David Byrne Breaks Down New Business Models For Musicians; Confirms Radiohead's Success
from the changing-world dept
Wired is running a couple of stories involving well-known musician David Byrne. The first is an interview with Thom Yorke from Radiohead, where he confirms what a huge success the "name your own price" offering was, contrary to CNN's editors calling it dumb. According to Yorke: "In terms of digital income, we've made more money out of this record than out of all the other Radiohead albums put together, forever." Yorke also confirms other things that we've said about new business models, where touring can be a big part of the model (contrary to people who insist that's impossible). Yorke notes: "at the moment we make money principally from touring." Yorke admits that he's not a fan of touring (partly for ecological reasons), but that's how the band makes money (this is similar to what we've heard from other bands as well). So, again, given all the publicity around the "name your own price" deal (which Yorke admits they basically tried on a lark and only agreed to it right before announcing it), it should pay off well with more people willing to pay more money to see the band on tour. The one thing Yorke says that I disagree with is the idea that the model only works for Radiohead due to its following. As we've pointed out, most of the examples of bands successfully trying similar models involve much less well known acts. In fact, Byrne himself later points to the success of Jane Siberry, who tried a name your own price model years before Radiohead, and certainly didn't have the same huge following, but found that the model was quite successful.The second article is by Byrne himself, where he does a nice job breaking down the business models of the recording industry. Much of what he says will sound familiar to folks around here, though he adds in some interesting numbers concerning how much a musician makes per CD and per iTunes download (it's not much). He points out that the value proposition of a record label is decreasing rapidly as areas where they used to be needed (money for recording, promotion and distribution) are approaching free in cost, meaning the labels provide little, if any, value on those points. He then lists out what he believes are the six business models a musician can adopt these days, noting that it's nice to see more than just a single option. This highlights another point we've tried to make: the new business models for the music industry mean that there isn't just one business model for every musician. In fact, just about every successful new business model we see is slightly different -- though most pick up on some important economic cues. The one problem I have with Byrne's explanation is that it still mainly focuses on one thing: how do you sell the music itself. This comes even after he talks about how the idea of selling music is only a recent phenomenon, and historically, music was always tied to the performance itself. The less bands focus on "selling music" and the more they focus on using the music to sell other stuff, the faster a path to success will become clear.
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Filed Under: business models, david byrne, music, radiohead, record labels, thom yorke
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Digital sales
Listen to the audio interview...
Eric
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Re: Digital sales
From the article you've just responded to (emphasis mine):
"According to Yorke: "In terms of *digital income*, we've made more money out of this record than out of all the other Radiohead albums put together, forever."
Your point?
Seriously though, this article points out again the difference between artists and the "industry" quite well. Byrne, who has a reputation for being open-minded and not exactly unsuccessful himself, confirms that the digital plan seems to be very successful (though not for everyone). The industry people who write for CNN/Fortune bemoan the digital focussed strategy, joining in with the attempt to prop up their old busniesses.
Yorke's comment is also very revealing in a number of ways. Mainly, he's pointing out that the album made more for them that *their entire back catalogue* in the digital format. Whether or not this success is repeated when the CDs come out will be another matter. Either way, you have to be pretty blind to what's happening to seriously believe this was anything but a success.
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Re: Re: Digital sales
It could be misunderstood if read quickly...
Eric
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Re:
Also, check today's post on radiohead.com about what they are doing for their next run of concerts.
Eric
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20 stories on the front page. As of right now there are 2 about music, nothing about patents. What's the complaint again?
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Re: Re:
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Armchair experts abound...
In the "music for free" or "name your price" models how do you propose to pay the creative powerhouses that write over 50% of country songs (and many other genres)? How does the free model or name your price model compensate the writer when covers are made of the greats (think Bob Dylan, Clapton, Zeppelin, etc.)?
I'm open to suggestions. But for all the "experts" who love to chime in regarding how the industry must change its view of charging for recorded music, I've yet to find someone who thoroughly understands all the moving pieces. More importantly, I see no discussion of how ignoring the copyright benefits for songwriters and composers could impact the long term quality of music, tv/movie scoring, etc.
Take a survey over the last decade of songs across all genres that hit the top 100 on Billboard. count the number of songs that weren't written by the recording artist. Study how those folks get paid for their efforts. Think about how this fits into these free or donation models. Then come back and explain how these models provide incentive for them.
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Re: Armchair experts abound...
Well, one possibility is that this model of having different artists and songwriters is not economically sustainable, and so this will change if the In Rainbows-style of promotion and sales is embraced. It's just a possibility, it likely won't happen, but it could. If groups that write their own music are more profitable/successful than groups that don't, then they'd disappear.
I think this is also a good time to mention, as has been mentioned many times here, is that there are many different business models for musicians to follow here. Some will work for certain acts and some won't.
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Re: Armchair experts abound...
Yeah, other than the fact that it's folks like David Byrne, Thom Yorke, Courtney Love and others having the discussion... those are hardly "armchair quarterbacks."
More importantly, I see no discussion of how ignoring the copyright benefits for songwriters and composers could impact the long term quality of music, tv/movie scoring, etc.
I've actually discussed it at length in the past. I'm sorry that you feel that we've ignored the topic, but I figured it had been put to bed already.
Again, songwriters can get compensated the same way other writers do. It becomes a paid for hire business. And, yes, no one knows if the song will be a hit beforehand or not, so early on you're working for not very much (just like most writers). But then, once you get a big hit, your writing skills will be in big demand, and your price goes up.
It's pretty typical of just about any other industry. Not sure why you think it's impossible for the recording industry. It's not.
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Re: Armchair experts abound...
There is a place for the labels when cover versions start to be looked at. Indeed David Byrne's article above lists 6 distinct models. I don't think that anyone suggests that there's absolutely no need for the labels any more, just that their assumptions (e.g. free = lost sales) are wrong and they need to adapt to survive, and that they're no longer necessary in all circumstances.
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not the consumer problem
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not the consumer problem
Wouldn't that be up to the musician and writer to work out? I mean, the whole idea is about using the song as a sort of loss leader to get people hooked into concerts, t-shirts, and other stuff but that doesn't meant the songwriters shouldn't get a cut of those.
I don't go to the store and purchase a box of Kleenex and worry about the workers who built the box, or built the software that runs the plant. That's for the company who slapped their name on the box. If a company doesn't pay the back end, they tend to fade away or get sued into oblivion.
Let's face it, in the current system if you look at the price charged for a CD and digital version, is the writer being paid fairly now?
sorry for the double post, always remember to close your tags
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The new music model
A band no longer needs the record label. As the article explains: "...the value proposition of a record label is decreasing rapidly as areas where they used to be needed (money for recording, promotion and distribution) are approaching free in cost...".
Bands can start out by setting up a basic Web site or paying a small fee for a service and giving away music, at first, to promote live performances. The musicians will make money touring and if they become popular enough can then sell music over the Internet.
Now a musician needs (besides talent and musical skill) a good head for business, some technical knowledge of the Internet and computers, and a lot of hard work. Since musicians are generally not the Harvard School of Business MBA types there is ample opportunity for entrepreneurs to offer services setting up a Web presence and promoting the musical act. It could be thought of as a power shift to the agent, as well as the artist, who can then still make the same percentage fee but will make far more money, as will the artist/band, by arranging the music distribution as well as the club dates and the transportation.
The record labels are in a very good position to offer these services and make a very nice profit. They still control access to the radio markets which is and will continue to be a major source of market exposure and they certainly know how to promote. What the have not learned, so far, is to give up the idea that they can control all of the money and keep most of it for themselves. This thinking will not work in a world where a teenager with Web and programming skills can provide as good a distribution system as any multi-billion dollar media giant.
The music consumer is and will continue to benefit from this power shift. No only is the music cheaper and easier to obtain, but the music, being controlled by the musician, be of far better quality and diversity.
This is a change to a system where hard work and talent has an advantage over hype and money.
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There may be a problem here
OK, now here is the problem. Why must over 50% of the songs performed by country and other artists come from professional writers? I personally think that over half of all the songs I hear on the radio are crap, so maybe the so called "creative powerhouses" are the problem. Solution? Starve them and their weakling studio "artists" as well.
From the same post: "How does the free model or name your price model compensate the writer when covers are made of the greats (think Bob Dylan, Clapton, Zeppelin, etc.)?"
Look, this whole "current artist covering a great classic" meme has got to stop. Is the world so bereft of great ideas that we can't think of any new music? This is more studio B.S. For one thing, how are artists compensated currently? Poorly, perhaps? If we were to shine a light into this dark little corner, I wonder what we'd find?
Anyway, I guess I'm done. Digital distribution is changing the way "consumers" discover, share, and enjoy music. The old model is not going to work. Professional writers hiding behind glitzy pop stars will probably be casualties, unless they can put up myspace pages and sell their words to glitzy YouTube artists.
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Sounds to me like less music is created, less quality music.
As a non iPod (or any other mp3 player) owner, I don't care. Have fun with your generic future.
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Re:
Huh? Not even close. Just look at what's happening now. With less respect for copyright, we're seeing MORE music than ever before created. The same is true just about anywhere that copyright is weakened. So your entire premise is wrong.
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Everybody assumes the "good" music is written by the people in a band, and therefore this free or donation model won't really hurt quality. Instead they assume it will weed out the bad "radio" music. Go do your fact finding and enlighten yourself.
There are tons of great musicians who can't write music (or don't make a successful effort for whatever reason). There are tons of great writers that can't record or perform well (or don't make a successful effort for whatever reason). I've yet to see any of these models seriously address this critical piece of the equation, not to mention the scoring aspect.
I'm sure there is a way, but none of the current proposed models will work without having a serious impact on long term quality.
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Nope. Never assumed any such thing. Not sure why you would claim that we had. I've actually assumed the opposite. With more business models available, there will be even more ways for songwriters to make money.
Instead they assume it will weed out the bad "radio" music.
Again, I have never assumed any such thing. As I've said repeatedly, what we'll see is a lot MORE music being created (we're already seeing this), so if anything that will mean a lot more bad music -- but a lot more good music too.
There are tons of great musicians who can't write music (or don't make a successful effort for whatever reason). There are tons of great writers that can't record or perform well (or don't make a successful effort for whatever reason).
Indeed. Who said otherwise?
I've yet to see any of these models seriously address this critical piece of the equation, not to mention the scoring aspect. I'm sure there is a way, but none of the current proposed models will work without having a serious impact on long term quality.
Er... I explained above one such business model, but there are many such business models. As I've made clear, for bands that understand the economics, there's lots of money to be made... and if there's lots of money to be made by bands, then there will also be lots of money to be made by songwriters.
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Promotion is still VERY expensive, especially if you want to reach beyond the Web 2.0 crowd who read tech sites like this. If you want to promote to mainstream America you better bring cash.
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Spoken like a true member of the digerati
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Business model?
And fans, being fans, forgive them for the deception. If that's not a brilliantly cynical marketing strategy I don't know what is.
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Re: Business model?
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