Can we kill the music business too?
audiosearch.blogspot.com
audiosearch.blogspot.com
Go to any little venue in NYC and you'll find a dozen talented musicians, many of them with very well produced albums already; the talent is there, the production is cheap as hell these days, it's simple. So you start an online label, you aggregate this content, you make it available in various forms for various prices (including free) and you have... nothing. Content is worthless without eyes and ears.
The hard part in all this is getting it in front of users, and getting them to care about the music. The major labels are fantastic at this: they get radio stations (which they control) to hype them up; they run ads all over the place; they put on massive tours and make the consumers a 'part of the music'. How are you going to compete with this? If you can answer that question, you win; nothing else matters.
Not really. Consumers don't have a clue who the labels are. The labels are great at building brand loyalty for the artists.
There's two horizontals - the promoters (Twitter, Facebook, Youtube, MySpace, etc) which let artists connect with fans, and producer/distributers (Amazon, iTunes, indie labels).
You probably won't build a vertical that does both well, like the big labels.
The distribution and production is a solved problem. You won't distribute better than Amazon, and an indie producer will produce good and cheap records in an unscalable fashion.
The promotion thing (getting kickbacks from ads?) is social media. What do the artists need? What do the users need? And how can you do it better than Twitter?
People listen to the artists they hear 20 times a day during their commute.
It will be interesting to see what happens when something like Spotify or Pandora is widely available in-car.
In a way, it makes sense to try to beat the music industry first.
The cost of data on the cell network would be covered by "radio" advertisements. But the device would of course have extensive caching of audio on the device. Now you have a whole new band of "radio" and can show off those talented musicians.
Instead of grafting an old idea to a different platform ("faster horse"), make something that works in the world where mobile operators are just dumb pipes providing access to the internet.
Remember the XM radio portable devices? They have since stopped making them. It makes sense. I can listen to XM on my phone or laptop and I don't have to worry about signal issues.
So, you're saying we're in the short window between when they stopped making them (a few weeks ago?) and when they no longer sell them?
Most people that I know that had any of these devices (including me, mines in my closet somewhere), have stopped using them. Not to mention the fact that the merger between XM and sirius messed up many of the channels and functionality.
Since most of the profit in the music industry now comes from touring, the labels are trying to get a piece of the action with so-called "360" deals, which promise them royalties from tours, merchandise, and more. But for the most part, touring and recording are not integrated businesses.
#1: A Recommendation Service: You know how Amazon will list "People who bought this, also bought these ..."? The problem with these recommendations is that people may have bought other items, but you don't know whether they actually liked them. I envision a music recommendation service that lets people select mainstream music they like and recommends indie music they might like based on user ratings.
#2 Music Analysis: There are already software tools that can predict hit songs [1], so why not take the idea a step further. Let users select a number of songs they like and build a profile of their tastes. This would predict new music they would like before it built enough critical mass to be in the "recommended by others" section.
#3 Talent Gamification: Think you've got American Idol potential? Submit your audio clip to the service get user ratings (and possibly software analysis). Do head to head match ups, clip of the day, or some other tactic to get people's interest and keep them coming back on a regular basis.
None of this is easy, but I definitely think the potential is there for a disruptive software solution to the major record labels' stranglehold on the music industry.
[1] http://www.npr.org/templates/story/story.php?storyId=1136733...
For bonus points, this should also work for films, books, etc.
PS: I blame Video games and DVD's for sucking up a lot of the disposable cash flow from people who buy music. Digital content not degrading over time and forcing people to buy yet another copy of the same thing. And piracy destroying the idea that music has value. You used to see CD's with the sound track for a movie selling for just as much as the DVD it's self which is crazy.
In many ways this is more important to many people than the actual music itself (even if they might deny such a thing), this is why certain musical acts become almost like rallying banners to certain subcultures (Bob Marley , Slipknot , Marilyn Manson and Eminem are examples of this) these acts are almost deified by their respective fanbases. Music celebrity culture is a very important part of every musical genre.
So simply providing a large library of great music is not always enough, many people don't actually want to sift through music catalogs to find something they personally like, they want to listen to what their friends listen to so that they can go to the shows together and bond over the music.
For example , if you talk to a bunch of teenage metalheads and many will insist that is is the one true genre of music and will not admit to listening to anything else even if they might enjoy it , lest it make them appear outcast from their hurd.
This is where the marketing is important , I would imagine that small minority of acts make up a huge percentage of actual music purchased. People want to listen to bands that have the money to put on huge worldwide tours so that they and their friends can attend.
I'm not so sure how an indie music startup could create such strong emotional attachment to the artists, the way major labels can do this is taking the right for the music in exchange for an advance and doing aggressive marketing of a small number of acts.
I suggest three reasons why this is true:
1. There is little or no profit in the major label business anymore—certainly not for the artist, and rarely for the label. I believe this is because of the fragmentation of entertainment, failure to embrace new technology, and many other trends. Regardless, this has led to consolidation over a 20 year period, where six major labels became just three (today Sony, Warner, and Universal). And revenue has declined from $15 billion annually at its peak in 1999 to about $6.8 billion today.
2. The music industry failed to see the value of the Internet in music distribution. Once piracy became rampant, the music industry essentially signed control of distribution over to its one credible savior, Apple (and now, to an extent, streaming services like Spotify). The net result is that the industry has little control over the price of its product, and little connection to its customer. iTunes dominates.
3. Home recording technology is getting better and cheaper, and distribution is easier than ever (recall that Justin Bieber was discovered on YouTube). While this may not have made a meaningful impact yet, it is easy to imagine that it will over the next 10 years. I can already point to several artists, like Brad Sucks (one of my favorites), who are taking advantage of this.
In short, I don't think we need to change the status quo much at all. The major labels are on their way out.
What they are absolute geniuses at is PR, which should be the label's job. Michael Jackson got a similar amount of media attention to Lady Gaga, but it tended to be negative.
The musicians are already starting to do the label's core business (promotions) for them.
First of all I see some talk about how you can predict a hit. No, you can't. You have basic formulas that you know can do okay but a hit is usually a surprise. No one could predict Adele would be as big as she is now. Her first album was very good but it did not pick up steam in the US market. Lady Gaga was bounced around as well. She was almost dropped from her record label until Akon picked up the slack and was able to do something with her. Basically what I'm saying is that after something is made you may be able to tell that it is going to be big but you have to craft it first. While crafting it, you are not going by formula but what feels right. You don't know that it is going to be a hit while you are making it.
Second, you have to understand the record label model to be able to disrupt it. The point systems, mechanical royalties, publishing, different rules for selling overseas, etc. This is what the labels are good at. This is the moat to their castle. In the past, (before around 2002 or so) record labels would put out a bunch of artist and see which one stuck. They would lose money on 80 - 90% of their artist because all they needed was one or two to make it big to make their money back. Minor artist would also be able to make the label profits through the use of singles. But the record labels gave up the singles model for the larger profit margins of albums. Now it is different.
Now they have to be real careful who they put out. The profit margins are a lot thinner now than what they used to be. Piracy is one reason but a bigger reason is the more places for people to be able to spend their disposable income. The record labels did not make a pivot to change the way they did business when the economic problems hit. Instead the industry shrunk down and now we have less labels. But they are still doing business in the same fundamentally screwed up way that they did in the past. In their mind, why change something that has worked for over 50 years. Think Kodak and the reason for their recent bankruptcy.
The one thing they did change is how to make artist pay more for the squeeze that the record labels are feeling. New artist these days have to bring to the table a built in fan base. The label then will try to expand that base. For the most part, if you want to be signed to a record label these days then they have to know that you have a track record with fans. Take an artist like Whiz Khalifa. He already had a big buzz when the record labels signed him. He could have made a lot of money staying independent. But most artist want the international fame that accompanies the major record labels. So he signed with them so they could push him internationally. In the past having a buzz would help you get signed but it was not the only factor. Now in most cases, you HAVE to have a big buzz.
The labels are also making the artist pay more in a new type of deal structure. This signing is called a 360 deal. In the past, the deal basically was that an artist would receive a (relatively) low amount of points on a record put out. This is especially true if you were a new artist. But it didn't matter because if the record did well they could tour off of it. The tour and merchandise money was basically the artist only. This is how they would get rich. Now record labels have made sure they get a part of that money as well. A 360 deal makes an artist have to cut the record label in when it comes to merchandising and tour money. AND they still get low points on the album. You either accept this new industry practice or you do not get signed.
The record labels are ripe for disruption. New artist are available all of the time. But you not only have to study what the labels got wrong, you also have to study what they got right. First, musical talent is only part of the equation when it comes to selling music. People have to be personally invested in the artist. They have to like them and think that they know them. Record labels are experts at this. An artist either has to relate to the consumer or the artist has to be someone they idolize. Think of it like the Fanboy trap that we see when it comes to tech. Go to any gossip blog site. People argue about the artist as if they know them. Some people love them for no reason and others hate them for no reason. But the key factor is that they love talking about them. So if you build software to disrupt the industry, this has to be in the equation. Your service has to allow people to have a personal connection with the artist. None of the music services now do this. They let you listen to the artist but the connection is already built in from somewhere else. I would say the best right now at doing this is Youtube. But even Youtube could do a lot better job of it. MySpace was kinda on the right path but bad design decisions killed that.
Second, a new service to disrupt the industry would also have to think about the people who make the artist what they are. The stylist, the make up people, the manager, the promoters, the background singers, and etc. An artist is a package. And you would have to allow for that package to be dealt with in a new disruption model. The record labels feed a lot of people and a lot of those people are vital for a record and an artist to be pushed.
I have a lot more that I have to say about this subject but I have already built up a wall of text so I'll cut it here. I'm a little bit passionate about this topic because I have seen for years how the label system screws both artist, DJ's and fans. They need to be brought down and brought down hard but it will not be easy. The one thing that you will find is that most artist have no business sense. They want to be able to create and that's it. We see this line of thinking with some software programmers as well. But programmers usually keep a steady job. Most artist have a short shelf life. It's not until they are broke that they realize how they have been screwed. Before that happens though, they love the industry.
I also used to voraciously consume endless books about the business side of the music industry, specifically the legal and marketing side of things. I imagine there is still a box full of those books in extant at my parents' home. I too had aspirations of becoming a mogul in the mould of Combs, so I wonder how many there are of us whom had these aspirations and are now hackers?
BTW is your name a hat tip to the rapper Fabolous? I ask because you joined HN around the time of Loso's Way.
http://music.google.com/artists/
From what you said the labels are already killing themselves by raising their own commissions and by demanding an artist already has a big fanbase. If a lot of artists have to get to that point, some of them might realize they don't even need a big label to make them more popular, and will just look for tools and services for self-publishing like Youtube and the Google Artist Hub.
Whatever service tries to bring in independent artists, it has to be easy to use. A lot of artist loved Myspace because it was easy to upload music & videos. It was also easy to engage your fans. To them it was ugly but it got the job done.
Though it may not seem like it, the music industry is way behind when it comes to tech trends. At least in Urban music. While I'm not as well versed, people in EDM seem to be pretty tech savvy. In the Urban block, Blackberry's were still the most popular phones until about the end of 2010. Many in the industry considered both the IPhone & Android a toy. So any tech aimed at them has to be simple. For every artist who has mastered using Ableton or Cubase there are ten more who think using Fruity Loops is like launching the space shuttle.
I don't think anyone has come close to replicating this since. I'd love to see someone take MySpace, wipe the slate 95% clean and make it deeply artist-centric. Hell, integrate it with Facebook. But make it the central hub for a musician to post news, videos, music, etc.
I thought that this would happen when the group including Justin Timberlake took it over, but so far no dice...
When I read this, I thought of VCs and how they'll back many promising startups in the hopes that some percentage of them will generate significant returns for them.
To distill down what you said, would it be accurate to characterize record labels as sort of a marketing agency for musicians, where marketing means branding, positioning, promoting, distribution, public relations, community building, etc?
And that instead of a musician hiring such a marketing agency, these agencies offer their services for a (massive) cut of the musician's earnings?
I ask because it feels like some music startups are in a good position to do this, such as Topspin and Bandcamp. At least, they have the start of a distribution system and some primary promotional features. The whole brand image thing doesn't quite feel like their forte, but they could certainly try adding that too.
To top it off, these startups could build a marketplace of service professionals that help musicians with stylists, managers, promoters, background singers, etc.
The difference between these startups and record labels is how their technologies to allow them to scale without constantly increasing their cuts from musicians' earnings.
Just thinking off the top of my head.
I think that any model that handles the X Factors easily for artist would be the one to beat the record labels. I have a bunch of different ideas in my head competing with each other on what would be the best way to do this. I'm still lost on what is the correct one. I just know that it can be done.
Which may be perfectly sound (no pun intended) advice for anyone trying to do a startup related to the music industry, but it has nothing to do with disrupting it.
Disrupting the music industry would be taking all of that unsustainable crap that turns the artist into "a package" out of the equation, not perpetuating it.
Also why is calling artists a 'package' disrupting? I agree they are people. But when I want to listen to Led Zeppelin, I don't think about how I want to listen to the musical contributions of Robert Plant, Jimmy Page, John Bonham, and John Paul Jones during their career together. No, I experience them as the musical whole. I think that's all he means.
Disrupting the industry in my view means separating that stuff from the production and distribution of the actual music, so that those of use that wish to make and/or consume music are not forced to sustain and entire industry we neither want nor need, and has fuck all to do with music.
That BTW doesn't mean I don't recognize an act like Lady Gaga as a legitimate artistic and commercial product, I just think that it belongs in an entirely different industry where music is secondary. One most musicians wouldn't want a part of if there were other options, and most music lovers don't want to pay for (because most of the money you pay for "legal" music goes to that industry, not the musicians who's music you actually want). Making that happen is the disruption consumers and musicians are waiting for.
I worked with a group of really great people who strove for innovation. However the tendency is still to mine the past for as much as its worth until there is nothing left to mine.
Try this thought experiment: take the earnings from any of the labels and see how much is from catalog vs new signings, and how much was spent to market catalog vs new signings.
Basically wmg would be in a better place to just shut everything down except Rhino and Chappell and ride out their mechanical and publishing contracts to end.
Corporations owning the copyrights have created this terrible incentive for them to try to extend the copyright perpetually every 20 years. I'd like to see the copyright terms be reduced to the original 14 years, too, but I'm not sure that's possible without changing the copyright laws first.
So let the artists themselves keep the copyright, and your label only gets to "license" those copyrights for the whole period of the contract, so you can promote and sell their music. You should also give them like 70% of the revenues, or more if possible. All these should be competitive advantages over the big labels.
The duration of copyright is defined by copyright law, so yes, reducing the length to 14 years will require a change to copyright law.
I think that Lessig had a more politically viable solution - you can have a long time but you have to pay a nominal fee every so often. For example, you can have 100 years, but you have to pay $1 per work at 20, 40, 60, and 80 years (not Lessig's exact proposal). Note that this also addresses the "who owns it" and "what is protected" issues.
We might see it as a revenue proposal though.
1) I and a bunch of people I know love to post personal videos with music overlaid on top. Anyways I'm not sure when this started, but Facebook now checks the songs that accompany video uploads. (As an interesting aside, these vids weren't public; they were only shared with friends or friends of friends.) When it feels that it finds a match, it either disallows the video upload or it just kills all the sound. If there was a service sold mini-licenses for (indy) songs to normal people for use on Facebook, that would be great.
To get to the point: This would be a great way for people to hear new music, especially if the video had the name of the artist and song.
2) I'm not sure if this exists, but I remember hearing that you need a record label to get your music published iTunes. It would be nice to have a easy and cheap intermediary that acts as a record label to iTunes and feels like an App Store for developers to the actual bands and artists.
It was really interesting having an insight to the process as the band went along. I think I was most shocked at just how behind and locked in tradition the major labels really are. This was most evident in the actual release of the album. As I've mentioned, this band had recorded, produced and had artwork done when talks began. Despite this, the labels wanted to wait 4 months, 4 MONTHS, before releasing the album. Obviously, you can imagined what happend. The album ended up on torrent sites 2 months before it was released.
It's exactly this sort of unwillingness to change and adapt that has been undoing the major labels. The whole point of a digital file is that is can be distributed the second is it ready. If a digital version of the album had have been made available immediately, I sure a lot of fans would have bought it straight out. Instead, they get impatient and use a torrent site resulting in a loss of sales.
The main thing I took away form the whole experience is where we need to focus in order to remove these fools from the game. The music industry no longer has room for three players. Where once it was the band, label and fans, now it's just the bands and the fans. Major labels are only still relevant because they can offer something that the current suite of online tools can't, publicity. Work out a way to crowd source that, and bands will have no desire, or need, to approach a major label.
Just as a farmers market fosters and nurtures the relationship between producer and consumer, so to does the music industry need such a 'market' to foster direct relations between band and fan.
independent artists have a harder time since there's no equivalent marketing vehicle for discovery. and many don't have a chance with the major labels since not every artist has the labels' definition of mass-market appeal.
some of the smaller labels (at least in EDM) are more forward-thinking and push out music via podcasts, exclusive tracks on social networks, etc. but it's not solving discovery: finding great music from artists i've never heard about. once you have that, you can start building artist-specific apps and so on.
related: i'm building a minimalistic music player (for Mac initially) that helps you make playlists from SoundCloud tracks and other sources. if you have suggestions about the discovery angle, i'd love to hear them! email in profile.
I don't like labeling the whole SOPA case as "Hollywood vs. Silicon Valley", but in a way Hollywood is like the major record labels. However, I'm not sure it's a dying industry.
This is exactly where entrepreneurs and innovative startups can come in and help those old industries adapt to a not-so-new reality through advertisements, accessibility, convenience, etc.
I think Louis CK's workaround is also interesting (https://buy.louisck.net/). Instead of trying to make his performance video unhackable, he set it at a price low enough to not be worth the effort - and his sales soared through the roof.
But the future is micro labels, digital distribution/sales via Apple/Amazon/Google/eMusic, music videos at YouTube, publicity via Pandora/Spotify/LastFM, PR via Facebook/Twitter, shows with indie ticket sellers, t-shirts with Zazzle, etc etc.
If some of you guys come up with some baller distribution software in the meantime, that would be awesome, but if you want to kill the music industry you've gotta go way deeper than music distribution. This article is interesting, but I think it's only thinking about the problem in a superficial way, folding already existing technologies into the strategy. This is the internet guys. It's brand new. There are so many great possibilities that haven't been realized yet that it's almost insane to do something that someone else has done before. Sound Cloud allows people to share their own music, that's a good start and as far as I can tell they're doing well with it. I kinda feel like people here are arguing for a slightly different version of that. In my mind, that's wasting time. I have my idea, but I'll bet some of you can develop a different or maybe even similar but better one if you push yourselves so I don't wanna taint the idea pool with my specific plan.
If your idea is to take an existing structure and make it more social or something, that's an ok idea but it's not very innovative. You should think about what is not being done with music and artists at all right now. Then go with that. New is good, and exciting and on the internet it's easy to convince people to spend a few minutes checking it out. Then it's just gotta be cool enough to convince them to stay and signup.
Another good strategy is to take something that exists right now in the real world, that people are familiar with, and make an online version. There are so many possibilities to do this right now that it seems silly to me that companies like google try to create their own social network. Although I get the appeal of owning all of that freely given demographic information.
Anyway, just some ramblings. I'm obviously new to this stuff so maybe I'm retarded. But I thought I'd try to stimulate some fresh ideas if I could.
(I'm currently transitioning into programming, as I cannot stand the "biz" part of the "music biz" anymore.)