| The mighty David Byrne on much the same subject
Posted by Felix on July 24, 2008, 7:48:10, in reply to "Music industry to tax downloaders"
David Byrne's Survival Strategies for Emerging Artists — and Megastars
By David Byrne
Full disclosure: I used to own a record label. That label, Luaka Bop, still exists, though I'm no longer involved in running it. My last record came out through Nonesuch, a subsidiary of the Warner Music Group empire. I have also released music through indie labels like Thrill Jockey, and I have pressed up CDs and sold them on tour. I tour every few years, and I don't see it as simply a loss leader for CD sales. So I have seen this business from both sides. I've made money, and I've been ripped off. I've had creative freedom, and I've been pressured to make hits. I have dealt with diva behavior from crazy musicians, and I have seen genius records by wonderful artists get completely ignored. I love music. I always will. It saved my life, and I bet I'm not the only one who can say that.
What is called the music business today, however, is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that's not bad news for music, and it's certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.
Where are things going? Well, some people's charts look like this:
Some see this picture as a dire trend. The fact that Radiohead debuted its latest album online and Madonna defected from Warner Bros. to Live Nation, a concert promoter, is held to signal the end of the music business as we know it. Actually, these are just two examples of how musicians are increasingly able to work outside of the traditional label relationship. There is no one single way of doing business these days. There are, in fact, six viable models by my count. That variety is good for artists; it gives them more ways to get paid and make a living. And it's good for audiences, too, who will have more — and more interesting — music to listen to. Let's step back and get some perspective.
What is music?
First, a definition of terms. What is it we're talking about here? What exactly is being bought and sold? In the past, music was something you heard and experienced — it was as much a social event as a purely musical one. Before recording technology existed, you could not separate music from its social context. Epic songs and ballads, troubadours, courtly entertainments, church music, shamanic chants, pub sing-alongs, ceremonial music, military music, dance music — it was pretty much all tied to specific social functions. It was communal and often utilitarian. You couldn't take it home, copy it, sell it as a commodity (except as sheet music, but that's not music), or even hear it again. Music was an experience, intimately married to your life. You could pay to hear music, but after you did, it was over, gone — a memory.
Technology changed all that in the 20th century. Music — or its recorded artifact, at least — became a product, a thing that could be bought, sold, traded, and replayed endlessly in any context. This upended the economics of music, but our human instincts remained intact. I spend plenty of time with buds in my ears listening to recorded music, but I still get out to stand in a crowd with an audience. I sing to myself, and, yes, I play an instrument (not always well).
We'll always want to use music as part of our social fabric: to congregate at concerts and in bars, even if the sound sucks; to pass music from hand to hand (or via the Internet) as a form of social currency; to build temples where only "our kind of people" can hear music (opera houses and symphony halls); to want to know more about our favorite bards — their love lives, their clothes, their political beliefs. This betrays an eternal urge to have a larger context beyond a piece of plastic. One might say this urge is part of our genetic makeup.
All this is what we talk about when we talk about music.
All of it.
What do record companies do?
Or, more precisely, what did they do?
* Fund recording sessions
* Manufacture product
* Distribute product
* Market product
* Loan and advance money for expenses (tours, videos, hair and makeup)
* Advise and guide artists on their careers and recordings
* Handle the accounting
This was the system that evolved over the past century to market the product, which is to say the container — vinyl, tape, or disc — that carried the music. (Calling the product music is like selling a shopping cart and calling it groceries.) But many things have changed in the past decade that reduce the value of these services to artists.
For example:
Recording costs have declined to almost zero. Artists used to need the labels to bankroll their recordings. Most simply didn't have the $15,000 (minimum) necessary to rent a professional studio and pay an engineer and a producer. For many artists — maybe even most — this is no longer the case. Now an album can be made on the same laptop you use to check email.
Manufacturing and distribution costs are approaching zero. There used to be a break-even point below which it was impractical to distribute a recording. With LPs and CDs, there were base manufacturing costs, printing costs, shipping, and so on. It paid — in fact, it was essential — to sell in volume, because that's how many of those costs got amortized. No more: Digital distribution is pretty much free. It's no cheaper per unit to distribute a million copies than a hundred.
Touring is not just promotion. Live performances used to be seen as essentially a way to publicize a new release — a means to an end, not an end in itself. Bands would go into debt in order to tour, anticipating that they'd recover their losses later through increased record sales. This, to be blunt, is all wrong. It's backward. Performing is a thing in itself, a distinct skill, different from making recordings. And for those who can do it, it's a way to make a living.
So with all these changes, what happens to the labels? Some will survive. Nonesuch, where I've done several albums, has thrived under Warner Music Group ownership by operating with a lean staff of 12 and staying focused on talent. "Artists like Wilco, Philip Glass, k.d. lang, and others have sold more here than when they were at so-called major labels," Bob Hurwitz, president of Nonesuch, told me, "even during a time of decline."
But some labels will disappear, as the roles they used to play get chopped up and delivered by more thrifty services. In a recent conversation I had with Brian Eno (who is producing the next Coldplay album and writing with U2), he was enthusiastic about I Think Music — an online network of indie bands, fans, and stores — and pessimistic about the future of traditional labels. "Structurally, they're much too large," Eno said. "And they're entirely on the defensive now. The only idea they have is that they can give you a big advance — which is still attractive to a lot of young bands just starting out. But that's all they represent now: capital."
So where do artists fit into this changing landscape? We find new options, new models.
The six possibilities
Where there was one, now there are six: Six possible music distribution models, ranging from one in which the artist is pretty much hands-off to one where the artist does nearly everything. Not surprisingly, the more involved the artist is, the more he or she can often make per unit sold. The totally DIY model is certainly not for everyone — but that's the point. Now there's choice.
1. At one end of the scale is the 360, or equity, deal, where every aspect of the artist's career is handled by producers, promoters, marketing people, and managers. The idea is that you can achieve wide saturation and sales, boosted by a hardworking machine that stands to benefit from everything you do. The artist becomes a brand, owned and operated by the label, and in theory this gives the company a long-term perspective and interest in nurturing that artist's career.
Pussycat Dolls, Korn, and Robbie Williams have made arrangements like this, selling equity in everything they touch. The T-shirts, the records, the concerts, the videos, the BBQ sauce. The artist often gets a lot of money up front. But I doubt that creative decisions will be left in the artist's hands. As a general rule, as the cash comes in, creative control goes out. The equity partner simply has too much at stake.
This is the kind of deal Madonna just made with Live Nation. For a reported $120 million, the company — which until now has mainly produced and promoted concerts — will get a piece of both her concert revenue and her music sales. I, for one, would not want to be beholden to Live Nation — a spinoff of Clear Channel, the radio conglomerate that turned the US airwaves into pabulum. But Madge is a smart cookie; she's always been adept at controlling her own stuff, so we'll see.
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