More Artists Recognizing The New Business Model: Sell The Scarcity

from the very-cool dept

Wed, May 20th 2009 1:04pm — Mike Masnick

Laughing Squid, in talking about how Eminem is the latest artist to embrace the tiered selling structure (though, I think he got the model wrong -- the music is priced way too high), calls our attention to a short article by famed musician Brian Eno that highlights the point we've been suggesting for years. The music industry is doing great, and it's doing it by selling scarcities:

Digital technology has made music easier to make and copy, with the result that recorded music is about as readily available as water, and not a whole lot more exciting.

This seems like bad news, until you pick up a copy of Time Out. Then you realise that the live music scene is exploding, for, unable to make a living from records sales, more and more bands are playing live. That experience can't be put onto a memory card--and people are willing to pay for it, and to pay quite a lot. Concert attendances are at an all-time high: recordings are increasingly ads for live shows, and live shows have become once again the real thing, the unduplicable.....

The duplicability of recordings has had another unexpected effect. The pressure is on to develop content that isn't easily copyable--so now everything other than the recorded music is becoming the valuable part of what artists sell. Of course they'll still want to sell their music, but now they'll embed that relatively valueless product within a matrix of hard-to-copy (and therefore valuable) artwork. People who won't pay £15 for a CD will pay £150 for the limited edition version with additional artwork, photos, booklet and DVDs. They often already own the music, downloaded--but now they want the art. They're buying art, and they're buying it in a new way. That suggests to me the possibility of a refreshingly democratic art market: a new way for visual artists, designers, animators and film-makers to make a living. So, as one business folds, several others open up.

It's so great to see more and more content creators realizing this.

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Filed Under: brian eno, business models, economics, scarcities

45 Comments

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Ima Fish, 20 May 2009 @ 1:33pm

I get the impression Brian Eno won't be producing any U2 CDs anytime soon.
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Anonymous Cowherd, 20 May 2009 @ 1:37pm

Democracy
Eno touches on something that is very important: People are taking control and getting involved in/with their music. No longer content to be mere consumers, people want to be in control of all aspects of their lives, including their music. The Big labels view music fans as a captive audience that is duty bound to buy everything they crank out, the way they dictate, at the price they dictate. And you're a criminal if you try to deviate even slightly from the blessed path. People want to think and act and make their own lives, not receive them from above. Music is alive and well, and people are willing and able to spend money for it, but in ways they decide. The recording companies could participate if the wanted to, but they don't. Let them wither and die. From the remains a million new ways to enjoy and share music will emerge.
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Anonymous Coward, 20 May 2009 @ 1:38pm

and how does the solo artist who writes, performs and records by themselves make a living? Many do not perform live, the only product is the music itself. Any ideas?
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Anonymous Poster, 20 May 2009 @ 1:42pm

Re:
That's for that artist to decide.
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Ima Fish, 20 May 2009 @ 1:47pm

Re:
"and how does the solo artist who writes, performs and records by themselves make a living?"

I'll ask a similar question to you. How does a lazy frick like myself who lays on the couch, watches tv, and masturbates to porn by himself make a living? The answer, I don't.

How does anyone make a living for what they do? They find someone willing to pay them. No one is owed a wage merely because something was done, well, at least not in the US.

If no one is paying you for what you're doing, either accept that fact and live in poverty or do something else.
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Illusion, 20 May 2009 @ 1:50pm

Changing models
The solo artist in your question will have to change with the times just like everyone else...or find another way to make a living...

Or, as in times past, find a sponsor/patron willing to pay to support continued work....

I don't see how that artist fundamentally differs from any other?
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DJ, 20 May 2009 @ 1:56pm

Re: Democracy
With all this big government and sue-happy companies, I find myself wondering:

whatever happened to "buyer beware"?
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Ima Fish, 20 May 2009 @ 1:59pm

Re: Changing models
"The solo artist in your question will have to change with the times just like everyone else..."

That's not completely true because it assumes that prior to P2P and the net that everyone who wanted to be a musician was fully compensated. That's completely untrue.

For the vast majority of musicians out there nothing really has changed in the music business since the advent of the net, other than it's ridiculously easy to get exposure now.

I was a musician in the 80s and 90s and I couldn't earn a living without getting side jobs. I knew musicians in the 70s who couldn't earn a living. There were no doubt musicians living throughout the ages who were unable to earn a living. Like I said, for most musicians, nothing has changed.
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Anonymous Cowherd, 20 May 2009 @ 2:02pm

There's nothing being said here (or anywhere) suggesting the audience/market for studio/solo performers is going to disappear completely. It's fairly safe to assume that there will always be a place for the solo/studio performer (who is still a performer, by the way) within the market. What those performers will have to do, however is be willing to branch out and use some the new models to help them make a living practicing their art.
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RD, 20 May 2009 @ 2:10pm

Tough
"and how does the solo artist who writes, performs and records by themselves make a living? Many do not perform live, the only product is the music itself. Any ideas?"

Tough shit. Do something else then. Or find a new way to make money from your music. Just because you CHOSE to become an artist doesnt mean the world OWES you a living at it. I know many, many, many people who spent 4 years in college to get a degree who arent working in their chosen field. Life sucks, sometimes you get the crap end of the stick. Adapt or die. But stop whining that the entire god damn world OWES you a single f*cking thing because of your chosen profession.
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DJ, 20 May 2009 @ 2:11pm

Re: Re:
Wait wait wait wait wait wait WAIT!

You're describing capitalism, there, bub. We can't have that in this country.
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DJ, 20 May 2009 @ 2:16pm

Re: Tough
yes, but if artists start taking that attitude, the question then becomes "How do their LAWYERS make money?"
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Tgeigs, 20 May 2009 @ 2:24pm

Re: Re:
"I'll ask a similar question to you. How does a lazy frick like myself who lays on the couch, watches tv, and masturbates to porn by himself make a living?"

You date Oprah, my friend. You date Oprah.
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YouAreWrong, 20 May 2009 @ 2:28pm

360 deals
The business model pre-digital: label signs artist, and hands over advance. label pays to produce, distribute, and advertise the album. label keeps all income from album sales until these payouts are recouped. label uses ridiculous accounting measures to make sure that virtually no album ever becomes fully recouped. artists still make money off of live shows from tickets, merchandise, and endorsements.

The new 360 deal: label signs artist, still pays out advance, production, distribution, and advertisement. label keeps all income as above, but this time also takes a large cut from tickets, merchandise, and endorsements. once again, the label uses hollywood accounting to make sure that recoupment is never met.

So yes, labels are moving on from the old business model, but now they're taking it out on artists.
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Anonymous Coward, 20 May 2009 @ 2:50pm

Re: Re: Re:
Hmm. Lucky for you, Tgeigs. So, do you have any intel on this?
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Anonymous Coward, 20 May 2009 @ 2:54pm

"Meet the new boss, same as the old boss"

Amazing that Mike only sees in this what supports his agenda.
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Tgeigs, 20 May 2009 @ 2:55pm

Re: Re: Re: Re:
Can't see it at work; damn web filter. What is it?
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Bruce A. (profile), 20 May 2009 @ 3:05pm

The Better Deal:
Artist records/produces own music, distributes it via a multitude of possible channels, promotes and markets through live performance, social networking, etc. and tells the labels to go f%# themselves.

As for the solo artist: How about you record your music, and if it is good then people will pay to have it performed live, or to use it in a commercial veture (movie, television, etc.,),. or pay you to compose something original? Your talent is the scarce good in that model.
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Anonymous Coward, 20 May 2009 @ 4:41pm

Re:
and when does the artist make music if they are doing distribution and promotion? they don't. so they hire a rep, and the rep hires people, and the people hire people, and so on. In the end, you have a record label / music business by another name.

what is old is new again.
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Pope Ratzo, 20 May 2009 @ 4:41pm

Live performances aren't the only way for recording musicians to make a living. There are still business models for selling recorded music.

For example, I compose and record music on commission. It's expensive, but when I deliver a digital recording (in the format of choice, including 5.1 surround) I also convey the full rights to the purchaser (I call them patrons). They can do whatever they want with the music, including make copies and sell them. The only thing they cannot legally do is put their own name on it and say they made it. The best way to enforce that last part is to make sure there is some value in having something that is made by me (I use a different name professionally).

Eventually, I plan to use digital watermarking to ensure that I retain attribution of authorship. So far, the model has been working. It's sort of the way artists and sculptors have been working for years. I don't "move a lot of units" but the pieces I create are unique and the customer can say they have something special. I also have a terrific artist create individual artwork for each recorded work, and often include video and other material.

The old model is dead, but artists are supposed to be creative people, so let's just figure out a new way to go about it.
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Mechwarrior, 20 May 2009 @ 4:42pm

This used to be the same way with PC games, coming with expansive lore-books, maps and artwork. Though they still do that with limited editions, back in my day all or most games had that kind of stuff standard.
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Marcus Carab (profile), 20 May 2009 @ 4:48pm

lucky...
Brian Eno is lucky he's wealthy and popular, because the industry is going to be pretty angry with him.
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Mike (profile), 20 May 2009 @ 5:23pm

Re: 360 deals

The new 360 deal: label signs artist, still pays out advance, production, distribution, and advertisement. label keeps all income as above, but this time also takes a large cut from tickets, merchandise, and endorsements. once again, the label uses hollywood accounting to make sure that recoupment is never met.

Yup, and the good news is that there are ALTERNATIVES this time around, so that musicians DON'T have to sign such bad deals, and can go alternate routes, where they have more power/control and don't have to deal with hollywood accounting.

And you know what's enabling that? Same thing that made file sharing possible...

Are there still some bands who are signing bad deals? Sure, but they don't have to any more, because there are alternatives -- which really wasn't the case for most in the past.
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Mike (profile), 20 May 2009 @ 5:27pm

Re:
and how does the solo artist who writes, performs and records by themselves make a living? Many do not perform live, the only product is the music itself. Any ideas?

Did you not read the full post? He only talks about touring as a part of it...
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Mike (profile), 20 May 2009 @ 5:30pm

Re:
"Meet the new boss, same as the old boss"

How is this the same as the old boss? Artists taking their career control into their own hands? Sorry, I don't see it...

Amazing that Mike only sees in this what supports his agenda.

I have no "agenda". I'm just interested in the trends we're seeing.
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Mike (profile), 20 May 2009 @ 5:35pm

Re: Re:
and when does the artist make music if they are doing distribution and promotion? they don't. so they hire a rep, and the rep hires people, and the people hire people, and so on. In the end, you have a record label / music business by another name.

what is old is new again.

Not quite. We have pointed out, as you noted, that there's still a space for "labels" in this new arena to handle all that stuff... but there's a LOT more competition now, so you don't get crappy deals a la the old recording industry. The musicians have a lot more opportunity to make sure they're in control, and can set up much better deals.
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crystalattice (profile), 20 May 2009 @ 6:03pm

Cyberpunk predicted this
The cyberpunk culture more or less predicted this. The RPG "Shadowrun" talked about it back in the late '90s, before all of this became big.

It said that music, because of the digital nature, would become free to the masses. Music companies would go so far as to have Song-o-Matic systems that could create music according to a formula, even making it sound like a specific artist.

Hence, the soul of the performer became key. Concerts and other live events were how performers made a living. Computers could recreate the sound but only a person can put their energy and essence into the music.

I see this happening now. That's why live performances are so key to musicians; the music gets their name out there but the show is what makes a fan.
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Suzanne Lainson (profile), 20 May 2009 @ 7:17pm

There will be too many bands chasing too few venues
"Then you realise that the live music scene is exploding, for, unable to make a living from records sales, more and more bands are playing live."

Unfortunately this is going to create its own set of problems. Already guarantees for bands have gone down. And where there once was a headlining band and an opener, now you often see four bands on a bill being asked to split the same amount of money.

"Concert attendances are at an all-time high: recordings are increasingly ads for live shows, and live shows have become once again the real thing, the unduplicable."

I'm not sure this is true. The big concerts brought in more money last year, but not by selling more tickets, but by charging more per ticket. At the local club scene, I haven't seen any figures to address whether more or fewer people are attending. Overall, at most ticketed events (art, sports, festivals), attendance is down because of the economy. I would expect to see the same trends with live music.
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Anonymous Coward, 20 May 2009 @ 8:07pm

Re: Re: Re:
basic opportunity cost. the musican can make new music and let others sell it, or he can make half as much new music and spend the rest of his time being management and sales. the more time the artist spends driving the bus, the less time they spend being the artist. basic economics, first year I think.
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Eldakka, 20 May 2009 @ 8:30pm

Re: There will be too many bands chasing too few venues
Unfortunately this is going to create its own set of problems. Already guarantees for bands have gone down. And where there once was a headlining band and an opener, now you often see four bands on a bill being asked to split the same amount of money.

It's called competition.

If the band is good enough they will get sole billing and all the money.

If there are several average performers they'll have to share a venue/event and split the proceeds.

If there is enough consumer demand, more live venues will be constructed/utilised.

When I was a youngin', nearly all pubs had live music several nights a week, in the 90's this went down to some pubs have live music on some nights. So maybe we'll go back to live music in a pub being normal rather than a special event.
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Suzanne Lainson (profile), 21 May 2009 @ 12:05am

Re: Re: There will be too many bands chasing too few venues
"It's called competition"

That's my point. With more bands depending on live shows to make up for lost income from CDs, there will more available entertainment than opportunities to play.

As for more venues offering live music on a nightly basis, I'm not sure that will happen under current economic conditions. People are staying home more to save money. I've been watching the financial figures on liquor sales and restaurant visits and people are cutting back.
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Mike (profile), 21 May 2009 @ 12:47am

Re: Re: Re: There will be too many bands chasing too few venues
That's my point. With more bands depending on live shows to make up for lost income from CDs, there will more available entertainment than opportunities to play.

This makes a few assumptions that may not prove true. First, no one said that live shows were the only way to make money. There are numerous other methods. Second, it was pretty rare for bands to make much from CD sales anyway -- so the point you're making is slightly off "make up for lost income from CDs" is meaningless if there's not much income from CDs at all. Third, if there's a larger supply of top acts, then that's incentive for more venues to open (and if they're not top acts and won't draw a crowd, then what's the issue?).

As for more venues offering live music on a nightly basis, I'm not sure that will happen under current economic conditions. People are staying home more to save money. I've been watching the financial figures on liquor sales and restaurant visits and people are cutting back.

A few points on that as well: the economic situation won't last forever. Second, if the band is actually making an effort to connect with fans, they'll come out no matter what the economic situation. It may be true that bands used to just showing up and playing are having a hard time, but the last few shows I've gone to (with bands who REALLY connect with their fans were PACKED).
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Anonymous Coward, 21 May 2009 @ 3:29am

Re: Re: Re: Re: There will be too many bands chasing too few venues
"Third, if there's a larger supply of top acts"

This is where you assumptions fail. I think that rather than seeing more top acts, you will see more filler. When the top 40 turns into the top 4000, It isn't hard to imagine that there will be a whole bunch more crap out there. Can you imagine a music world populated by nothing but locally promoted bar bands?

While some bands will connect with their fans locally or regionally, it will be difficult if not impossible for those bands to sustain that connection for the long term on their own. They can only do so many shows a year, and every additional show pulls away from their ability to make new music or do their day jobs that actually pay their bills.

For every Jill Sobule, there are 1000 broke bar bands that work warehouse jobs during the day to afford strings for their guitars. The assumption that all coal are diamonds hidden away by the evil music industry is a laughable idea.
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lulz, 21 May 2009 @ 4:44am

Re:
Wasn't that a necessary supplement (i.e. a crutch) to the story, as older games could not include the story and plot inside the game itself?
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Clif Craig, 21 May 2009 @ 6:13am

Music
Found this about a group encouraging "illegal downloads" to fill the blank CD.
http://www.guardian.co.uk/music/2009/may/18/danger-mouse-sparklehorse
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hegemon13, 21 May 2009 @ 7:54am

Re:
Find opportunities to get paid for the act of writing, such as writing for movies, commercials, etc. Or, write music so good that it gets picked up for soundtracks, etc. Or, sell special editions of albums for a lot more money. Or write commissioned songs for wealthy fans. Those are only a few, and none of them involve touring, or even a product other than the music (except, perhaps, the special edition album).
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hegemon13, 21 May 2009 @ 7:59am

Re: Re: Re: Re:
"basic economics, first year I think."

...which you clearly did not take, or you would realize that hiring a manager is not the same as locking yourself up in a rip-off label contract. You would also realize that more competition is good for an industry.
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Anonymous Coward, 21 May 2009 @ 10:21am

Re: Re:
So don't write music because you want people to enjoy your music, write music to sell it to some other corporate project.

yes, I feel inspired to write a jingle. NOT!
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Andrew D. Todd, 21 May 2009 @ 10:56am

So How About Amtrak?
Back in the 1990's, under the Clinton Administration, when Amtrak was comparatively well-off, it naturally spent most of its money on things like new railroad cars, but it spent a certain amount of money on "quality of service," things like better food in the dining car, entertainment, etc., especially on the long-distance western trains, where people have time to kill, and they have the "double-decker" cars. They tried to serve freshly cooked stuff instead of TV dinners, and they liked to do something regional, such as the local "down-home" dish, the local variety of chili, for example. Amtrak also paid folk-singers to ride back and forth on the trains. The Obama Administration will be spending a good deal of money on trains, and Amtrak will want to bring back some of the frills.

There isn't room for a band on a train, of course-- you might be talking about a lounge compartment ten feet wide and twenty feet long. No amplified sound, and if you're totally punky-punk, that probably wouldn't go over well. Of course, a train is a crowded place, and there isn't a whole lot of room for anyone who isn't willing to do whatever work needs doing. They might need you to wait tables, or help cook, or take a vending cart through the coaches, selling stuff, or even supervise a children's playroom. It's not suitable for an embryonic rock star. But Amtrak pays at Civil Service scale.
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Gene Cavanaugh, 21 May 2009 @ 12:28pm

Music Industry
I have thought about this a lot, and I have two comments:

1. I worked as a precinct inspector in an election, and hardly anyone showed up to vote - so something really important (how our government is to work) is ignored, and singing a song (like, Idle American - or is that American Idol - or is there a difference?) is "important".
2. And you are right. I pay very little for music, but I like it a lot, and when I find something worthwhile, I want to share it with friends/relatives, and they are willing to pay more than I would. Make me afraid to share and you will lose money big time!
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bowerbird, 21 May 2009 @ 10:24pm

there's something slightly pernicious here.

it's the idea that people won't pay money for music,
especially not if they receive it for free, so instead
you have to sell them something that's "scarce"...
the underlying idea still remains commerce-based.

i vote against that meme.

if a musician gives me music that i love, for free,
as a gift, i'm gonna give 'em cash as a return gift.

no, i don't have to, and no, i'm not going to get
anything "extra" for doing it, but i'll do it anyway,
because i wanna live in a world that works that way.

and i'm gonna find (and reward) the other people
who want to live in a world that works that way,
and we're going to make our world work that way.

we're going to create a counterculture based on
reciprocal gift-giving, and it's gonna be cool...

you people who want to take the music for free
and give nothing back in return are freeloaders,
but we don't care because you cannot hurt us...

when you find you need us, though, know that
you cannot count on us to come through for you.
we'll be just as greedy as you were to us all along.

so take all you want. but remember the karma...

-bowerbird
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nasch, 22 May 2009 @ 11:42am

Re: Re: Re:
You just can't win. The question is how to make money from music, and when someone suggests ways to do so, he's criticized for suggesting someone might want to commercialize their music. DUH!
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Jonathan, 30 Jun 2009 @ 11:57am

The future of music sales
If artist want to make real money, and not rip off the consumer, they need to eleminate the need for a record lable, or as I like to refer to them as the blood suckers who drain all the soul and goodness out of the music industry!!! As far as advertising yourself, Ive had good luck with a site called adwido, they have some cool free stuff! Check them out!
http://adwido.com
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Pete Berwick, 21 Jul 2009 @ 4:20pm

The Answer Revealed
I would like to make it easy for the solo artist who is searching for that holy grail of how to make a living full time in music. Seems everywhere I go these days desperate musicians are looking for "the answer" to save them from 20 to 30 years of paying dues like I did. So I am here to make it easy for those of you who think like this.
I make $60,000 a year as a solo musical act, and would be more than glad to reveal my secret for $60,000.
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gregory, 31 Aug 2010 @ 8:55am

Re: Re:
No-one is owed a wage, but also don't we own our property, that which we create? You want to give away property and then so go make it anyway.
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