Digital Music Has Only 'Failed' If You're Not Paying Attention
from the think-bigger dept
Apparently Forrester music analyst Mark Mulligan told the press recently that "digital music has failed," which seems like an incredibly short-sighted statement. Mulligan's a smart guy, and while we've disagreed with him in the past, I'm hoping he really said that because it's a good line to feed the press, rather than because he had any actual belief in it. The fact is digital music has been a massive success for those who know how to use it. Digital music has allowed musicians to go from nobodies to stars. Digital music has allowed artists to connect with fans they never would have reached before. Digital music has allowed artists to massively expand their fan bases. Digital music has allowed artists to cut out unhelpful middlemen and route around gatekeepers. Digital music has meant more music is being produced, released and available today than ever before. How you can consider that a "failure" is beyond me.The only way you can possibly consider it a "failure" is if you think the only purpose of digital music is to sell it and it alone. But that's not the case.
Digital music has allowed many artists to make plenty of money through other means. Ignoring all that and focusing so narrowly just on the sales of digital music alone is like saying that telephone switching technology was a failure because it put phone operators out of work. If that's what you're looking at, you're measuring the wrong thing. Yes, digital music sales haven't replaced the decline in CD sales. But anyone who thought it would was delusional from the beginning. But digital music isn't a failure. Not by a long shot. It's been a huge success for all sorts of folks in the music industry -- and especially for musicians and fans. It may have been a failure for a few big record labels, but mainly because they made the same mistake, in thinking that the answer was to focus solely on digital music sales, rather than the larger picture.
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Filed Under: business models, digital music, mark mulligan, music
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http://en.wikipedia.org/wiki/Parents_Music_Resource_Center
It is uncertain whether the "Tipper sticker" is effective in preventing children from being exposed to explicit content.[13] Some suggest that the sticker actually increases record sales. Philip Bailey stated that "For the most part [the sticker] might even sell more records in some areas - all you've got to do is tell somebody this is a no-no and then that's what they want to go see."
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You could purchase movies in the 80s on VHS, and tons of time and money was spent in video arcades.
Movies and games are chewing up the exact same amount of time and money now as they did 25 years ago.
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The comaraderie as you had a second person to challenge to a game of Space Invader.
The person you beat at basketball by scoring that one last hoop.
The one guy that forgot to bathe sending you running from the arcade as he beat your still lifeless avatar...
...
On second thought, gaming is better now.
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You could purchase movies in the 80s on VHS, and tons of time and money was spent in video arcades.
Movies and games are chewing up the exact same amount of time and money now as they did 25 years ago."
OMG! I can't believe I just read that. In a time when game consoles cost $300-$400 and a new game $60, you're comparing quarters to this?!?
Game arcades in the 80s made their money from allowance money. What we're talking about today is a YEAR'S worth of allowance money!
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I'm likely to believe there would be a lot of interesting material to look for in finding how people spend their free time.
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Apple
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A bit of a deceptive argument here, because you are assuming that non-digital music somehow did not allow that to happen. Did artists who released their own singles or albums somehow not have the ability in the past to do concerts, sell t-shirts, or heck, play miniputt?
Did the post office not allow records to be mailed from city to city? Could people not make cassette tapes and use other methods to pirate the material and pass it around to all their friends?
Digital music didn't change anything. It has made some of it quicker, but it hasn't really changed anything.
So the argument is deceptive, you are trying to make it as if artists didn't do concerts before, didn't play bars, didn't do anything because they had no digital music. That would be a fail.
However, net sales of recorded music (digital, non-digital, whatever) has dropped signficantly. All the increases in other areas of the music industry (concerts, etc) are at best putting things level. The consumption of music is way up, and the net receipts are not. Without increased licensing, things would actually be dropping.
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Airflight didn't change anything. It made traveling about quicker and crossing oceans much less a hassle, but it didn't really change anything.
See how silly that sounds?
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1. Digital music didn't change anything.
2. However, net sales of recorded music (digital, non-digital, whatever) has dropped signficantly.
Whiplash!
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Perhaps because the 'value' of the copy of recorded music has been significantly reduced by the infinite supply the copy recorded music and the price of said recording hasn't kept pace with the reduction in value?
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There is no infinite supply, only infinite pirating. The actual legal supply is limited by people being willing to pay for it. In basic terms, music (or movies) are always supply limited to the size of the paying market.
Now, for value, you may be onto something. As the pirates flood the markets with infinite supply, the value of any one copy of a song to someone is very transient, because they can always download it again, so there is no real loss if they happen to misplace the content. I suspect people would be more upset about losing their ipod than the actual music on it, even if the market price for the music is maybe 30 times higher in total than the device. It's because only the device cost them actual money, so it is the only thing they truly value in the situation.
Net sales have dropped. It isn't because people don't want the product.
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But digital music did change things. We no longer have degradtition of the physical copies. The digital copies are exactly that same as the day we purchased them.
We no longer have container format changes forcing people to repurchase their music libraries. From the 70's through the 90's we went from albums to 8-tracks to cassettes to CD's.
These facts alone could account for some of reduced sales that the recording industry is experiencing.
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Moving physical CDs (cassettes, 8-tracks, vinyl records) to a record store or radio station can cost a lot, especially compared to what it costs to send digital copies over the internet. And what for? The chance that someone might pick up a copy? You need widespread appeal before you can do that, and in the olden days you needed a label to get that appeal.
Digital music means that musicians can earn an honest to goodness living without the aid of a label. Will they earn as much as a Billboard Top 40 pop artist? Probably not, but it can be high enough to live comfortably.
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uTorrent is starting to promote artists 250 million users, 100 million in any given month. On uTorrent you already have PioneerOne, Zulu Music, with more apps being built. Sometime in the next year or two a killer app for music will occur. Soon after an app for Video. Its existance will be spread by twitter, facebook, and other social media.
That is when you will have a Billboard Top 40 artist.
While my predictions of the specifics is off sometimes, my predictions of what will happen are not.
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You don't get it: Torrent sites are doing this stuff only to try to cloak themselves in some "good", when in reality their full intention is to plunder the movie and music industries as fast and as often as they can.
You are a sucker if you fall for it.
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Also there is a lot of plugins for Jamendo (i.e. VLC Jamendo plugin or just look at Jamendo Apps for a long list of others).
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In short, the music industry is trending toward the ideal state, where music is easily available for cheap/free, and fanbases are comparatively easy to acquire for any starting artist. Money will be made off of creating value--i.e. collector's edition CD sets, live gigs, wearable and other merchandise. Even if you only make an average of $1/year per fan, it is not inconceivable to build a fanbase one million strong with the internet at your disposal. The upshot is, if you have the talent and the willpower to make the connection to fans, you will achieve at least a moderate success. The only gatekeepers in this model are raw talent and motivation.
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The labels are the failure
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Re: The labels are the failure
Doubtful. The problem is the customer wants a one-stop shop for getting the music they want. Each label creating its own site would fail just as much as the labels not creating any site. iTunes works because, regardless of label, the customer can get the music they want.
I don't buy the music the labels sell anyway, but if I was looking for music online, I wouldn't have a clue, nor care, which label won the opportunity to sell a particular artist's music.
Sites like iTunes won the war because they didn't make things difficult on the user. Had the labels gotten together and built a massive site that sold all of their music, instead of colluding on the price of CDs, then they might have won.
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$.99 will never = $17.00
who has the copyright on the 12 songs on a cd and how many "duds" out of an album also "sold a million" just because that is the only way to get the one or two that we want.
as $17.00 sales go south it's tough to get many sales of the "duds" at any price. that leads to a very large loss of gross sales as good music sales continue and all the rest mostly die.
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Re: $.99 will never = $17.00
Oh, please.
Firstly, I don't mention piracy anywhere in my post, so you can take back your accusation of lying right now. I don't pirate music, never have, and I still think EntIndustry's claims about piracy are self-serving and even irrelevant. It is their UTTER FAILURE to adapt to reality of the past decade and a half that puts them in their (imaginary?) damsel tied to the traintracks scenario.
- They say revenues are up, but they're still losing money.
- They say stricter 3-strike laws are in place but don't work so they need stricter laws.
- They FAIL to look at any of their business as usual tactics and realize that they are no longer workable.
Automation, tech advances, economics, obsolescence, competition, changed habits and tastes, new distribution channels, market glut, market fragmentation, wasteful expenditures, lack of agile response, lack of foresight, lack of vision, lack of SENSE in the face of what is actually happening...none of these factors - which would affect ANY industry - are taken into account?
These people hold ALL THE CARDS, the rights, the catalogs, the stables of artists but STILL cannot bring themselves to do what ANY OTHER INDUSTRY will do to survive and court CUSTOMERS old or new.
No, they bang on about piracy and, what really makes me angry as a non-pirating type, they want to STEAL my tax dollars to inflict more ineffective, rights-eroding law that no one can flipping comprehend because they are literally proving themselves TOO STUPID TO LIVE.
They want me to PAY for them to make me and all citizens, guilty or not, potential criminals forever and ever, amen, because we have eyes that see, ears that hear, brains that process, hands that create, voices that express.
They are not the arbiters of culture, I am. We are.
All 'piracy' really is? The great rebalancing. Copyright only exists because society permits it to exist. Society has been largely complacent about it, but the incessant pushing of copyright's boundaries, the overbearing and overreaching poison of protectionist attitudes, are wearing that complacency away. No amount of law would or will stop that tide should society turn its massive, collective head and finally say 'ehhh, no, you're done doing that.'
Public domain is the norm that has been starved, copyright is the exception that continually attempts to be the rule, and sharing is the resulting restoration of a natural order.
If you can't figure out how to monetize basic human nature, you need to step aside and let someone else do so.
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I didnt mean anything mean by it. If it came out that way, I apologize. I just didnt think theres a way to continue a conversation from one day to the next from a different post. but I could be wrong on that. He did follow it up with an "Oops".
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And I was hissed off at being called a liar by yet a whole other AC.
(lol - wish you could've seen the doubletake I did when I saw this, nearly dislocated my head)
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"Automation, tech advances, economics, obsolescence, competition, changed habits and tastes, new distribution channels, market glut, market fragmentation, wasteful expenditures, lack of agile response, lack of foresight, lack of vision, lack of SENSE in the face of what is actually happening...none of these factors - which would affect ANY industry - are taken into account?"
You know, never mind any of that stuff, uh, you know, it's, um, piracy, uh, that's to, um, blame, yeah, that's the ticket.
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In a world dominated by the single song sale, why would an artist who wants to stay connected to fans take all the time to make an album?
Sometimes I think even the most militant anti-label posers really want a record deal more than anything in the world.
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also single songs were available for over 50 years (records)
long before as media was able to handle multiple songs..for years 45 sales decided whether an album was released.
one sees a full circle from singles to singles.
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If they don't have 10 songs that are worth singing, they shouldn't bother. Leave albums to those that are capable of doing it with quality and integrity.
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Same principle as the EP but without the manufacturing costs, something that commenter 5 appears to have missed.
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My theory is that as much as these people crap on the music industry every chance they get, they really do aspire to be part of it. They aim to do things "just like the big guys" and follow conventions that,if you think about it, are greatly outmoded.
Artists don't take advantage of this at all, and still stick with the old "an album every year or two". Seems silly, doesn't it?
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I totally agree with what you said...but I find that with the artists I like, I tend to buy everything they have...CDs are a terrific way to package (even electronically,) all of what they want to package. I tend to buy most of my independent music in CD form (even electronically,) to support the artists I like. However, for artists I don't know, I do sample single songs (which is great about Paste or Remix, because they send sample CDs.) Once I like a song I hear on these samples, I tend to buy up everything they put out. Sure, some of what I get sucks, but I find that many songs from artists I like may seem sucky at first, but they often grow on me.
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DnB
Now as the rise of CD decks is coming you there is a huge demand for digital tracks as now not only can you listen to these tracks on your cd player or mp3 player but you can now also mix with them as well.
I know its a very niche area but you just have to look at websites like beatport.com or breakbeat.co.uk to understand that digital music, and the sales of digital music, is in no way a failure.
If the big industry players would just look to their smaller more underground record label brethren they would see a whole bunch of successful artists and producers making lots of money from their digital music. This is mostly due to the fact that the artist and the producer are the same person and in a lot of the cases the artist runs the record label also. And what does this mean? A lot less useless middlemen at the record label.
That's what I see anyway, hope this interests some of you :)
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Re: DnB
Electronic music (and probably other non-mainstream musical styles) aren't usually done to make large sums of money. The most common reasons are either the love of the music or to get exposure to get gigs (DJ gigs in the case of electronica). When I was playing out I used to get asked all the time why I didn't make music, as that was the most common way to get your name out there and get gigs. Back in the mid 90's a lot of techno records would press 500-2000 copies, that's not making the artist a lot of money even when the artist is the artist, writer, producer, and label. It often did, however, lead to numerous DJ gigs which could pay $1,000+ for a big name. Although I knew some artists that just did it because they loved electronic music and the fact that they got any money at all was a plus.
Just looking at the music available to DJ's now, I think digital music has succeeded in that it's turned a lot more people into artists (as a consumer this both good and bad, there's a lot more not-so-good music out there now). It's succeeded in that as a DJ (or music consumer in general) I no longer have to be sitting in the record store waiting for the UPS boxes to open so I can pick up 1 of the 3 copies of a record that they got (and if you missed one of those 3 there were never any restocks).
It's 'failing' in that it's destroying the music copying industry, and whether the labels would admit it or not the majors and most of the smaller minors were all in the music copying industry.
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Digital Music?
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Huge success for the musicians?
Yes, and the boss isn't firing you, he's "allowing you to make plenty of money through other means." And the thief taking your car isn't depriving you of transportation, he's empowering you to build new muscles while walking. Hah.
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Re: Huge success for the musicians?
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Re: Huge success for the musicians?
The successes cited here are often last-gasp efforts by dying bands to sell their wares at whatever people want to pay. In the past, the record company would have found a way to continue to sell them. That's why bands like REM, Kansas or Tom Petty continued to make albums long after they stopped going multi-platinum.
I have to chuckle every time this website blathers on and on about some guy selling custom made music boxes that play his songs. Bands like the Who or the Rolling Stones used to give bellboys more money in tips than this music box scheme is bringing in for the artist. There's nothing wrong with selling music boxes, but let's be real here. As long as piracy is ascendant and celebrated by astroturfers like TechDirt, musicians aren't going to be leaving big tips or even staying in hotels. They'll be crashing on couches -- something Mike will probably call "enhanced overnight connecting with fans."
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Re: Re: Huge success for the musicians?
I find it really amusing when someone comes here and blathers on about how the music industry is changing. How they now have competition from 5 million bands on myspace, and how they can't charge monopoly rents anymore and actually have to work.
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Re: Re: Huge success for the musicians?
That in itself shows how society is stuck with a very narrow definition of the musician's lifestyle.
In fact, you kind of demonstrated nicely: right now, there are basically two types of musicians. A handful of superstars getting extremely rich, and then tonnes and tonnes of indie artists who will likely never see a penny for their work.
What digital music enables - and what I am very excited about - is a world in which being a musician is a career, not a lottery. A world where there are fewer musicians getting rich, fewer living poor, and way way more making a reasonable amount of money to sustain an average lifestyle - you know, like the vast majority of people who find something they are good at and make a career out of it.
Why do musicians have to be special?
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You mean "labels?"
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Yes, the labels made more, but they often did plenty of work for that money. Marketing is not simple as many of the sing-it-and-they-will-come folks are discovering. The labels worked for their pile of cash too.
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Not from album sales, they didn't.
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Also: The label dictates how the advance is spent. The band only gets to spend what's left over...then make nothing in royalties until it's all paid back, assuming they can manage to sell about 800,000 or more albums.
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LOL!! Best quote of the week so far. Amazing, bob.
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Spoken like a true Freetard; someone that has no idea how successful artists create, record and perform music.
What a complete and total zero you are.
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Oh wait, so THAT'S what the musical chairs is about! I get it now!
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What a complete and total zero you are."
You sound like some Copyfag with a 4chan education.
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Sadness really
The sheer arrogance implicit in that sort of assumption seems to underlie almost everything they do. But it's just not true; music especially (and other forms of expression too of course) is at root a cultural phenomenon not a financial one. Never mind making music free, some people would still make music if you put a gun to their head and told them to stop because that's the way the human race works. Finding myself in a suddenly reflective mood I actually find it a bit saddening that something so important as music gets reduced to money and locked up by people who think it's good to control it in every last detail from who can hear it to how you can play it and where and when and why.
This is not to say I think music should be free necessarily. I have no problem with people making money out of what they create. In fact I take issue with the premise that in the digital age you can't make money directly off the content. It just doesn't seem right to me from my own feelings and experience. I don't think you can make a lot of money that way but you can make a decent amount. I don't think there's a place for the content industry as it exists in that, but I think if you took them out of the equation any artist capable of interesting people could make at the very least a decent living from his art, certainly in music anyway.
*sigh* must be drunk or something (haven't touched a drop though) - I'm getting all optimistic and utopian again I need to snap out of it. Can someone play me a chart song or something?
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Re: Sadness really
My personal opinion is that it will lead to music becoming at best a regional business, where there are few acts that are known outside of their home areas. Yes, the label famous bands will continue on like dinosaurs, but the lower end won't bubble anything big up. There just won't be the money, the time, and the level of investment to make this sort of thing go. When the business model is "give it away and pray", few true investors will show up at the door.
What is also lost is the big concert business. Forget the 20,000 seat arena tours or the massive 100,000 outdoor festivals, think 200 seat night clubs and the occassional 800 seat theater as the extent of things. The scale drops off dramatically.
Also consider that most artists won't be able to find enough dates to play at that level to really making a living. Since they become regional acts with no simple way to move up, it is unlikely they can tour 8 or 9 months a year to earn a living (which they would have to do, because the net money out of a 200 seat club isn't going to make anyone rich).
Radio will be another victim, with scattered playlists similar to what happens in college radio, with every town having it's own little collection of average bands filling the airwaves. Don't be shocked if the radio market turns almost entirely "classic", as they want to stop taking risks on the local unsellables and instead play the golden oldies that work out.
Bands may develop followings outside of their areas, but those are likely to be too spotty to support wide touring or worldwide fame. Again, don't expect to see anyone big come up without serious financing - they type of money the labels use to put on the table but no longer will be able to do.
Yes, there will be music. Yes, there will be lots of it. But it is a signal to noise problem again, with plenty of noise and very little signal. It will leave people wishing for the days of the labels.
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"Regional business"? Again, you can't think of any ways that you could leverage a free delivery method to 2 billion and growing potential customers that might get enough of them interested enough to listen to you and pay you a little for it? Already there are global communities for every conceivable subject, gatherings of like-minded people who will talk to each other and share experiences and tastes. Word of mouth becomes potentially hugely powerful when everyone can talk to everyone. "regional" isn't what it once was. And as the sophistication of people to use the tools available grows the "signal to noise ratio" as you put it gets ever smarter filters.
And thats without even considering any of the business models touted here which have been proven to work just fine for bands of all sizes.
and even if by some weird chance you are right and music goes back to being artists who play small intimate venues live and create mostly for the joy of doing so and make no more than a living wage out of it by touting their wares on the internet... what's wrong with that? the artists get to do what they love, get paid doing it and all the content is still available anywhere in the world in an instant to anyone who wants to go looking. Have you ever paid over £100 to be at the back of a big stadium gig and watch matchstick people bounce around? What's so great about that?
While I agree that an artist deserves to be paid if he creates something worthy, where's it written that he deserves millions? I think your premise is flawed anyway. I think ir more likely that like everything else talent will rise to the top better when it doesn't have the artifical prop of a label desperate to make their money back allowing mediocre groups to get there too. Wil that be a smaller number truely huge? Probably yes, but again why is that bad?
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Re: Re: Sadness really
For starters, since when did the web lead to limitation of your customer/fan base to just a local region.
I have yet to see a desirable service or a commodity where someone hasn't been able to find a way to make a substantial buck on it. This is regardless of how plentiful the good or service may be. Multiple examples come to mind, but for a quick one -- How about the guy in Santa Rosa, CA who is making millions by selling the most common substance on the planet - salt water. You can buy his kit in nearly every pharmacy in the US, or you can get some table salt and tap water and make your own.
The key is, (as has been said endlessly here) Marketing strategy and business models matter.
Trying to use the blunt force of law to coerce millions of individuals to act differently than what seems reasonable to them doesn't seem like a business strategy that will be a great success in the long-run. Yet this is precisely the strategy of the large Labels.
My point is: You are suggesting there won't be any large successful musical acts if the current large recording industry labels fail.
To that I say again -- Implausible.
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Re: Re: Re: Sadness really
The regional nature is because for a band to play live music without outside financial support and marketing requires a market to be made for them. For a band to do a US tour (even a 200 seat a night tour) requires that they have enough fans in enough regions that are 4-5 hour drives apart to make it work out. To sell 200 tickets might require a fan base of thousands. Think of it as an issue of critical mass.
However, in the "everyone does it for free on the internet" universe, it is hard to get enough exposure in enough places to get enough of a fan base going to make it take off. Rather than getting similar playlists of music at radio stations all over the US, example, every "alternative" station would have it's own playlist with it's own bands, mostly the ones people in the area already know (the bands that play locally, you know). So any attempt to get traction outside of your area means going against the existing setup in the area.
Think of it like musical cells.
If a band is lucky, they might get known in a few cells. They might have some fans in other cells, but without marketing people working the area, without promotion, with radio play, without someone saying they are cool, there is little chance they will get well known.
Most people suggest that the internet is where these bands will get known. But you are still faced with the problem of too many acts, too much the same, and no filtering. You expect maybe some filtering websites? Well, in theory, it might work, but then everyone can open a filter, and thus we end up with a near infinite number of filters which essentially means everything gets through.
The level of noise drowns out the signal.
I really think what you will see if the label system fails is a dinosaur system replacing it, where the old existing well known bands come to dominate the landscape, and the only ones who come to join them are friends they support and widely promote (perhaps by making them opening acts on their tours). New music will be a huge noise factor with no useful filters, everyone likes something different, thus we have no real critical mass to push anyone forward.
It's a little too plausible. It's why you should be careful what you wish for, because you might actually get it.
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Re: Re: Re: Re: Sadness really
I've been to loads of good local bands that play pubs or clubs, even student bands. I've had a fantastic evening's entertainment (the whole point of live music) for a very reasonable price. I used to go to a fair number of concerts of "big" names too, back when it didn't cost a gazillion pounds. Also good, but was it "better" than the pub gigs? Sometimes but far from a given. The prices now bring value to zero for me despite being in a better position to pay than when I went often so now I don't go.
as for film, well if nothing good can be produced because noone can work out a way to pay for it, or even because I simply can't find anything to watch in the "noise", they I'll go to a play thanks.
So bring it on - if that's really what's going to happen it's inevitable anyway. And that's sad for you, because in my future there is plenty of money for artists, plenty of great stuff you can get at instantly whenever you want without paying the earth and even a bit of money for the gatekeeper organisations with the smarts to evolve and change with reality. Your future seems rather more depressing and humdrum and it sounds like you're out of a job, but I can live with that.
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The Music Industry
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Oh, and btw
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Creating a standard tag for digital files to have players know what license that song has, so people can choose to listen to it or not, let make it easy for people to understand how malicious copyright really is.
How many people would choose to tick a box that says "You are selling your soul now" instead of ticking the "Free to distribute and listen" button?
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Every developer should put mechanisms on their apps that show the public the true face of copyright, don't hide the licenses or the permissions needed, put right there in front of the user, everytime he clicks to play some copycrap song the player should contact a server from the owner of that song and ask for permission, every time someone tries to send a music tagged with "all rights reserved" it should inform the user that they need permission to do so, maybe then people get tired of those nagging popups and start using free content that has no such restrictions, then I would love to see those copynuts go crazy and start releasing free music because they wouldn't be heard otherwise.
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Re:
It would make impossible to do playlists but heck who cares copyright is more important right?
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why??
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Re: why??
Chocolate Rain, anyone?
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Re: Re: why??
There goes the dishwater...
"Chocolate Rain, anyone?"
And... there goes the baby...
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Digital hasnt failed... there are plenty of tools....
http://www.youtube.com/watch?v=c7ANYvXP1hY
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