This posting went live at the Huffington Post some time ago – I thought it made sense to make it available here as well.
The Democratization of the Music Industry
(The original posting can be found here.)
Due to the advent and adoption of the Internet, digital media and hardware by the masses, control of the global music industry has being broken. For the first time, all music creators can choose to be their own record label – there are no longer subjective gatekeepers controlling who gets let “in”, promoted, exposed and made available to the masses, the choice now becomes ours.
For the past century, artists could record, manufacture, market, and, to some degree, promote their own music, but no matter if they were The Beatles, Elvis or Led Zepplin, they could not distribute it and get in placed on the shelves of the stores across the country, the required costs and infrastructure of the physical world were just too massive – a 500,00 square foot warehouse staffed with 30 people, trucks and inventory systems, insurance, a field staff of 30 people walking to music stores leveraging, begging, pleading and paying to get the CD, album, 8-track, wax spool etc on the precious shelves of the retail stores.
Without the music available to buy, there was no way for it to sell
– and this is the Music BUSINESS after all. Record Labels made artists
famous and made money off that fame by selling the music the bands
created. The record labels exclusively had the relationships with the
distributors (and in the case of the “4 major record labels” the same
company owns both). Therefore, with only one means to the desired end,
the goal for many artists was to get “signed” to a label.
Record labels were in a very unique position of power due to their
exclusive access to distribution, they were not only the singular
gatekeepers to a career for an artist by “signing” them to an exclusive
contract, but they were also the subjective “deciders” (to use a
Bush-insm) as to what music was pushed out and promoted to the masses.
With a “signing”, the labels acquired exclusive rights to and from the
artist. In return, the label advanced money while providing the
relationships, expertise and infrastructure to record, manufacture,
market, promote, distribute and sell the music. Which brings us to an
important point, of all the artists and music creators in the world,
less than 1% of 1% of 1% have ever been chosen by the labels due to the
risks and economics of the “brick and mortar” world. Of all the music
created in the world, even less has had the opportunity to be
discovered and heard by the masses.
And then the world changed thanks to the Internet and digital media.……
As I write this, iTunes ranks as the 2nd largest seller of music in
the US – only Walmart’s physical stores sell more. Digital revenue is
real, and there is a lot of it being earned. Sales in iTunes alone can
create enough revenue to allow true financial success. Don’t take my
word for it, just look at some of the sales by the following unsigned
artists utilizing the Net for both digital distribution and marketing;
Kelly sold over 500,000 songs in 5 months, Eric Hutchinson sold 120,000
songs in three weeks, The Medic Droid sold over 25,000 copies of a
single in 45 days, Crank Squad sold over 20,000 songs in 30 days,
Secondhand Serenade sold over 225,500 songs in 3 months, Jason Reeves
sold over 20,000 songs in December, 2007 and list goes on and on.
Unlike a physical store, digital stores like iTunes have unlimited
shelf space allowing everything to be in stock. If the virtual shelves
fill up, another hard drive is popped in to make more shelf space. In
addition, inventory never runs out, the music simply replicates itself
on demand each time it is bought.
For administrative reasons, most of the digital stores, like an
iTunes, do not do deals directly with the artists allowing them to
stock their music on their digital shelves – frankly, customer support
for millions of bands or Uncle Larry, who insists he can do the best
version of “How Much Is That Doggy In The Window” are not what the
digital stores are about. The stores prefer to get the music from
music industry middlemen that aggregate music and deal with the
administrative headaches (i.e. a record label as one example).
Therefore, the means to meaningful distribution has been reduced from “access AND infrastructure” to simply “access”.
Through websites like TuneCore
(full disclosure here, I am the CEO and founder), for the cost of a six
pack and a pizza (around $30), ANYONE can now literally be their own
record label and have the same distribution as any “signed” artist.
However, unlike a “signed” artist, this new model allows artists to
keep all their rights and receive all the money from the sale of their
music via a non-exclusive agreement that can be cancelled at any time,
all while having infinite inventory with no up front cost or risk.
This is analogous to telling someone 15 years ago that if they paid
$30, every Tower Record store (god bless its now departed soul) around
the world would have their album on its shelf and never run out of
stock.
In regards to music marketing and promotion, music marketing and
promotion is simply giving music to media outlets in hopes that they
play it, talk about it or write about it. In the old days, there were
three main media outlets that provided the general population a way to
mass discover music: commercial radio, TV (i.e. MTV, VH1, BET) and print magazines like Rolling Stone.
These three media outlets created a second subjective filter as they
chose from a pool of artists promoted to them via the labels which
bands to show videos from, write about or play on the radio. If an
artist was not on a label, the possibility of getting exposure from any
of these three outlets was virtually impossible – MTV in particular.
Just getting pitched to any three of these media outlets also
required a label due to the costs (i.e. make a video, greasing the
palms of the programming directors at commercial radio stations, hiring
a publicist etc) and connections.
Once again, enter the digital age. The Internet created new media
outlets and access for anyone to have global reach to others.
Commercial radio is being replaced by Internet based recommendation
streaming radio stations (i.e. LastFM etc) that let all music in for
programming, not just music pushed from the labels. MTV (when they
actually played music videos and nothing was being pimped out, dated or
real world-ed) has been replaced by sites like YouTube – all anyone
needs now is a cell phone to make their own video to broadcast to a
potential Internet viewing audience of hundreds of millions of people
(and before you doubt the power, just think about how Virginian Senator
George Allen’s “Macaca” YouTube video clip saturated into the mainstream). Print magazines have been replaced by MP3 Blogs like Stereogum, Gorrila Vs. Bear, PitchforkMedia, My Old Kentucky Blog and more. These combined with social networking sites like iLike , MySpace
and more have limitless circulation and the ability to allow readers
and users to form a community that listens to, shares, rates and
comment on the music.
Each person in and of themselves can become their own commercial
radio station, magazine and/or TV network reaching tens of millions of
people.
With the restrictions of the physical world removed even places like
iTunes have new vehicles allowing people to discover and share free
music (make sure to snag a copy of 34 Stars, a 34 artist compilation
album available for free download on iTunes.
Subjectivity and filters have been removed. All music can be
available to be bought, discovered, downloaded, shared and heard via
the masses. It is truly the democratization of an industry.
As far as the other label functions, these are now affordable and
accessible for the everyman. For the cost of one day at a studio, you
can go to a place like Guitar Center (disclosure
again – Guitar Center have an equity position in TuneCore) and get high
end, inexpensive high quality gear to record at home along with lots of
knowledgeable experts working the floors to educate and advise. With
the removal of a physical medium to deliver the music (i.e. a CD), the
barriers and expenses created by physical manufacturing have been
removed.
Despite allowing everyone in being both exciting and frightening,
there are a few undisputable facts – the control that previously
existed in the hands of the four “major labels” has been significantly
reduced. What we as the “masses” now have access to discover, share and
listen to is much larger and wider. Hopefully access to all of this
new music will inspire us, piss us off and open the doors to experience
whatever we want, not what a corporation or media outlet decides we
should want. It is then the public, not a corporation that gets to
decide what is bad, good etc. The revolution (pun intended) has truly
begun.
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