Tuesday, May 31, 2011

The Future of Music (Biz), Part I

Now that this month's song is out, time for more thoughts, musings and opinions as I prepare the next one.

The landscape of the music industry - at least when it comes to the mainstream consumption of music - is changing, and with those changes come a great number of questions. The source of the questions below I will reveal in a future post (I like to add some mystery; I'm like the movie Memento, only without the kick-ass plot), but for now I'll just take a second to explore them.

How can the people who used to work at labels continue to have careers bringing valuable services to artists now that the landscape has changed?

Are labels going to disappear? I highly doubt it, though it wouldn't surprise me to see a noticeable reduction. But what I do believe is that the market has shifted. In the old market, artists had to chase labels with all their might; you'd push your best friend in front of a car if it meant a slim chance that an A&R guy from one of the labels would show up at your show. If you were lucky enough to get the attention of the label, you had to be prepared to take a wafer-thin sliver of the pie, and the rights to your music were forfeit to publishing companies.

In the new market, the Internet and social media have turned the services offered by labels, agents, and publishers into a luxury rather than a necessity. Recording, marketing, distribution, merchandising... all of these areas are available to artists directly such that they can quite easily develop an independent career. In this new climate, we may see more labels courting artists rather than the other way around, and there will be far greater negotiating power in the hands of the artists.

So how can former label employees survive in this scary new world?  Even if an independent artist doesn't require the full suite of services pitched by a record label, it is quite likely they will still need assistance in one or more areas, even if it's simply because they don't have time to manage it themselves. What I expect we'll see is the formation of businesses providing specific services directly to their end customer. Artists will commission their own music videos, order their own merchandise, etc. In this age, the businesses that survive will be the ones that recognize that these days, the musicians are the ones in control.

How much money is actually being made in this space that never gets tracked as part of the music industry?

I can't begin to guess at the amount, but I bet it's growing more significant by the day. When independent musicians avoid conventional entities like Ticketmaster as well as contracting goods and services outside the umbrella of a label, a lot of money won't show up in the industry charts.

One big mystery is the cash flow from patronage. While sites like Kickstarter almost certainly have metrics that can be tracked, I'm sure this currently shows up nowhere in the mainstream numbers. Then there's money that's almost impossible to track that comes from fans who hand their favourite musician or band a $20 after the show or send them some money via PayPal, either as compensation for some downloaded music or simply as an act of supporting an artist they care about.

What percentage of full time professional artists are making a living, and how does that compare to the old record biz?

At the recent eG8 conference in France, John Perry Barlow - Founder of the Electronic Frontier Foundation and former Grateful Dead lyricist - gave a stellar performance as a last minute invitee to a panel on Intellectual Property and Cultural Economy in the Digital Age. At one point, he makes the claim that right now there has never been as many musicians without day jobs in our history.

I have little doubt he's right. Never has it been so easy for artists to reach their audience. Never has it cost an artist so little to produce a professional product. Never has data and statistics been so readily available to make productive and efficient choices in professional endeavours. The barriers for entry are the lowest they have ever been to make a decent living at your craft.

I'm still fairly sure that the number of musicians without day jobs is still in the single digit percentages, and I would guess that to date the increase couldn't be more than a percentage point or two. But I suspect that this is partially due to a lack of awareness by many musicians of this shift in the marketplace or how to deal with it. Once this awareness kicks in and some growth in knowledge and attitude takes place, we'll almost certainly see the percentage of full-time professional musicians extend into double digit percentages.

Anyway, that's my two cents. Agree? Disagree? Feel free to fire off something in the comments; I enjoy discussing this stuff.

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