Music Execs Still Confused Over Music Business Models
from the getting-there,-though dept
Reader Chris Gruel writes in to point out that at a recent conference various music industry execs seemed to embrace the concepts of free music, but the details aren't as encouraging as they might be. While it is good that these folks recognize where music is headed, they seem a bit confused about how to make it work as a business model. First, as a group, they all seem to think that "ad supported music" is the business model that will work. We've seen absolutely no evidence to support that (and, in fact, most ad supported music ventures are struggling).The second disturbing point is that, while the folks on the panel agreed that DRM is dead, they still claimed that "the industry needs to protect the rights of content owners by compensating them when music moves from one individual to another." The only way that happens is with DRM, and it misses the point. If they actually put in place business models that embraced the infinite nature of music to make scarce products more valuable, they would realize that they don't need to "protect" the content, and they would want to encourage the free movement of the music from one individual to another, because it drives up the value of those scarce resources.
As an example, if a musician is giving away their music to sell more concert tickets, then they shouldn't worry about annoying advertising that drives people away, or trying to cash in on every transfer of a song. Instead, they should want the songs to spread as widely as possible to build up a larger fan base. The larger the fan base, the more people who are interested in seeing the live show, the more tickets they can sell (and potentially at higher prices, too). And, before someone jumps up and down in the comments about musicians who don't want to perform live, this applies to other business models we've discussed as well -- such as getting fans to to pay for the creation of music or for selling exclusive limited editions. Oh well, the execs can keep arguing about what the world should be -- while others out there are actually making things work without them.
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Filed Under: business models, drm, economics, free, music industry
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That's the problem - trying to force people to fit the model rather than vice versa. I've said this many times, but I've totally changed my listening habits thanks to free and/or cheap music downloads from places like eMusic, AmieStreet, Stereogum and Better Propoganda, and the KEXP, KCRW and Resident Advisor podcasts. All legal, all easy to get hold of, and I don't mind paying for the albums when they've less than $5. I also check out bands when they're in my area (though, as I live in the south of Spain right now, that's not often, but I will still by merchandise).
But, nobody's going to get rich off that model. That's why the music industry panics, and why real fans don't care. More bad music has been made in the pursuit of those riches than for any other reason. Most real music fans would rather see 100 new bands make a living from their music than a single American Idol winner make millions because they happened to win a karaoke contest, and most real artists (those in it for the art, not the cash) would agree.
Ads are a bad idea, but there are businesses that can support them. That's far from guaranteed in this financial climate however, and real musicians are better off using free to sell their sound. That doesn't mean that they have to give away everything - bands who give music away still sell CDs, DVDs, merchandise and tickets. It's down to them (or their business managers) to work out the best balance, but as is often said, the losers will be the ones sticking to the "traditional" model while others around them innovate.
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Free Music
Not only was Radio FREE they paid for placement (Payola)... anyway they just need to wake up and get a clue.
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New Wind
Music Fans DO purchase CD's at the shows even when we have announced that they can get our songs for free from our website and MySpace. We also offer 'special edition' CD's for sale at the shows with a few outtakes thrown in that aren't available anywhere else but at the show and they sell like crazy. Even when gas was a mighty $4 a gallon, we still had plenty to pay for the tour, rooms, and food along the way.
Giving away our music for free created a fan base that we would not have had without some kind of 'official' label support (which is crap for new bands anyway because of the flood of bands being signed to 'low-wage' contracts). We have uploaded our music to the masses of online radio stations, podcasts, and free music websites out there and it has paid off tenfold for us. Yes, we work hard at self promotion, but at least at the end of the day, we're not paying the salaries of snobby A&R reps, managers, record execs, and others to tell YOU that you should be listening to the hot new thing.
The new business model?
Accept your extinction and get out while you can. There's healthy, young, business minded musicians out here ready to rewrite the business for you.....based on art, not money.
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Re: New Wind
Hear hear! *clap clap clap*
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Re: New Wind
i dig the last liner! some money back for our efforts would be handy though...........
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Re:
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Re: Anonymous Coward
How did you reach the conclusion that music is too expensive?
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Re: Re: Anonymous Coward
new album prices in Australian record stores have not gone up.. if anything they have gone down, in the last 10+ years. compare that with fuel, food, eberything else has risen enourmously.
i dont think music is too expensive. their is just too much of it available for free, so it now seems that way.!
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They're just petty middle-men, needed once, but now obsolete.
And don't worry about their welfare, Lennon, Elvis, Hendrix, etc. are still making fortunes.
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I used to think...
I'm a big fan of Amazing Race. I was out Sunday evening and the show started 30 minutes late because of the football game. My auto-record recorded the last half of 60 Minutes and only the first half of Amazing Race.
So I scurried over to the CBS site to watch it. The episode from this past week was not up, rather they were a week late. Without realizing that, I started to watch and got a commercial. OK. I can deal with one of those. I tried to skip ahead to a point about 20 minutes into the show... got another commercial before it started and right after it started (played about 30 seconds) I got yet another commercial. It wasn't where I wanted it and tried to skip ahead and got yet another commercial. They wire it so you can skip in the program but not the commercial. I gave up, disgusted. I'm now downloading a free version off bittorrent with the stupid commercials removed. I get the current version and NO commercials. I really want to follow the rules and pay my fair share to produce good programming, but they just make it SOOO hard and push away those of us who realize those shows just don't magically appear, but cost lots of money to produce. But when their obsessive/compulsive need to advertise every fifteen seconds... you lose those who are your bread and butter.
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Definitely agree DRM is dead, and new models are the way to go.
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The Music Industry NEEDS to die
Done.
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Commercials in Online Shows
Even with the commercials you can watch an hours worth of a TV show in 45-48 minutes, which is much better than sitting thru the extra 15 minutes of commercials that are broadcast.
To each his own.
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