Fix the record industry!

[Phil O'Keefe]

This thread over on SSS caught my attention and got me thinking about what's wrong with the music / record industry today. And there's a lot of good comments about what's wrong... but what I'd like to ask you folks is, "how would you fix the record industry?" What would you change if you were suddenly in a position at the top of one of the majors? Would you scrap everything and start over? How would you pay for that / convince the board not to fire you? What, if anything would you keep? What about downloads and online marketing and sales?

 

Think outside the box and try to consider it from every angle - artists, studio folks, shareholders, hardware, distribution, royalties, etc. etc.

[RickTaylor]

 

This thread over on SSS caught my attention and got me thinking about what's wrong with the music / record industry today. And there's a lot of good comments about what's wrong... but what I'd like to ask you folks is, "how would you fix the record industry?" What would you change if you were suddenly in a position at the top of one of the majors? Would you scrap everything and start over? How would you pay for that / convince the board not to fire you? What, if anything would you keep? What about downloads and online marketing and sales? Think outside the box and try to consider it from every angle - artists, studio folks, shareholders, hardware, distribution, royalties, etc. etc.

 

 

Screw the majors... Support independents.

 

As to how to go about that... I think the indies have a snowball's chance in hell. ...Offer a better product at a better price... try to develop rarity value ...find some way of making things "special" again. Cut down on the glut of meaningless crap... Start a movement... Start a religion... Boycott I-Tunes, Yahoo, Best-Buy, Target, Walmart, peer to peer services, etc...

[Greenshoe]

If I were head of a major label, I'd try to find the first private equity buyer to buyout the label so I can take my big exit package and start a porn production company that outsources its performers ("Dirty Deeds Done Dirt Cheap"). Because it's probably going to get far worse for the major labels for the next while, might as well cash out now...

 

In all seriousness though, I would run a major label more like a book publishing company, and less like a film studio.

 

Major labels today are run like film studios - so much money tied up in a few appointed "franchises". I'm willing to bet that they spend more than 90% of their marketing/promo efforts and dollars on less than 10% of their artist roster, hoping for the same kind of "hit". In other words, for every 10 acts they sign, they're only hoping for 1 mega-star to pay for the 9 unprofitable acts they never gave a chance to develop in the first place (because all the money is being plowed into the mega-star).

 

Instead, I would run it more like a book publishing company. Work on developing a roster of profitable small- to medium sized acts. Rather than treating an artist like a condo developer (build and flip right away), you treat them like a real long-term asset that you can develop over time.

 

A big cash machine for labels is backcatalog - because it's almost all profit (marketing/promo is geared towards the latest release). It's harder to have a back catalog if you take a short-term approach to an artist with a "go big or go home" on their first album. By distributing dollars more evenly over your roster and letting them develop profitably (albeit on a much smaller scale), you have a far better chance that these artists generate reliable back catalogue sales - because they were able to develop a fan base overtime.

 

I would also try to spin off the label and take it private. Right now, most major labels are part of giant entertainment conglomerates, many of which are publicly traded. This means that investors keep such a close eye on quarterly numbers -- and that trickles down to the record labels. Quarterly numbers dictate your performance as a label exec, which feeds that short-termist approach to "go big or go home this quarter". In this kind of situation, execs have no incentive to see the long-term (even if being "patient" and developing your roster over the long-term may actually be more profitable in the end). So everything is about boosting this quarter's numbers. I would try to find private investors to basically buy the record label from the conglomerate/parent company, and run it as a private company. That allows the company to be run away from the short-termist mentality of Wall Street and the microscope that all publicly traded companies are under.

 

I would also focus on transitioning the company towards digital sales as THE primary revenue and avenue for selling and reaching music fans. The royalty rates and numbers I won't get into now. In any case, we'd have to figure out a way somehow. It's the only way because that's what music fans are wanting.

 

I would also cut the price of CDs. $10 or less. Given that it's more about playlists than albums and the fact that DVDs are priced at or near the same points as CDs (and some may say you can't compare a film to an album, but to the average person looking for "entertainment" they do make that comparison whether you like it or not), there's no choice. CDs these days, particularly those not in the top 40, are too expensive. This is just a transitionary stage anyhow, since CDs are going to be a dead format in maybe 10 years or so. In the meantime, you want to make sure that they are cheap enough that it gives buyers an alternative to online. If someone has the choice to pay $17.99 for a CD vs. $10 on iTunes or buy simply downloading it with BitTorrent, you can guess what a lot of average consumers will do. And again, since it's a major label, we are trying to go after the average consumer as well as the hardcore musician and hipster.

 

As for promoting our artist roster or simply finding new talent, I would find a way to produce or co-produce an "American Idol" sort of show (bear with me here) that is less about finding singers, and more in the vein of a battle of the bands (i.e. not just singers, but musicians/songwriters). Maybe produce different shows for different age groups or demographics, or even different regions (since Euros, Asians, Latinos, and Americans have different tastes). Like it or not, while the spectacle of reality TV isn't as big as it was at its peak a few years ago, but the format is here to stay. And it's a way to market the artists on my roster, since Satan (I mean, Clear Channel) costs more in payola than what it would cost me to produce my own reality TV shows and partner it up with one of the cable networks.

 

There's other ideas I'll add along the way, but here's a start.

[Billster]

Essentially, I would reduce and re-focus marketing, and put the savings into research & development.

 

Instead of focusing the marketing on the "star performers" of the label, I would make the label a destination for people seeking a certain quality. Think of the old Blue Note, when you could count on "The Blue Note Sound" no matter who the headline artist was. Many of the classic jazz records from that era feature the same performers, but with different artists designated as the leader on the recording session - depending on who wrote the tunes.

 

Same with Chess in the blues market, or the Stax/Volt soul sound.

 

Some of the mid-size labels do this successfully. Telarc has a wonderful and varied roster, Nonesuch too. Gramavision was a destination label in the 1980's for a particular style, as was GRP.

 

Compare the auto companies. Honda and Toyota each offer varied styles of cars (economy, family, truck, luxury) but their reputation is built on "Honda reliability" or "Toyota dependability" - NOT on any particularly flashy model. Ford and GM, on the other hand market individual models with lots of emphasis on styling, catchy features like how many cup holders and DVD players, stirred in with a lot of flag waving. But no one thinks of Ford and GM as particularly dependable no matter what style of vehicle you are buying.

[I was The Funk]

1. Eliminate singles.

 

Downloading is fine, but you have to download the whole album.

 

"but what about those {censored}ty albums with only a few hits and a bunch of filler"? you ask.

 

2. If an artist is not capable of putting 10 GOOD songs on an album, they are not worth giving a record contract to. I don't care what they look like. You either walk the walk or you don't. If you can't write good songs, you have no business being a songwriter.

[Big Boss Man]

How about abandoning the album concept and releasing all songs individually?

 

Smaller acts and a greater variety of music could potentially be supported. The record label would only need to produce and promote a single song. If it does not work, they could quickly cut their losses and move on to someone else. There is nothing wrong with being a one hit wonder. The problem is when the record label has to spend a lot of money producing filler material to surround that one hit because they tied themselves to the album format.

 

Larger acts could also benefit. Instead of releasing something new every two years, they could have a steady flow of new material coming on to the market. That would help to keep these acts more current.

 

The record labels could also use a better release strategy. Don

[RickTaylor]

 

It's the only way because that's what music fans are wanting.

 

 

Something you keep saying... do you have any statistics?

[Shakabrah]

Dick Dale's interesting take:

 

http://www.youtube.com/watch?v=yJNnLIPZ_n4

 

Kinda says it all......

[EngineGuitarist]

im guessing this will be as popular as my other thoughts round here so hear it goes.

 

my solution.....stop recording.

 

yes i said it. stop recording. you're ruining the music industry.

 

 

think about it....

 

people swap music illegally because they feel it doesn have "value" and they shouldnt have to pay for it, coupled with years and years of over paying for CD's that had 1 good song it.

 

If you buy ten cd's a year and you only like 1 or 2 songs on them how many concerts do you think you'd attend?

 

None.

 

that causes/caused clubs to close. sure MSG aint going anywhere, but neither are the people who play there. except maybe that disney {censored}, but they'll make something else up.

 

so now we have people who have spent roughly $150 a year on CD's to get 10 songs they like AND they dont go to shows.

 

Itunes comes along. yay, a way to make SOME money on online sales. but the quality isnt so great. but they're only a buck so who cares. now i can listen and sing along to ______ in the shower cuz i sure wasnt going to spend 15$ on it.

 

fast forward a few years and here we are. Itunes sells billions of songs a year and CD sales go down more than your ex girlfriend. clubs keep closing left and right. Real Estate is making so much money that huge legendary places are closing because the business is {censored}ed and its easier to take millions of dollars and go play than to stay and possibly bankrupt your family business. The labels signing artists AREN"T signing artists in the traditional sense, well very few. Less and less each year and many of the ones they do sign are for a few songs to see how it does.

 

But dont worry, its still very possible they'd shelve it anyway.

 

No one has money to spend on recording because they're all afraid of the marketing budget and whether they can make their money back by the end of the quarter. There is no such thing today as signing an artist with longevity, other than it happening by pure luck. The people in the past who had support from their label to increase popularity over time are all OLD. there is no more, "well the second record did do better than the first, lets give them another shot". If the first wasnt huge there wouldnt even be a second. U2 & bruce springsteen (for example) would not be around past album 1 these days because their first albums didnt explode.

 

if you've lost me in my rambling let me summarize.

 

People like music. They just need to be reminded of it. The best way to make people want something is to not let them have it. Especially if its something they used to have. And while some may say thats childish, look at the ages of the key demographic for record sales. If these artists stopped recording and just toured I think it would recreate the industry. Clubs would be sustainable. people would pay to see live shows or just not hear music. a good local band would have a following at shows instead of 20,000 myspace friends from around the world listening to your stuff for free and not buying it. because really, why pay for something you already have? and they cant go to your shows because you only play in ohio and they're all over the world.

 

Radio would be forced to admit what we already know, they only play the same 12 songs from 40 years ago anyway! (ok so thats a stretch but u know what i mean). Perhaps it could revitalize radio by broadcasting pieces of local shows! or having in house performance! or perhaps it would go away and i could stop hearing about the {censored}in foot long hot dog inventor and president's day sales.

 

Plus this would force all the labels, distibutibutors, and marketing people to do something with their lives aside from hiring the lord-alge's to mix a record "with no budget" for 4k a song and a point. hopefully it will make them think and try something new for the industry.

 

Music is a social thing, lets get back to it.

[EngineGuitarist]

 

Major labels today are run like film studios - so much money tied up in a few appointed "franchises". I'm willing to bet that they spend more than 90% of their marketing/promo efforts and dollars on less than 10% of their artist roster, hoping for the same kind of "hit". In other words, for every 10 acts they sign, they're only hoping for 1 mega-star to pay for the 9 unprofitable acts they never gave a chance to develop in the first place (because all the money is being plowed into the mega-star).

 

 

Pretty much. except with a ten act scenario- 1 is huge, 3 are struggling with little support, 1 was dropped before they even recorded cause their AR guy was fired, 2 need more focus groups done to find the single since no one at the label listens to music, 1 has been shelved indefinitely forcing the band to tour with nothing but shirts for sale, 1 is a vanity project that sucks but someone in it WAS in a band that made money many decades ago (or a tv show), and 1 is a copy of whatever is hot this week.

 

the thing is, while the mega star does get more dough (and rightfully so) they also make ALL the money to cover the expenses of ALL the {censored} i listed above.

 

its been this way for a while unfortunately.

[starsnuffer]

The record industry is a dinosaur in dire need of extinction.

 

Have you visited the internet lately, or even just the cesspool of humanity called myspace?

 

Everything that one needs to create, record, promote, market, and distribute music exits and is available to everyone without the need of a label. The tools are relatively cheap, and the quality need not be top notch since most people listen to music on earbuds and in their cars.

 

The only thing keeping the dinosaur alive is a bunch of people who have made craptons of money trying to figure out how they can continue to milk artists and continue to make a crapton of money. It's a self-infecting wound.

 

Unfortunatly, artists are not known for their brainpower or social savvy. This has led to a lot of gouging and parasitic behavior in the marketplace. Fledging artists have to put out a lot more money then they take in for quite some time in order to do what they need to do to obtain a fanbase. This is why labels have essentially become nothing but high-interest banks and credit cards.

 

So, why not just scrap the labels completly and just start some programs to lend money to artists through normal means? Treat it for what it is, a business, and stop coddling braindead "artists" and stop lining the pockets of the industry executives who obviously have no taste nor talent.

 

-W

[Greenshoe]

 

Pretty much. except with a ten act scenario- 1 is huge, 3 are struggling with little support, 1 was dropped before they even recorded cause their AR guy was fired, 2 need more focus groups done to find the single since no one at the label listens to music, 1 has been shelved indefinitely forcing the band to tour with nothing but shirts for sale, 1 is a vanity project that sucks but someone in it WAS in a band that made money many decades ago (or a tv show), and 1 is a copy of whatever is hot this week. the thing is, while the mega star does get more dough (and rightfully so) they also make ALL the money to cover the expenses of ALL the {censored} i listed above. its been this way for a while unfortunately.

 

 

Agreed.

 

And there's this weird circularity as well.

 

The mega-star sells the most units because they get the most marketing support. But they get the most marketing support because they sell the most units. So labels continue to plow increasing dollars into fewer and fewer artists, which only makes it worse for the other artists on the roster who get zilch.

[Billster]

Agreed. And there's this weird circularity as well. The mega-star sells the most units because they get the most marketing support. But they get the most marketing support because they sell the most units. So labels continue to plow increasing dollars into fewer and fewer artists, which only makes it worse for the other artists on the roster who get zilch.

 

Read my post?

[Greenshoe]

 

The record industry is a dinosaur in dire need of extinction. Have you visited the internet lately, or even just the cesspool of humanity called myspace? Everything that one needs to create, record, promote, market, and distribute music exits and is available to everyone without the need of a label. The tools are relatively cheap, and the quality need not be top notch since most people listen to music on earbuds and in their cars. The only thing keeping the dinosaur alive is a bunch of people who have made craptons of money trying to figure out how they can continue to milk artists and continue to make a crapton of money. It's a self-infecting wound. Unfortunatly, artists are not known for their brainpower or social savvy. This has led to a lot of gouging and parasitic behavior in the marketplace. Fledging artists have to put out a lot more money then they take in for quite some time in order to do what they need to do to obtain a fanbase. This is why labels have essentially become nothing but high-interest banks and credit cards. So, why not just scrap the labels completly and just start some programs to lend money to artists through normal means? Treat it for what it is, a business, and stop coddling braindead "artists" and stop lining the pockets of the industry executives who obviously have no taste nor talent. -W

 

 

There's way too much out there right now -- both good and bad. It's a cesspool as you said that is impossible to wade through. There's simply too much music, period -- and the traditional gatekeepers (the labels) aren't doing a good job separating the great from the dreck.

 

There's a lot of great music out there - mostly by indie artists (of any genre) or by smaller signed artists. But how do you discover that music? Most people don't have time to spend 8+ hours a day on Myspace or hanging out at Amoeba's or whatever record store that's still in business listening to release after release... even for obsessive music fans, gatekeepers are important that help save you time, while pointing you to artists you never would've discovered otherwise.

 

For indie labels, as someone mentioned before, branding is very important. It tells a listener what to expect -- that the label will sign and promote a certain kind of music that will cater to a certain audience.

 

The media outlets have a part to play as well. As much I think some of Pitchforkmedia's reviews are a masturbatory wankfest of verbal diahrrea written by some frustrated English major, it's one of the few outlets where their taste in music is relatively consistent with what I like. It's a gatekeeper so to speak. In the old days, these were indie magazines that you'd order through the mail.

[Greenshoe]

 

Essentially, I would reduce and re-focus marketing, and put the savings into research & development. Instead of focusing the marketing on the "star performers" of the label, I would make the label a destination for people seeking a certain quality. Think of the old Blue Note, when you could count on "The Blue Note Sound" no matter who the headline artist was. Many of the classic jazz records from that era feature the same performers, but with different artists designated as the leader on the recording session - depending on who wrote the tunes. Same with Chess in the blues market, or the Stax/Volt soul sound. Some of the mid-size labels do this successfully. Telarc has a wonderful and varied roster, Nonesuch too. Gramavision was a destination label in the 1980's for a particular style, as was GRP. Compare the auto companies. Honda and Toyota each offer varied styles of cars (economy, family, truck, luxury) but their reputation is built on "Honda reliability" or "Toyota dependability" - NOT on any particularly flashy model. Ford and GM, on the other hand market individual models with lots of emphasis on styling, catchy features like how many cup holders and DVD players, stirred in with a lot of flag waving. But no one thinks of Ford and GM as particularly dependable no matter what style of vehicle you are buying.

 

 

I agree, although it's easier for an indie or even a mid-sized label to brand itself successfully - becuase they're catering to a narrower audience. They have a smaller roster, and likely focus on certain genres (or even just one genre). It's hard for say brand BMG or Universal - not saying that they shouldn't brand, just that it's far harder to do, especially overnight.

 

And yes, I totally agree that they should focus on minimizing the star system. It's part of what's killing them.

[Greenshoe]

 

Something you keep saying... do you have any statistics?

 

 

I'm not going to spend time quoting specific stats (but be my guest to hunt for them).

 

You don't need stats to figure out that:

 

(1) iPod sales (and other digital music players) have skyrocketed in the last few years as CDs have plummeted -- I don't have the numbers on the tip of my tongue, but google these figures for yourself. And what are these consumers filling their iPods with? Not Tony Robbins motivational speeches. They are transferring their preexisting CDs and downloading (both legally and illegally).

 

(2) CD sales have plummeted over the last 5 years, but interest in music hasn't waned - otherwise why buy an iPod and keep it empty? People still listen to lots of music. It's their attitude towards music and appreciation for it that's changed.

 

(3) A good week for a mega-artist nowadays is selling 50,000 units in their first week. 10 years ago, that would've barely cracked the top 50. Again, does that mean people are listening to less music? Again, evidence: iPod, downloading, etc.

 

I don't know what stats you want buddy.

[Greenshoe]

 

Dick Dale's interesting take: http://www.youtube.com/watch?v=yJNnLIPZ_n4 Kinda says it all......

 

 

Yes!

 

I don't know if that will be the new model for everyone, but it's certainly something to strive for.

 

The problem is, for every Ani DiFranco, Fugazi or Dave Matthews (pre major label), there are 100 bands out there that lack business savvy to be able to run their own "business" so to speak.

 

But that goes to show that whether you sign to a major label or go out on your own, talent alone won't always rise to the top... you need to know how to take care of your bidness. Or else no one is gonna hear your talent.

[EngineGuitarist]

 

either you know what you're doing or you don't. instead of the same people who ran it into the ground searching for new ideas, maybe there should just be new people.

 

 

id just like to add "without MBA's" to that.

[starsnuffer]

 

There's way too much out there right now -- both good and bad. It's a cesspool as you said that is impossible to wade through. There's simply too much music, period -- and the traditional gatekeepers (the labels) aren't doing a good job separating the great from the dreck. There's a lot of great music out there - mostly by indie artists (of any genre) or by smaller signed artists. But how do you discover that music? Most people don't have time to spend 8+ hours a day on Myspace or hanging out at Amoeba's or whatever record store that's still in business listening to release after release... even for obsessive music fans, gatekeepers are important that help save you time, while pointing you to artists you never would've discovered otherwise. For indie labels, as someone mentioned before, branding is very important. It tells a listener what to expect -- that the label will sign and promote a certain kind of music that will cater to a certain audience. The media outlets have a part to play as well. As much I think some of Pitchforkmedia's reviews are a masturbatory wankfest of verbal diahrrea written by some frustrated English major, it's one of the few outlets where their taste in music is relatively consistent with what I like. It's a gatekeeper so to speak. In the old days, these were indie magazines that you'd order through the mail.

 

 

All labels do is tell people what to buy. Why? Have we all devolved to the point where we are just sheeple who need to be told what we like?

 

-W

[RickTaylor]

 

I'm not going to spend time quoting specific stats (but be my guest to hunt for them).

 

 

Somehow it's become my responsibility to back up your argument?

[Greenshoe]

 

Somehow it's become my responsibility to back up your argument?

 

 

No, you're just not worth my time. Nor is it worth it to me to convince you.

 

Sometimes I really think you're semi-literate, like we're on completely different wavelengths or something. I really have no idea what you're trying to argue or even what your point of view is other than trying to be snarky. How old are you?

 

I'll let my posts speak for themselves. I'm done having this tit-for-tat with you.

[RickTaylor]

 

I'll let my posts speak for themselves. I'm done having this tit-for-tat with you.

 

 

OK

[Wireline]

BTT: In my rose colored glasses opinion, the reasons the industry as a whole seems to be suffering are multiple, with these being the biggest issues that seem to come up in discussions with some respected voices:

 

- Everything sounds exactly the same...songs, productions, artists, are all starting to sound just like the last one...no new sounding artists/productions

 

- Volume wars...see the million threads on it, and then explain why we on the back end seem to unanimously despise a release with 6 db of total dynamic range, they are still being released and sold daily.

 

- A certain generation/cultural gap exists...more and more people seem anxious to slam (unfairly) the pioneers of the business and the icons of the biz...The poeple I think are THE ones we all should be listening to do not participate on the net, for fear of tire biters, constant challenges, people wanting to run their ground breaking work into the the mud, etc...

 

- Expecting plug ins to replace skills...another well discussed notion, but one that remains an issue...

 

Just my opinion...first we gotta find artists willing to take a few risks, then be willing ourselves to take risks...

[Will Chen]

I think I know a short term solution. I'm sure many will think it a gimmick, but I call it a business idea.

 

The big guys need to stop selling music individually and focus on selling the idea of music. Well, what does this mean? It means focus on selling the realities of their acts, their lives, their essence. Rather than selling the hit single, they need to sell the experience of creating the hit single. So how do you come up with a business model to support this concept?

 

You have a monthly television show featuring the artists of said label performing new songs which have not been "released" yet. Each month the artists perform new songs which have not been released. Assuming their artist roster has "the stuff" and the show is properly produced and promoted, the advertising revenue will offset the cost of the show and most likely turn a decent profit.

 

On the show, you advertise the labels "reality" website which features short films of the artists moving through the creative process of writing, rehearsing, and recording the tunes. You offer streaming live concerts with multiple cameras that the user can control to see different angles. You offer contests to remix songs or write lyrics for the artist

[Greenshoe]

 

I think I know a short term solution. I'm sure many will think it a gimmick, but I call it a business idea.   The big guys need to stop selling music individually and focus on selling the idea of music. Well, what does this mean? It means focus on selling the realities of their acts, their lives, their essence. Rather than selling the hit single, they need to sell the experience of creating the hit single. So how do you come up with a business model to support this concept?   You have a monthly television show featuring the artists of said label performing new songs which have not been "released" yet. Each month the artists perform new songs which have not been released. Assuming their artist roster has "the stuff" and the show is properly produced and promoted, the advertising revenue will offset the cost of the show and most likely turn a decent profit.   On the show, you advertise the labels "reality" website which features short films of the artists moving through the creative process of writing, rehearsing, and recording the tunes. You offer streaming live concerts with multiple cameras that the user can control to see different angles. You offer contests to remix songs or write lyrics for the artist