
Can we kill the music business too? - jamesgagan
http://audiosearch.blogspot.com/2012/01/can-we-kill-music-business-too.html
======
daeken
While I think the author's heart is in the right place, I think he's fallen
into the trap that nearly everyone in the music startup industry has fallen
into: the content and distribution are the easy parts, getting people to give
a damn is the hard part.

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.

~~~
nhebb
I think there is a software solution to this problem.

#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...](http://www.npr.org/templates/story/story.php?storyId=113673324)

~~~
waterlesscloud
I've thought last.fm should be an amazing source for recommendations. After
all, they have an amazing database of music that I don't just buy, or like,
but that _I actually listen to_. They know how much I listen to something and
when and so on. That's got to be a great basis for recommendations. And
somehow...it's not. I've often wondered why not.

~~~
geogra4
I think a site that would have a huge catalog of exclusivly non-RIAA music
with a great recommedation system and streaming radio would be a real winner.
I know i'd use it.

~~~
dwiel
Freemusicarchive.org has a lot of good content, and the curator picks help
filter some, but I agree that a recomendation system would make a site like
that significantly more usable

~~~
geogra4
Ideally we'd have an entire content ecosystem that was MPAA/RIAA free. Movies
with cc licensed audio sold for 5-10 a pop through hulu or some other type of
streaming service. This could be sent to people's set top boxes directly,
bypassing the normal gatekeepers of content.

------
jiggy2011
Music is a big cultural thing that people use as much as a method to identify
themselves as a particular tribe (especially young people).

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.

------
joshuamerrill
I would make the argument that the music business—and by that, the author
means "major label" music business—is already being killed, and one can see
its utter demise just by extrapolating the current trend.

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.

~~~
wisty
It's funny you bring up Bieber. He and Lady Gaga are both talented - both are
OK looking (Lady Gaga goes out of her way to avoid clear shots, she's not that
stunning), good singers, good dancers, and reasonably good song writers. They
are good, but I wouldn't call them great. You couldn't seriously compare them
to Madonna and Michael Jackson.

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.

~~~
maigret
I'd say Lady Gaga is clearly at a much higher level than Madonna musically.
Hear her sing with Tony Bennett. Madonna is good at marketing, but did she
write her own music or plays the piano? Behind all the provocation, Gaga is a
talented musician.

~~~
chc
Indeed, and Madonna's greatest genius was in marketing. Her singing and
dancing were both technically mediocre, but she made listening to Madonna
music something cool and fun in young people's minds.

------
loso
10 years ago I was a small time hip hop DJ who did some clubs and radio.
Before I became a programmer, my dream was to become the next Puffy. I studied
the industry big time (reading books, talking to people inside, doing
interviews) and still do. I also worked security for years for the main
purpose of being able to interact with the people behind the scenes (managers,
promoters, etc). So even though I am not an expert, I know a decent amount
about the music industry.

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.

~~~
mikeleeorg
_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._

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.

~~~
loso
Yeah, they are basically a full service marketing firm but they don't think of
themselves that way. I've never worked in a label but I have talked to several
people who have and they think of themselves more as a grooming service. In
other words they prepare the artist on how to be famous as well as make them
famous. Every label thinks they are in the mold of Motown. And if you have
ever read up on Motown then you know that they had very tight control of their
artist. From image, to song selection and everything else in between.

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.

~~~
mikeleeorg
I hope you get a chance to go and do this one day. It sounds like you may be
onto something.

------
nextparadigms
If we do create new disruptive companies in the music industry, can we start
by _not_ owning the copyrights of the artists? I'd like to see this as a
change in the copyright law, but that's probably impossible to do at this
stage, so the next best thing would be a bottom-up movement to _give back_
copyright ownership to the artists.

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.

~~~
joshuamerrill
To be precise, the record labels do not own the copyrights to the songs, but
rather to the specific recordings produced under contract with the artist. The
rights to the song are held by the music publisher, which is often a different
entity.

------
chaostheory
There is one specific way to help bring this about by solving 2 semi-specific
problems that I know of.

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.

~~~
parbo
There are plenty of options for 2), one of them is <http://www.tunecore.com/>

------
EGreg
Can we kill the pharmaceutical industry next? Those patents have got to go!

~~~
nextparadigms
Let's deal with the biggest threats to the Internet and civil liberties first,
which are Hollywood and the music labels.

~~~
mappu
You're picking at today's targets without looking at the root of the problem.
As long as you're thinking big, how about disrupting politics? Build a system
which can't be affected by lobbying.

------
aaronmoodie
I did some work in 2011 with a number of local bands, one of which has quite a
big international following. This band recorded and produced their latest
album themselves, yet despite this, still went to the major labels to release
the album. I asked why they would do this since they own the copyright to
their work and have a large enough following to get the coverage? Because the
major labels still have the promotional might to reach more people. This was
pretty much the only reason.

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.

------
ammmir
production and distribution costs are negligible nowadays. record labels are
marketing powerhouses that can push their product (music and the artists)
through traditional channels like radio, concert tours, and other
partnerships.

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.

------
amirf
It reminds me of an old article I read back when oink.cd was shut down,
criticizing the music industry: [http://www.demonbaby.com/blog/2007/10/when-
pigs-fly-death-of...](http://www.demonbaby.com/blog/2007/10/when-pigs-fly-
death-of-oink-birth-of.html)

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.

~~~
jonathanl
Interesting article, he has a few good points there.

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.

------
logn
I think we have killed the music business. The problem is that there is so
much music we listen to that they own the copyrights to, and will for 70+
years, that we're sort of locked into them for a certain amount of time.

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.

------
generic_b
So, I have this idea I wanna create a prototype for that I think would do just
this. It could either work with the music industry and help make their process
cheaper, or it could even replace it if it ever became popular enough to be
used by main stream artists. This idea is the reason I started teaching myself
some web dev stuff about a year ago. About 6 months ago I got a job at a
somewhat small but completely awesome start up. My thought is that within
about a year I'll understand the full stack enough to make a prototype for me
and my friends, but for this idea (which has been tried before, but failed) to
work I think it has to be slow growing.

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.

------
draggnar
I see the seeds of change in the Hype Machine and Soundcloud, but it seems
right now that they are more for trendy music as opposed to popular music. I
believe it is going to be a slow transformation, people listen to the radio
and the labels work with cable companies very effectively (late night tv etc.)

------
bosonx
Well, I tried something similiar with two friends a year ago. But unlike
songspin we asked every single musician whether he/she's ok with having
his/her music on fill.fm and we also provide links to the stores where you can
buy more of the artists' music and links to the artists' homepages.

------
ayu
I'd encourage you guys to check out artists who made it big without major
labels, like Skrillex. He did everything via the internet, playing shows, and
word of mouth.

------
varsketiz
"If you use their music, EMI will have the power to approve your app, publish
it themselves, and take a huge cut of any profit your app makes. Sound
familiar?" Yes. Replace music with platform and EMI with Apple. Problem?

------
gitarr
As a musician who is sick of the music industry: Yes, please!

(I'm currently transitioning into programming, as I cannot stand the "biz"
part of the "music biz" anymore.)

