Former UMG Exec: Major Label Music Should Cost More And DMCA Safe Harbors Should Be Destroyed

from the st(r)eaming-pile-of-horseshit dept

If you're going to argue against YouTube, Spotify, etc. and the supposed wholesale screwing of artists, it helps if:

A. You're not a former member of an entity with decades of experience in screwing artists, and

B. You have some grasp of basic economic concepts.

Paul Young, a former director of licensing for Universal Music Group, has an op-ed posted at The Hill decrying the unfairness of streaming services and the wrongness of the DMCA. But any point he's trying to make is buried under ignorance and the demand that some artists be treated more equally than others.

The music community’s grievances are the following: (1) The DMCA allows internet service providers to build ad-based businesses built upon infringing content that the artists cannot effectively police through “notice and take down” procedures; (2) If and when service providers pay the artists, it’s on the providers’ hopelessly complex terms, resulting in payments that offer fractions of pennies per view; (3) Service providers offer “free” teaser music to the public when copyright owners should have the absolute right to control distribution of their music.

(1) The DMCA sucks, but it sucks the way studios and labels wanted it to. Now they don't like it and they want to change it to suck in a different way. They're also arguing for "notice and STAY down," which works out great for labels/studios… unless they're inadvertently targeting their OWN site with unvetted DMCA notices.

(2) "Hopelessly complex terms" are included in almost every royalty agreement. Service providers don't have a monopoly on this behavior.

(3) If copyright owners want "absolute control," they're free to pull their music, movies, etc. from services they don't like. Not many have, because not many are willing to give up this revenue stream they constantly claim isn't paying enough. As for the artists themselves, they have no "absolute control" -- not if they're signed to a label. Young may be writing about screwed artists, but he's really only interested in protecting the "rights" of gatekeepers.

He confirms this by claiming major labels deserve to be treated better than other copyright owners.

Free music streaming is fair only for original, home-based music. However, what the public streams mostly comprises of premium, professional content. This content is expensive to create, risky to market and requires many behind-the- scene professionals.

It's OK for service providers to screw the little guy. But don't mess with the majors. They have oh-so-many mouths to feed -- mouths that are more deserving of revenue than creators that don't cut them in on the deal. Young wants a better deal for artists, but with a caste system attached.

Here's more:

Every minute, 400 hours of footage is uploaded to YouTube, much of it synched to copyrighted music. [Note: citation needed.] This gives YouTube a distinct advantage over Spotify, Tidal, Apple Music and other services that do not offer user-generated streaming of works they do not control.

Much of this YouTube footage is monetized with paid ads. YouTube retains a minimum of 45 percent of this revenue, at prices it sets (but does not reveal), irrespective of the content’s creation costs.

Major label music should "pay" more -- whether it's a premium in subscription fees or a larger cut of advertising revenue payouts. Why? Because it costs more to make. But production costs have little to do with pricing -- and that includes advertising revenue.

If we lived in Young's world, tickets to "Paranormal Activity" (production budget: $450,000) would be $5 and tickets to "Avatar" (production budget $425,000,000) would be $4,700. [Productions costs taken from here.] Buying My Bloody Valentine's "Loveless" would bankrupt music fans just as certainly as it nearly financially destroyed the label that released it, while Owl City's basement-produced hit album could presumably be had for a handful of pocket change.

Young -- and the label he worked for -- appear to believe the internet owes them a living. But just them. Not the rest of these shabby artists the labels are unwilling to gatekeep for.

Once Young has finished deliberately misunderstanding how markets work, he moves on to the point of his op-ed, which begins with him recycling the stupid "built on the backs of artists" trope that presumes no service provider could ever become successful without engaging in copyright infringement. Then he goes right off the rails.

I would argue for stronger, industry-wide measures: a complete repeal of the safe harbor provisions of the DMCA and a prohibition on any unauthorized uploading of the property of others.

The first part is insane. Young actually wants service providers to be fully responsible for the actions of their users. Like the ongoing attacks on Section 230 of the CDA, this is a very lazy, very dangerous attempt to paint targets on the backs of those who have money, rather than perform the more difficult work of targeting the users who actually commit copyright infringement, make defamatory statements, etc.

This line of thinking says labels and studios need do nothing more than bitch loudly and expect everyone else to solve their problems -- whether it's websites, legislators, or internet service providers. This is how they "protect" their artists. By complaining stupidly and demanding the internet be torn apart and rebuilt to their specifications, damn the collateral damage.

The second part is just moronic. Every site prohibits unauthorized uploadings. Active efforts are made to police uploaded content and any site that wants to stay alive for long sets up a DMCA agent to respond to takedown notices. But it's never enough. Young apparently feels current prohibitions just aren't prohibitive enough, as though there were a magical tech solution somewhere that might prevent any unauthorized uploading from taking place ever again, if only service providers weren't so busy raking in billions on the backs of major label artists.

The whole op-ed is an embarrassment. But, unfortunately, it's par for the course in major label/studio arguments. It's worse than the blind leading the naked. It's the ignorant leading the angry. It's short-sighted rent-seeking by people who somehow think they can force more revenue out of service providers by destroying the protections that have allowed them to prosper.

Filed Under: copyright, dmca, major labels, paul young, safe harbors, takedowns
Companies: umg, universal music group

Early YouTube Musician Explains How Signing Major Label Deal 'Nearly Destroyed My Career'

from the have-heard-this-before dept

Digital Music News has an unfortunate story that we've heard too many times before: that of an independent musician successfully building a following... only to do a deal with a major label and see it all come crashing down. What's interesting is that the artist, Terra Naomi, was willing to lay out all of the details. It's worth a read, as it's a story that is pretty common. That is not to say that signing a major label deal is necessarily a bad thing. For some artists it may be the right decision. But the way that major labels work is that you'll only get enough attention for the label to determine if you're "the next big thing" where all its revenue will come from for the next few years... and if things don't seem to be going that way, you'll be pushed aside quickly. The standard stat given is that 90% of major label deals "fail." That does not mean they are not profitable for the label. The way RIAA accounting works, the labels can make out like a bandit on many of those record deals, while the artist gets hung out to dry. That appears to be the case with Naomi as well.

She points out that she was one of the first artists to build up a large fanbase solely based on her YouTube and MySpace accounts. Here was her most popular song, Say It's Possible: In the article, she talks about how she was connecting with fans and giving them a reason to buy. She talks about using YouTube to directly communicate with her fans, answering their questions, sending them messages and the like. And then, Universal Music came calling. And she made the very reasonable decision to sign with them, noting that while she had just pressed her own EP and quickly sold 5,000 of them in the first month they were available, she was still in debt, and a $250,000 advance was hard to pass up. It's easy to mock this decision, but you're probably not the one sitting there in debt with $250,000 on the table. That's why it's so tempting and why so many artists jump at the opportunity. It's not a crazy decision to make -- but it may present long term challenges, which is exactly what Naomi discovered.

Despite attracting attention for her success on YouTube, the label basically (1) had no understanding of YouTube and (2) recommended that she stop connecting with her fans. In other words, the exact opposite of what artists need to be doing in this internet connected era:

Contributing further to their feelings of betrayal was the mandate that came from my team at the label. They needed me to be “less accessible” and more untouchable. All these kids on YouTube saw me as an equal, as “one of them” – did I want to be a YouTube star, or did I want to be a rock star? They threw down the gauntlet, and there was no question in my mind. I wanted to be a rock star.

I handed over my mailing list and social media logins to the record label. I trusted this team of professionals to grow it into something much bigger than I could ever hope to create on my own. I backed off, disappeared, focused on writing songs and hanging out with the “right” people rather than connecting with my fans and the community I’d grown to love and depend on, prior to signing my deals. I figured I’d play by their rules for a little while, build my career into something even bigger, and reunite with my community once the label was satisfied with my rock star status.

Not surprisingly, it didn't work out that way. The label also pushed her to make a more commercial album, which she hated:

The producer I worked with told me we only had one shot, and I needed to make the album he wanted to make – with its “radio-ready” production – and once I had a few hits, I could make any album I wanted. So I made the album he wanted to make, and things didn’t happen the way he said they would. Instead of the big commercial radio success that would give me the freedom to seamlessly transition into the music I truly wanted to make, I had a big commercial flop (I think we sold something like 25,000 albums), an album I didn’t like, and I’d wasted what could have been the biggest opportunity of my life. The exposure I built independently on YouTube was more than the record label ever did for me, and I couldn’t believe I’d been so willing to hand it over for a longshot gamble on mainstream stardom.

And, of course, once she finally got out of the major label system, the audience that she had originally connected with, but forsaken, had moved on. As she notes:

My biggest takeaway from this time was a lesson in authenticity. It’s tempting to listen to people who want to change us, even just a little bit, and steer us in a direction that isn’t authentic. It’s easy to doubt ourselves, especially when we’re just starting out. We think people with more experience know better than we do about what’s best for us, and it’s simply not the case. We fall for the hard sell, the glitz and glamour, but for every massive major label success, there are dozens of disappointments and disastrous failures.

This isn't a huge surprise. For well over a decade we've been pointing out stories of successful artists who have built up huge fan bases online -- and the one factor that shows up again and again and again is authenticity. That's a huge part of the whole idea of connecting with fans. Actually being authentic is a great way to connect with like-minded fans, but it has traditionally gone against the cookie-cutter model of the major labels (though, to be fair, some are finally starting to figure this out, if only way too late).

Either way, Naomi's story is a good read, and should be worth thinking about for others who are tempted by the deals presented to them when they're first building a following. Put it in the group with the stories about RIAA accounting that further explain how a big advance may not actually be so big once you understand all the details.

Filed Under: major labels, music, music industry, terra naomi, youtube
Companies: google, universal music, youtube

No, The Major Labels Didn't Fake 2 Billion YouTube Views

from the manipulations... dept

The record labels have a long history of knowing how to manipulate key numbers to their advantage. Look how labels have manipulated the various charts over the years and you'll find that it's a big part of how they do business. So it probably struck little by surprise to hear that the labels were now being accused of massively manipulating YouTube view counts to make certain songs look a hell of a lot more popular than they really are. The only problem? It's not actually true.

The DailyDot -- who normally does a fantastic job -- broke the story that got most of the attention, reporting:

Google slashed the cumulative view counts on YouTube channels belonging to Universal Music Group, Sony/BMG, and RCA Records by more than 2 billion views Tuesday, a drastic winter cleanup that may be aimed at shutting down black hat view count-building techniques employed by a community of rogue view count manipulators on the video-sharing site.

Universal's channel is the one that took the biggest hit. According to figures compiled by the YouTube statistics analysts at SocialBlade, the record company's YouTube channel lost more than 1 billion views from its preexisting tally of 7 billion views Tuesday.

Lots of other publications then picked up on the Daily Dot version and suddenly the story was everywhere -- in particular claiming that the labels were being punished for faked video views. Only problem? That's not really true. The report suggests that YouTube has begun a big campaign against view inflation by YouTube users across the board. That part is true. But the untrue part is that the major labels were faking so many views. Instead, it turns out that most of the issue was just that the labels had moved their videos from YouTube to Vevo -- the online video site that the labels had started a few years ago (built on top of YouTube technology). As Billboard notes, the "de-spamming" effort did delete about 1.5 million views from Sony and Universal Music videos -- so there may be some funny business, but that's tiny compared to the 2 billion views that disappeared. But the reason those went away was much more mundane:

The answer comes in the second way that YouTube changed its view count. The company recently decided to remove view counts for videos that are no longer live on the channel, or so-called "dead videos." For Universal and Sony, that meant thousands of music videos that over the past three years slowly have migrated to the VEVO channel, which is jointly owned by the two companies. A senior label executive confirmed the migration....

That meant high-profile videos that once lived separately on the Universal and Sony YouTube channels have been relocated to Vevo. As a result, the views that those videos received during their time on the dedicated label channels were taken away in YouTube's latest "clean up" effort.

In other words, those views happened; they weren't "faked" or even double counted when they went on to Vevo. But because the videos are no longer on the channel, YouTube considers them "dead videos." They still live on in YouTube, just under a different channel.

Considering how many people have been sending this story over, I know lots of people would like to believe Sony Music and Universal Music faked 2 billion views and were now being punished for it, but it's just not the case.

Filed Under: fake, major labels, videos, view counts, youtube
Companies: google, sony music, universal music, vevo

Once Again: Just Because You Can Go Indie, Doesn't Mean You Need To

from the details-matter dept

For years and years we've argued that there still is a role for labels -- even major labels, if they are able to do more reasonable deals that embrace new opportunities, rather than shun them. In fact, we've pointed to many different examples of pop stars on major labels doing creative things to connect with fans and give them a reason to buy. Nothing in that says that major labels have no place any more. What we have noted is that the overall market has changed and there are a lot more options. We've also noted that, historically, being used to their gatekeeper position, the major labels have treated many artists badly, signing them to questionable contracts, where very, very few of them end up making out well.

The reality today is that you don't need to go that route if you don't want to. That doesn't mean that there is no need for major labels at all -- even if some will confuse those two statements. It just means if you want to be a successful musician, it's now a choice, rather than a requirement. In short: major labels can and do play a role in helping some artists. Historically, I think they've done a pretty bad job of it (mostly representing their own interests much more than the artists'), but that doesn't mean they don't do certain things well. And for artists who need those certain things -- with radio play being a big one -- it may be reasonable to do a deal with a major, though, preferably with eyes wide open and (if possible) on their own terms, rather than the labels'. The point of what I've said all along is that you can now succeed without the labels if you want to. But for those who wish to use the labels, that should be an option to. It's just that the rise of alternatives should mean that the labels become more willing to change their terms to be less artist-unfriendly. It also likely means that we'll see more overall competition and that many artists will find alternatives appealing. As such, the majors will be forced to adjust over time, even doing more reasonable deals.

I bring up all of this again, because there's a lot of attention this week over the news that Trent Reznor has signed some sort of deal with Columbia Records (owned by Sony Music) for his new(ish) band, How to Destroy Angels, leading a bunch of people to claim that he's "abandoning the DIY" market. You can see everything there is to know in the statement Reznor released last week, which doesn't go into many details, but it certainly hints at the idea that this is not a standard-issue major label deal:

Regarding our decision to sign with Columbia, we've really spent a long time thinking about things and it makes sense for a lot of reasons, including a chance to work with our old friend Mark Williams. There's a much more granular and rambling answer I could give (and likely will in an interview someplace) but it really comes down to us experimenting and trying new things to see what best serves our needs. Complete independent releasing has its great points but also comes with shortcomings.

I'll be interested to hear about the details eventually, because that certainly hints to there being much more to this than just "signing with a major." And there's nothing I disagree with in what he says. Being completely independent does have its great points, but it also makes certain things much more difficult. I don't think anyone's denied that. Of course there are also well known shortcomings when working with a major label. So, it's a case of tradeoffs, and when you have someone in a position to negotiate a more favorable deal that can hopefully minimize the bad side of a label deal, and get the good part, that seems like a perfectly reasonable strategy for those who want it. I think that Reznor likely would have been fine staying indie for this release, but depending on what he's doing, there may be perfectly reasonable arguments for doing this deal.

I know that there are some people who think that everyone absolutely should go indie, but I've never said any such thing, nor do I believe it. I think that going indie is now a much more viable option than it's been in the past, but going to a major label certainly does not preclude being innovative. In many ways, I think of it similarly to the way I view startups as well. It's less and less necessary to raise venture capital to do a startup -- but that doesn't mean that raising venture capital is necessarily a bad thing. There are certain opportunities that really require it. If you go in with your eyes wide open and can negotiate a favorable deal that lets you do what you need to do, more power to you. In the long run, I think that there are much bigger opportunities in focusing on better connecting with your fans, and historically major labels have sometimes made that more difficult. But if an artist sees good reason to work with a major, there's nothing inherently wrong with it.

Filed Under: business models, diy, how to destroy angels, major labels, trent reznor
Companies: columbia records, sony

EMI Universal Deal Cleared, Giving One Company Veto Rights On Pretty Much Any New Music Service

from the well-that-could-be-a-problem dept

This isn't a huge surprise, but EU and US regulators both approved Universal Music's deal to buy EMI today. Under the terms from the EU, they will have to sell off some EMI assets, including the iconic Parlophone label. There is a part of me that thinks that the complaints against this deal are a bit overblown, seeing as it's about linking up two dinosaurs who've failed to adapt -- and bringing them together won't fix any of the major problems those two labels face. But there are some very real concerns about how this could impact innovation online. For better or for worse, setting up digital music services today requires doing deals with the major labels. If you're just doing webcasting (i.e., broadcast) there are agreed upon -- but insanely high -- rates you can use (more on that later today). However, if you're doing anything interactive or offering digital downloads, then you have to cut deals.

A story earlier this week at the Huffington Post, does a really nice job laying out how this deal effectively gives a few Universal Music execs veto power over any new music startup. Because if you're launching a music service today, you generally want it to offer a lot of popular music, and between Universal Music and EMI, they control a huge portion of that market -- much of it historical back catalog stuff, but also some of the more popular mega-acts today. The HuffPo writeup notes that Steve Jobs played the labels off of each other to get them to sign on to iTunes. But, today, the new UMG could control that process.

According to Paul Vidich, a former Warner Music executive who closed the iTunes deal, the pending merger between Universal and EMI could put an end to that state of affairs.

"Without a UMG-EMI license, they won't have a business," said Vidich, referring to new digital startups. "Within the new UMG-EMI there will be only a handful of senior executives who make these key licensing decisions. So this small group will become the gatekeepers for music startups that require these licenses. The psychology, pay packages and strategic interests of these executives will have an outsized impact on diversity and innovation in the entire online music industry."

Remember, Universal is the company whose former CEO, Doug Morris, once gleefully explained how he didn't understand technology and didn't even try to hire someone who did, because he wouldn't know how. Amazingly, his board let him keep his job for many years (he's since moved on to head up Sony Music). Morris' replacement at UMG, Lucian Grainge, has talked about how the CD format is important to the company's future. And he's now basically the guy with veto power over any new music service.

That does not bode well for the online digital music marketplace.

Filed Under: consolidation, digital music services, major labels, music
Companies: emi, riaa, universal music

And Then There Were Three: Bye, Bye EMI

from the another-one-bites-the-dust dept

The major labels have been dropping one by one. Of course, they never "die out" completely... they just get weak enough until someone buys someone else. The Big Six became the Big Five when Universal took over Polygram. The Big Five became the Big Four when Sony (formerly CBS Records) and BMG effectively merged. And, now we're down to the Big Three as Universal and Sony pick off the remains of EMI. This was pretty much a foregone conclusion that there would be some sort of merger, when Citibank took over EMI after EMI defaulted on its debt obligations. Universal is picking up the music division for $1.9 billion while Sony gets the publishing side for $2.2 billion. Universal was already the world's largest record label, so adding the likes of the Beatles, Coldplay and Katy Perry to its roster must be appealing. Of course, there's some concern among regulators that this raises antitrust questions, but I really don't see the issue here. Universal Music has been self-imploding by failing to adapt. I don't see how merging it with EMI will do much other than to allow it to continue to be a nuisance and continue to not understand how to embrace the internet. Besides, spending $1.9 billion for more back catalog, rather than investing that kind of money into actually adapting? If anything, this simply accelerates the decline of these labels.

Filed Under: major labels, mergers, record labels
Companies: citigroup, emi, sony, universal music group

How Payola Works Today... Or Why You Only Hear Major Label Songs On The Radio

from the who-listens-to-radio-any-more? dept

Over at the Tunecore blog, former Rykodisc President George Howard has a post up explaining how payola works today in the world of major labels and radio stations. While I know that a large percentage of folks reading this here are rushing to the comments to declare "ha! who listens to radio any more!" the fact is that a ton of people do, and for the major labels, it's still a key (if not the key) way to "break" an act. And even though the labels keep getting dinged every decade or so for payola, the process never seems to change much, other than greater efforts to separate out the transactions so that the record labels can pretend that they're not bribing radio station employees, even though everyone knows that's exactly what's happening:

Getting a song �added� to a station�s playlist to get a certain number of plays per week involves a rather byzantine process that brings in various parties, called independent promoters (�indies�). These �indies� are first paid by the label. It�s important to note that the money the indies receive isn�t necessarily compensation paid directly to them for getting Program Directors to get a song played. Rather, they work more like an intermediary to pass the label�s money to the radio station. These indies, with the money paid to them from the labels, pay the radio station money for various listener give-aways, bumper stickers and so on. To top it off, these very same indies are often also paid a second time by the stations themselves as a consultant to advise the stations on what songs they should play.

Because of this, the major labels absolutely dominate radio airplay. Independent labels could try to hire the same indie promoters, but won't get the same attention anyway:

Here�s why: You�ve come to these indies, and they�ve gone to the labels, and they�ve taken your money, and they know that you�re probably not coming back any time soon. On the other hand, the majors are coming every week with money and new artists. Who would you prioritize if you were in the indie/radio station�s shoes?

Now, as Howard notes, and many of you probably have already realized, this is not a sustainable system. Because if radio keeps playing crappy songs based on bribes rather than quality, in an age where there are greater and greater alteranatives, the system won't hold. More and more people will go elsewhere, where there's more choice and fewer guys with briefcases full of cash making the decisions.

If you're wondering exactly why the labels have been trying to shut down popular hip hop blogs recently, look no further than this story. Such blogs have really become "the new radio" for creating hits for the younger generation. But, unlike the old radio, the major labels don't "control" these blogs in the way they control radio. While some of it may just be the left hand not knowing what the right hand is doing, there are at least some who see this as an opportunity to "regain control." Forcing blogs offline and/or trying to significantly limit them is a pure power play by the labels against hip hop blogs. It's got nothing to do with copyright or being worried about someone's songs leaking. It's why the RIAA is out there sending takedowns on music that a Universal Music employee purposely put online for free.

Now I've said before that I'm not convinced that payola for radio play is necessarily wrong or bad. A play on radio is effectively a commercial for that music/musicians. And paying for commercials is (obviously) fairly common. Is it really so crazy that some in the industry want to "buy" spots? I get the argument concerning the lack of transparency. And, in fact, as technology becomes more widespread, and as the next generation of services launches, radio stations are going to be forced to move away from payola not because they don't like the practice... but because people won't be relying on radio so much for leaning about new songs. For the time being, it's likely that these kinds of situations will last. But consumers just aren't going to stand for it that much longer.

Filed Under: major labels, payola, radio

As eMusic Embraces Major Labels, Its Indie Core Is Leaving

from the as-if-that-wasn't-predictable dept

eMusic built itself up on a reputation for being a great way to get access to all sorts of indie music. The service, which has been around for ages, and pioneered offering authorized DRM-free MP3s, worked by letting you pay a certain subscription fee per month, which allowed you to download a specific number of songs. Over the years, the price went up, which upset some users, but things really took a turn last year when the company suddenly decided that it absolutely needed the major record labels in its collection. It started with the disastrous idea of adding Sony Music tracks at the same time as a big price increase... and then quietly trying to remove features (and then more features) without telling people. It also appeared that eMusic was deleting comments from critics. While the company denied this, there was a lot of evidence to support the claim.

Since then, the company has also added music from Warner Music and (just recently) Universal Music... but it hasn't really helped. Its userbase has remained about the same, so if the new music is enticing new subscribers, they're being offset by defections. But, more importantly, it looks like some of the bigger name indie labels are pulling their music off the site, as they can't come to a reasonable agreement with eMusic.

So, if I'm reading all this correctly, it sure looks like the company did quite a deal: it signed up major labels to get music that most of its subscriber base didn't want in the first place. In doing so it took away lots of popular features and jacked up prices. Now, the service is losing the content of some of the biggest indie bands.

This seems like a case study in not knowing your own audience.

Filed Under: fans, indie, major labels, music
Companies: emusic

Amanda Palmer And OK Go Get Together To Celebrate Being Dropped From Their Record Labels

from the party-time dept

Recently, we've noted some similarities between Amanda Palmer and the band OK Go, in that both had been signed to major record label deals, both had built up an amazing (and amazingly loyal) group of fans through various means (different for each) using methods totally outside of their major label marketing effort (which was somewhat lacking in both cases)... and last month, both were officially dropped from their label deals.

In the past, getting dropped from a major record label deal was seen as a bad thing -- a sign of trouble for the band. But in both of these cases, the process of getting dropped was initiated by the musicians themselves, who realized they could do much more outside of the major label system, than within it. So it seemed like a bit of serendipity, that both acts had aspects of their ongoing tours overlap in San Francisco this week -- leading to an event put together by Creative Allies at the Ex'pression College for the Digital Arts, where both acts performed and did some chatting about music and the music business as part of a webcast. Thanks to Amanda, I was able to attend in person with a small group of folks in the studio, and it was a fun time -- as both acts basically celebrated their freedom from their record label deals.

You can see the webcast in two parts below (not sure why it's two parts, and it was not easy at all to find the second part):


It's yet another reminder of how the role of the major labels is totally changing. Historically, the only way to be successful in the music business was to get a major label deal. They were the gatekeepers, and without a deal, you were out of luck. Being dropped from a major was effectively the end of your career as a performer with a very small number of exceptions. But, these days, artists are realizing that there's so much more that can be done without major label help, and that actually being on a major can hinder or block those opportunities, that it's become a cause for celebration when you get "dropped" -- or, perhaps, more accurately, freed!

While there's plenty of music, there were two key points on the whole business model side of things that came up that are worth repeating (in case you don't feel like watching both videos -- though, you should, since they're pretty cool). The first is that during the interview session between acts, Amanda was asked about "direct to fan" stuff, and she made a point that I've been trying (perhaps unsuccessfully) to highlight for quite some time: and that's that each act needs to do something that fits with what works for them. Her fear is that there's so much talk about "direct-to-fan" offerings, that people are going to start just trying to all do exactly the same thing, rather than charting a course that's unique to them.

We've tried to point this out as well, in noting how different the various success stories are. Inevitably, of course, someone says that we're saying everyone should do what one of these artists are doing (a favorite of critics is the false idea that we've said everyone should go to Disneyland with some fans, like Josh Freese). But that's not the case at all. For Freese, it was a part of his personality (and his life, as he basically grew up at Disneyland, and performed there as a kid). The whole point of learning how to better connect with fans and giving them reasons to buy, is not that everyone has to use Twitter, or that everyone has to offer "tiered" offerings. Or that everyone has to tour, even. It's that there are many different ways that each artist can connect with fans and give them a reason to buy directly, and that each artist has to figure out the way to apply the concept in a way that fits with their own personality and sensibilities. It's great that Amanda was able to really drive home that point during her interview.

The second part is actually an amusing exchange between OK Go and Amanda after OK Go's second song. Lead singer Damian Kulash asks the audience for questions, and if you listen closely on the video, you can hear Amanda ask about how the band was able to not just get dropped by Capitol/EMI, but also to take the last record with them (something she was unable to do with Roadrunner/Warner Music). Kulash tries (not all that successfully) to dance around the legalities by setting up a hypothetical version of EMI -- but basically admits that with EMI more or less fighting every day to avoid defaulting on massive loans -- while at the same time fighting with the Beatles and other top acts, the label apparently found the fact that Kulash might occasionally pen op eds for the NY Times that made the label look totally clueless on digital things, that it was better to just usher the band out the door as quickly as possible. And, as such, the band had a bit of leverage, which was used to not just get out of the contract, but to take the last record with them.

Of course, the business model stuff was a minor part of the overall evening, which really was very much about music, and a rather celebratory mood from both acts about their freedom to stretch out creatively -- as both demonstrate beautifully in their separate performances. Among the many highlights, there's Kulash forgetting lyrics and later getting a case of the giggles in the middle of the band's hit song "Here It Goes Again" -- plus a rendition of "What To Do" performed entirely by the band using a table full of hand bells... And Amanda playing a song from her upcoming EP of Radiohead covers played on the ukulele because, as she noted, she can.

Filed Under: amanda palmer, business models, major labels, music, ok go, record labels

The Increasing Irrelevance Of The Major Record Labels

from the who-needs-you? dept

Yesterday I attended the always worthwhile SF Music Tech Summit. This has to be the fourth or fifth time I've gone, and I always find that after it's all over and I've had some time to think about it, I recognize one key theme that kept hitting me over and over again throughout the event. This time it was the increasing irrelevance of the major record labels. I've been to a lot of music industry events in the past few years, and there's no doubt that the presence of the majors at various events continues to decline (though, they still seem to have no problem wasting ridiculous sums of money on lavish parties at some events). While the decreased presence at Music Tech might have been a result of the overlap with another industry event, NARM, which the labels almost certainly deem more important, what was more telling was the audience's reaction to the major labels.

The "big draw" at SF Music Tech was certainly the panel in the morning that had Ben Folds (who you hopefully know), Michael Tilson Thomas (again, who you hopefully know, but if not, from the San Francisco Symphony), Jack Conte (from the viral sensation Pomplamoose) and Glenn Otis Brown (from YouTube and Creative Commons). That panel was certainly entertaining, but tragically there wasn't very much time for any of the participants to speak, and with each one showing a video (often kinda long), the whole thing felt kind of rushed. But what struck me wasn't so much what anyone on that panel said... but what happened as soon as the panel ended. The very next "panel" was a discussion between a guy at Warner Music Group and someone at Cisco about the "direct to fan" artist websites that Warner Music has set up using Cisco's Eos platform.

Not so long ago, you would think that a new technological offering via a major label would be something of interest to this crowd. But, the audience had no interest at all. While the organizers tried to keep people around, lots of people flooded the previous panel's speakers while many more quickly evacuated the room. Probably one-third of the people were still there by the time the next panel actually began. That says something. In the past, the only way to be successful in the music business was to go through the major label gatekeepers. These days, almost no one believes that any more. In fact, many have realized that the path to success often means getting as far away from the majors as possible. Even if what Warner was doing was interesting (and, honestly, what was presented was full of buzzwords and hype, but little that seemed particularly innovative) just the fact that no one even seems to care says a lot about what people think of the major labels these days.

The final panel of the day, on "Music & Money," included both Michael Robertson and Tim Quirk -- both of whom have long been critics of the record labels and their business practices. It gave them a chance to (accurately) gripe about the record labels and how they've spent the last decade (or longer) shooting themselves in the foot time and time again by basically killing off every innovative new startup that popped up by demanding ridiculous fees just to operate. Honestly, that panel could have been a bit more interesting if it had included a representative from a major label to absorb some of the punches (and even to punch back), but one audience question summed up the whole thing:

"If the major labels are such a pain to work with, why work with them at all?"

The guy pointed out that there are tons of independent bands more than happy to embrace innovative new services. The real answer, of course, is that it's not that simple. While there are tons of bands that are innovative and willing to work with new services, the music business is still (even if it's changing a bit) a hit driven business. A music service without the hits doesn't do well. That's just the facts, right now. If you're offering a streaming music service or a music locker and major label content is blocked, you've cut your potential audience down by a ton.

But, still, the question -- and the answer -- is telling of the major label's stature in the industry these days. Their position now is back catalog filler. That's more or less how people view the major labels. There's a lot less interest in working through the old gatekeeper system. The labels will last for a long time (though, perhaps in different forms and under new ownership...) due to their back catalog and the need for music services to have access to those songs. But I don't think there's anyone left out there who looks to the major labels to lead the music industry any more (except, perhaps, some out-of-touch politicians).

Filed Under: major labels, music industry, record labels