iPod) I purchase on CD. The same as when I purchased vinyl. Remember that when radio began, all radio music was live performance. The record labels/studios put an end to live performance radio for the most part. Current changes are what they are - evolution.

MileHighDrummer said:

Prior to records ALL music was performed live by traveling musicians. If you wanted to be a professional musician, you had to move around the country, or continent, and perform. We are simply seeing a change in a "modern era" paradigm returning somewhat to the way it began. The lion's-share of money made by "musicians" has always been made from touring.

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Way back, the technology didn't exist to allow people to enjoy music on demand. There's not a shift towards touring instead of relying on recordings as a way to make money, although there has been a necessary shift in the perception of those two things in terms of the results.

Also, not every group made money on their tours. As much as being an enjoyable and sometimes unique performance scenario, touring was really just one way to promote record sales, and groups sold millions of them. Yes the rates were lower, but touring was also much more of an expense usually do to extraneous personnel. I'm not talking about Mal Evans handling everything for the Beatles, I mean the McCartneys or Led Zeppelins travelling with a few dozen folks. And tickets weren't $75+, t-shirts weren't $40, so the revenues weren't that huge. Really, many musicians just enjoyed performing, and the spoils of the road. More profits would be derived from record sales driven by the show. Yes the players got piad, they they didn't always get rich. Sometimes their salaries were ab tour expense, and recupable from label support (which was more common 20+ years ago.)

As time went on, bands and their managers began watching expenses, and were able to charge more for tickets, and merch. While travel expenses and band/crew salaries have gone up, touring bands have become leaner and meaner, and are able to keep more of the money that comes in through the doors of the venue.

Simple economics? Sure, but bands didn't always operate that way. "The lion's-share of money made by "musicians" has always been made from touring" was not always true.

I get the majority of my music I listen to for free ....... It's called the radio.

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Radio, and TV, and most of the content on the internet - including forums like this one - are subsidized by advertisers. That's why it's 'free' to the listener/viewer/user, and also why there are more ads than ever before on those media.

When you purchase a recording or video, you can listen or watch without the encumberance of ads. And there's a price for that, just as there's the 'price' of enduring ads while enjoying 'free' media.

There are some services that charge a flat fee for access to music, but the artists still take a hit money-wise. But they're still competing with YT and the like that allow copyrighted recordings to be streamed for free (although many files now have ads, which of course benefits YT more than the artist.)

The more we dicuss this, and with every slight tangent the topic takes, the more it's apparent that the labels haven't done anything wrong, nor can they prevent their plight in the face of artists' music being available for free. It's not that they were greedy (well, not any more than usual!) or that they put albums out with only one or two good songs (that's the artist's fault for having limited writing skills.) If they had reduced their output to only the 'good' stuff, they wouldn't have been able to sign 90% of the artists they did, and those artists would be crying about not being able to get a deal.

But label woes and the internet aside, what has to change is the perception by listeners that music has no real value. After all, they no longer have to pay for it. Until that can be resolved or otherwise monetized - and those revenues sent to the appropriate recipients - it's going to be a problem for artists and writers, and whatever's left of the labels.

Bermuda

bermuda said:

The more we dicuss this, and with every slight tangent the topic takes, the more it's apparent that the labels haven't done anything wrong, Bermuda

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I don't know about "anything wrong". I've worked with people who shouldn't have been on stage due to their "condition", but had to go on due to contracts and touring schedules. Choices, I know. The labels, just like venue owners and professional sports franchise owners are, at the end of the day, businesses. They are businesses created by people to make money and further music - both were accomplished. If one doesn't want to deal with studios, labels or contracts, they can continue to toil until too tired or discovered by someone who will/can help further their endeavor. On the day the studios will do okay. Just like the transition from film to digital photography over the past 20 years, businesses in the industry will lead, follow or go away.

bermuda said:

There's not a shift towards touring instead of relying on recordings as a way to make money, although there has been a necessary shift in the perception of those two things in terms of the results. Also, not every group made money on their tours. Bermuda

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To clarify - I'm not saying there's a return to touring - we (musicians) have always toured. Also, musicians (the people who play drums, guitar....) have always made their "wages" from playing and supporting the lead. Most groups, as you know, unless they are co-writers, producers and/or contractually named principals of the band, don't get record proceeds or royalties. They make their money from touring. Most musicians (again, as you already know) are gigging musicians with only a handful (of the total musician world) who are strictly session or studio players. Many session/recording musicians tour to support a star/lead, although some don't. Even fewer are double or triple scale players who pull in huge money in studio work.

bermuda said:

Radio, and TV, and most of the content on the internet - including forums like this one - are subsidized by advertisers. That's why it's 'free' to the listener/viewer/user, and also why there are more ads than ever before on those media.

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On that, as we talk about the "race to zero" video is a perfect example of how the "race to zero" started before the net.

When songs are played on the radio, the radio station pays a license fee for the song. The fee goes to the songwriter, or whomever the songwriter sold the right to. Established artists can make quite an income off of radio play.

When MTV started, they said they are not paying such fees. Any video played is considered an advertisement for the song.

So band when from getting paid to for radio airplay, to not getting paid for video airplay, and on top it, each artist had to PAY for their video to be made.

Of course for many bands, the cost of the videos and giving away of airplay, paid off in huge album sales. For other bands, the cost of the video ate up any profits.

Which is how we arrived at the mentality that yes, a band makes a video and gives it away on youtube. It's just an extension of how MTV worked.

Although their are obviously big differences, such as it's easy to take the download stream off of youtube and convert to an mp3, by passing the need to purchase the song. And people often post entire albums onto youtube outside of the artists control.

Its such a shame that this is where we have ended up.

Most industries, even those that don't make much of a margin, have found a way to monetise even the most basic of skills. For example what I do for a living I have a basic rate that is simply my salary divided by the number of working hours and then we multiply that by 3 and that is what the client pays. The company would refuse to work for anything less than a 2 multiplier.

Whilst technology has allowed more open access to producing a decent recording, the majority of costs associated with creating music are no lower now than they have ever been. Especially for drummers. It still costs a lot to record with a good producer in a good studio, with real drums recorded, video production, touring costs.

Frightening that we have ended up in a position where even the raw/base cost of a song isn't covered by the methods to montise being a musician.

Even more frightening when you consider the article I read recently on Rhianna's song writing workshops where the cost to produce a hit song for her were astronomical.

After just going through tube strikes here in London, where the rail workers unions ordered a strike and basically ground London to a halt, where are the musicians union here on lobbying for a fair shake for musicians? Surely they could leverage a bit of re-negotiation on behalf of musicians rates here. I notice the MCPS and PRS have seperated again and raised their cut of revenues recently, which means even more loss from musicians pockets.

Given that music is so pervasive and integral to human life, you would think there is a way to switch things around so that people pay for all services, if not the end consumer, certainly the likes of youtube etc.

Also what happens if we ever hit 'zero'. Nobody will produce music anymore!

Diet Kirk said:

Also what happens if we ever hit 'zero'. Nobody will produce music anymore!

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Devoted artists and the 'kids' will still make music, but their expectations about what that entails - and any potential monetary results - will have completely shifted. Unless they're absolutely top stars - such as today's Beyonce, Garth, Justin, U2, Gaga, the other Justin, etc - they'll be at the bottom. Little or nothing left in the middle.

Bermuda

DrumEatDrum said:

...it's easy to take the download stream off of youtube and convert to an mp3, by passing the need to purchase the song. And people often post entire albums onto youtube outside of the artists control.

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That's what I've been saying, YouTube is undoutedly the biggest villain in enabling copyrighted work to be available for free online, apparently thanks to a loophole and silly little discalimer - "I do not claim ownership... " yadda yadda yadda

There is usually a small amount of money that can be made from views, which is paid by advertisers to either YT, or the member who's enrolled in the ad program. Does the artist get anything for those? Not that I'm aware of, unless it's their video and their ad affiliate arrangement and their YT channel. And it wouldn't begin to approach what they'd make if they were able to sell even a portion of the songs that are streamed for free.

The system is indeed broken.

Bermuda