Next Up To Ditch Record Label: Madonna

from the quite-a-week dept

Thu, Oct 11th 2007 2:51am — Mike Masnick

It's been quite a bad month for the record labels, huh? Kicked off by Radiohead's ditching record labels in order to embrace the new business models that the record labels insisted were dangerous to the industry. In retrospect, it looks like they were just dangerous to the record labels (gee, who could have predicted that?). The latest huge name to ditch a record label appears to be Madonna, who is apparently signing a huge deal with a concert and merchandise promoter instead for over $100 million. She'll still be putting out albums through the promoter rather than the label. There's no indication if she's going to use this to free up some music, but the point should be pretty clear. The money is in concerts and merchandise -- the stuff that the music makes valuable -- not in the music itself. While EMI's new owners have made some noises that maybe they understand what's going on, there's a good chance that it's way too late for the old labels. They had their chance to embrace fans, new technology and the music itself -- and they spent 8 years suing the fans and the technology instead. It's reached the point that college kids are now organizing to protest the RIAA. It's becoming increasingly clear that the labels weren't helping musicians very much either -- and now it appears to be payback time. This isn't the "fault" of piracy. This is the fault of shortsighted recording industry executives who had every chance to understand the economics at play and instead chose to attack everyone (and there were lots) who pointed out to them where the market was going.

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Filed Under: business models, labels, madonna, music
Companies: warner music group

39 Comments

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Mike F.M, 11 Oct 2007 @ 4:18am

You love it.
You just Love it when you're right, don't you Mike.

It's brilliant to see such names going their own way instead of being led there by record labels. It's the only way it will evey really change.
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Sol, 11 Oct 2007 @ 5:03am

Booyah!
I've read almost all of your articles and had to explain the "new business model" several times to friends and other people I argue with about this topic. I love the new business model and it totally MAKES SENSE! Pure an simple.

Keep up the good work.
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Tom S., 11 Oct 2007 @ 5:30am

What about upstarts?
It still remains to be seen how this new business model will work with unknown artists. How will these groups market themselves without the record label's dollars?

Don't get me wrong, I hate the RIAA and it's tactics, but at the end of the day the record labels do put up the dollars to promote and produce new talent. How is that role going to fit in this new model? Time will tell.
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rhsc, 11 Oct 2007 @ 5:42am

Re: What about upstarts?
There have been several bands that have risen to popularity of varying degrees through other media, such as myspace and youtube. A world without record labels will probably just see this occurrence more frequently
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Andrew Wise, 11 Oct 2007 @ 5:49am

Artists Can Succeed without Record Labels
What I would like to see a push in is artists working with lenders to get the types of loans needed to create and market their music.

Currently the record labels main benefits are their 1) big advances 2) marketing power

And now as the ability to market yourself on a large scale without a huge budget is here, artists do not need that much from major record labels.

Granted, if the artists can't get the loans they need, etc. and do not want to undertake the marketing themselves, I think we may see a big push for artists to sign with Independent record labels OR marketing firms wherein the artists can keep their masters, but still get the support they need.

Everybody wants to be the next Britney Spears, but I think it's fine time artists treated this game like the college athletes of the world -- get your degree, and then try your game in the pros, because if you still own your masters (see the degree analogy), you can continue to support yourself ...and your subsequent huge rockstar family.
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YouKnowNothing, 11 Oct 2007 @ 5:49am

Re: What about upstarts?
I can name two such "unknown" bands who have established themselves through youtube and myspace and other social networks: Arctic Monkeys and Gnarles Barkley. And I'm not even a fan of either of those bands.

Another one that might soon break out soon in a big way from this method is Tiger Army.
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Chris S., 11 Oct 2007 @ 5:56am

Re: What about upstarts?
The older artists will work with the newer artists and help promote them as they do now. Many a times at concerts you will find no named bands starting the show. They will get a few songs in and then the "Stars" will finish.
Tis quite possible, with many other bands creating their own record labels and being fair and just, they may take in these new bands and do for them what the "Big Labels" did for them, but be fair.
Time will tell, but be it Rock, Country or Pop, most who actually are true artist do it for the music and not only for the money. As optimistic as it may sound, I think the real artist will bring the newbies to light for others to hear.
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Laughing with Mike, 11 Oct 2007 @ 6:03am

Record labels will still be the venture capitalists in this industry. My fear for the musicians is the labels will start demanding a huge slice of the concert and merchandising proceeds in exchange for 'underwriting' a band. I fear musicians will get trapped into one-sided agreements similar to today's recording contracts.
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Overcast, 11 Oct 2007 @ 6:10am

Well, heck - all they need to make is like 25 cents a CD, right?

With what the recording industry pays them - charging 25 cents a song would make them much, much more money.
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Rob Blatt, 11 Oct 2007 @ 6:18am

Re: Artists Can Succeed without Record Labels
The problem there is that you left out distribution. As an indie artist it's really hard to get your discs as far and wide as necessary in order to gain notoriety wherever you want to play shows. I don't see CD Baby or iTunes as being nearly as good for artists as having your CD being on an endcap in Target, Best Buy, WalMart or even Starbucks.

Also - marketing power is important. Yeah, artists liek the Arctic Monkeys or Gnarls Barkley got big on MySpace, but only after MySpace noticed that they could make money off of those artists and MySpace acted as the record label for them.
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TheDock22, 11 Oct 2007 @ 6:38am

Re: Re: Artists Can Succeed without Record Labels
Who are Gnarls Barkley and the Arctic Monkeys? I've never heard of them.

It is good to finally see a big name ditching the record label though. I truly hope it works out for her, because if it doesn't I think the movement will end with Madonna.
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Jack, 11 Oct 2007 @ 6:43am

When you desert, don't value, and downright abuse
Very well said.
In the 1970's, when the Cassette Tape came out, people were called "tapers". The Grateful Dead embraced the tapers, but set ground rules....they set aside an area for people to tape at concerts, but the people couldn't bootleg or resale. What they created was a fiercely loyal following, that earned them millions in.....CONCERTS AND MERCHANDISE. The Dead was second only to Elvis in Merchandise sales.

Had the labels and RIAA embraced the new technology 7 years ago, bought Napster and made it easier for fans, they would have won a loyal following. Now with their treatment of people and lawsuits, I'll never spend another dime on a cd. I'll do without. My money will never go to a record label again. I used to buy a cd on payday as a "treat", and would gladly have spent the $15/month for a subscription to get whatever songs I wanted vs. $15 for 1 or 2 songs and 12 I didn't want. Whether I like Radioheads music or not, I'm buying their new album to support their spirit and initiative.
There are employees within Universal that download songs AT WORK and strip out all the codes and tags to use for their own purposes. The RIAA is corrupt, greedy, and amazingly short-sighted
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Brian, 11 Oct 2007 @ 6:46am

Re: What about upstarts?
Colbe Caillat is another example of an artist who hit it big through self-promotion online. She went from being an unsigned singer with a popular Myspace profile to having a top 5 debut album on the Billboard 200.
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Matthew, 11 Oct 2007 @ 7:18am

Re: Re: Artists Can Succeed without Record Labels
The distribution is digital, the WWW reaches everywhere. With a website fans can get music, order T-shirts & other swag, and follow their band anywhere they are connected.

artists liek [sic] the Arctic Monkeys or Gnarls Barkley got big on MySpace, but only after MySpace noticed that they could make money off of those artists and MySpace acted as the record label for them.

EXACTLY!
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Zin, 11 Oct 2007 @ 7:29am

Not the end of labels
Sure, this may signal the beginning of massive change for the big boys, but don't overlook the fact that in the past 5, 6 years there have been a number of nimble, tech-friendly boutique startup labels that are working with both new and established artists. The industry will always be there, just perhaps in a slightly altered form, with new names.
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John, 11 Oct 2007 @ 7:31am

New Artists
Maybe rather than depending on the records to launch new artists, some of the bigger name artists could drop the cash to promote an up-and-coming band that they like, or even offer the new band's track along with their own. They'd be sort of acting as a promoter at that point, and it could potentially open up interest in both bands.
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Chronno S. Trigger, 11 Oct 2007 @ 7:51am

Re: Re: Re: Artists Can Succeed without Record Lab
Not a fan of Gnarls but I do like the Arctic Monkeys. I recommend looking them up and seeing for yourself. I also recommend looking up Shiny Toy Gun. I know I said that before, but isn't that the point of this new model, word of mouth.
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bodiby (profile), 11 Oct 2007 @ 8:32am

Gnarls Barkley picked up on the buzz created by Danger Mouse (half of Gnarls) with his "Grey" album. The Grey album takes Jay-Z lyrics from the Black Album and lays them over samples from the Beatle's White Album. The resulting mashup was highly popular, but EMI tried to stop it because they "own" the White Album. They failed and it can be found all over the internet.
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Anonymous Coward, 11 Oct 2007 @ 8:37am

Perhaps not directly related, but I'll point out Maddox's website is one of the most popular around, and he's never once paid for any form of advertising. All links to his site are put there voluntarily by other websites, and he's been promoted pretty much entirely through word of mouth.
I can't see why a truly talented band wouldn't be able to do pretty much exactly the same (albeit with a slightly higher cost to begin with, what with the cost of hosting their site and MP3s / paying someone to make the website for them). It'll just take a while.
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Anonymous Coward, 11 Oct 2007 @ 8:49am

All I can say is BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
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robert, 11 Oct 2007 @ 9:11am

Re: What about upstarts?
It's very simple actually but it requires bigger bands to step up and help smaller bands out.

When a popular band goes on tour they take lesser known bands with them. There needs to be some sort of union or group that unknowns join and allows bands to team up to create tours and shows based upon style popularity cost that sort of thing. Now the person in charge of the tour is in charge of discovering new talent
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Anonymous Coward, 11 Oct 2007 @ 9:39am

'Siging' a music deal? Spell check buddy...especially the highlighted words!
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Niftyswell, 11 Oct 2007 @ 9:46am

Wanna bet
In the future they will be handing out memory sticks with complete albums on them just to get people to listen to the music. They will be offering free stuff with their albums just to get people listening to the new music. Last movie I went to they included a mini-cd of hip hop in the lid of the drink I bought...just to get me to listen to the music and it just made sense. Of course, the movie I went to was The Simpsons that I just HAD to see in the theatre after downloading it. :) I threw it away because I don't like hip-hop but if it had been my genre I would have popped it in my cd player. Once they get you listening then they get promotion deals worth way more than any other income they rake in.
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deadzone (profile), 11 Oct 2007 @ 9:59am

Finally..
Looks like we are finally turning a corner on this thing! Once it is fully realized that the RIAA is not needed to move forward, I think we will see some big changes. The artists are the ones that really need to wake up and take notice of what's going on around them. The artists are the ones that truly hold the power, not the RIAA.

As consumers I think most of us can agree that we still want the music that artists produce/write/etc... We just want to be able to have the freedom to consume it in a reasonable and economical manner.

The days of the 15 to 20 dollar CD are long gone. Now it's all about digital and MP3 players and convenience. This medium needs to be embraced fully by everyone on both sides and we need to move forward and come up with a strategy that is good for everybody involved.

Essentially -

Reasonable Fair Use Rights for the Consumer
Unencumbered Media (No DRM basically)
Reasonable Pricing
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ehrichweiss, 11 Oct 2007 @ 10:08am

Re: What about upstarts?
It'll work with the power of the internet. Porn is everywhere and you don't have to go looking too damn hard to find the stuff you like and I suspect that once music is freed, it will be the same way.

How about Beatallica as an example of this power? They got quite popular even before the lawsuit and they weren't even trying to sell a CD(they were mp3 release only when they began).
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ehrichweiss, 11 Oct 2007 @ 10:10am

Re: Re: Artists Can Succeed without Record Labels
No worries about distribution. Just put music on all the torrent sites. You'll get more exposure than you'll know what to do with.
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Arochone, 11 Oct 2007 @ 10:15am

Re: What about upstarts?
"It still remains to be seen how this new business model will work with unknown artists. "

Umm...you don't come here often, do you? This is the first one of these stories I've seen on here that didn't point out how people had always said 'it'll only work with small bands' and how it has been successful for both.

Look at the recent success of the song 'Groundhog Day' by the band Mayday. I first heard it on the radio actually, liked it, so I looked up the band. All the popularity of that song basically came from Youtube, overnight. Though they do have a record label (an independent one), their success story wouldn't be too hard to pull off without one.
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Nick (profile), 11 Oct 2007 @ 10:30am

Required reading from years ago:

Steve Albini: The problem with Music
http://www.negativland.com/albini.html

Courtney Love: Courtney Love Does the Math
http://archive.salon.com/tech/feature/2000/06/14/love/print.html
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Tom S., 11 Oct 2007 @ 10:40am

Upstarts
Using an alternative business model "can" work for exceptionally talented musicians. This is not who this new busniess model will hurt. This new business model will hurth the 'rank and file' of the music industry.

How does the rank and file musician obtain recordings that people want to listen to? Cost being the biggest factor. All the pie int he sky senerios listed here are NOT better than its current iteration: get a loan? Have another artist sponsor you? Get famous on Youtube? None of these options help the middle-class musician.

Record companies, like em or not, liten to your mediocre recording, sign you to a deal, front you a bunch of cash, put you in front of top notch producers and sound engineers, dress you accordingly so you CAN be marketable. They take all the monitary risk hoping the public will buy the music.

Seems like this new model would create a lot more STARVING musicians, as well as them being bankrupt.

Again, don't get me wrong. The RIAA are a bunch of tards and the music industry should disband the organization for what amounts to extortion. But someone wil need to fill this void or our music choices will be very limited until this new model comes of age.

BTW, I actually come here a lot.
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Anonymous Coward, 11 Oct 2007 @ 10:47am

Tom. S:

So basically, you're arguing that this new business model will get rid of bands/musicians that are only making money because producers are throwing money at them and marketing them, not because they're actually good?

Why exactly is this a bad thing?
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Chris Maresca, 11 Oct 2007 @ 11:00am

Re: What about upstarts?
I'm on the board of advisers of a small company called IndieMarketer (http://www.indiemarketer.com/), a DIY marketing tool for bands. Tools like this, and outlets like CDBaby, plus things like MySpace and YouTube can large supplant labels marketing dollars.

Besides, it's not like labels actually supported artists. They basically won't touch you if you don't sell more than 500k records. And that includes really well known acts like Johnny Cash, who couldn't get a label to sign him for years.

Chris.
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Tom S., 11 Oct 2007 @ 11:02am

Re:
Because that will severely limit my choices. Also I fall under that catagory, I make money selling my music, mind you it's not great music. But I make a living. The new model puts ALOT of people out of work.
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Anonymous Coward, 11 Oct 2007 @ 11:26am

Re: Re:
"The new model puts ALOT of people out of work."

Does it? Don't suppose you can actually back that claim up now can you?

Thought not, but you can keep talking out of your rectum and maybe someone will actually listen.
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Wildo, 11 Oct 2007 @ 11:50am

Re: Re:
Make better music.
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YouKnowNothing, 11 Oct 2007 @ 1:23pm

Re: Upstarts
I'm all for getting rid of mediocre musicians and prefabricated, sanitized, "marketable" pop acts. The less we have of them, the better. That's the major problem with music nowadays; too much crap.

If you're not very good, then get better or die. Leave the creation of music to the real artists who can actually create great music, not the marketeers who create banal, insipid pablum to try and make as much money as possible.
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Tom S., 11 Oct 2007 @ 2:15pm

Re: Re: Upstarts
I am with you on that. Problem if we count the "super-groups" out today, there are what?.... 20? 30? total. That's gonna make airplay very boring. Truth is, the greatest majority of music is mediocre. Just listen to the radio, there is 2 or 3 good songs an hour, the rest is filled with the rank and file.

It's real easy to say, "make better music". But the reality is completely oposite.

I want to re-iterate: I am fully against the RIAA and all they stand for, I just want to make sure the colateral damage created by Radiohead's distribution model does not destroy the very people we are trying to empower.

Say it with me: un-intended consiquences.
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4-80-sicks, 11 Oct 2007 @ 2:59pm

Re: #36
Tom,
I'm sorry if it hurts you, but do you honestly accept sympathy for being cut out of the business for your "mediocre recording"s, in your own words? You said yourself that there's 2 or 3 good songs an hour on radio, and the rest is "mediocre," "rank and file." Do you want to contribute to that? Why? Your argument is a perfectly contained oxymoron.

I have already long felt that my music choices were limited, precisely because there's very little worthwhile on the radio. So I have stuck to lesser known acts. I buy their CDs from their websites, directly from the creators. It's great for both of us. I may not get the immediate gratification of walking into a store, but I get just what I want and the middleman is cut out. I love it and they seem to find it a fine business model. Some were on labels before, some were not. And yet, yes, somehow, I still found out about them and became a fan. I know it sounds impossible, but it's not. Some bands also use small distributors to get CDs to stores that have the balls to independently choose what music to carry.

You've got a few choices:
Join the long tail
Become as "good" as Britney Spears, et al, get a deal with Big Five
Play coffeehouses and cafes
Stop making music

If you will continue to insist that mediocre music is a necessity, I'm happy to accuse you (along with big labels) of polluting the cultural landscape.
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DJK, 16 Oct 2007 @ 7:20am

Music
Long Live Martin Sexton and Kitchen Table Productions!!!!
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Hillary, 12 Oct 2008 @ 7:21pm

Signed artist ditching major lables
Well I'm not signed yet however I think the deal that Madonna took is a very good one. I feel an artist who is unknown in the main stream but well known underground would be able to follow the same as Madonna because they already have a fan base. Cutting out the lable is like cutting out the middle man. I think the Record lables need to go back to the drawing board and figure out a way to compete with the compotition, they have to make the recording contracts more attractive other wise up and comming acts would just use them for distrubution then dith them for there competitors. myspace.com/hillarydeveaux
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