Seth On The Music Business
Seth Godin listed 14 rules to live by in the music business on his blog yesterday. It’s a topic you all have heard me rant on endlessly for years. I am passionate about this issue because I love music and hate to see how messed up the business of music is. Taken together, Seth’s 14 rules are are great recipe for how to fix the music business.
Seth has some good comments but there is one dooesy of a mistake.There is no way for record labels to make money with concerts and souvenirs. Concerts are low margin, except for the very largest artists. There is just not that much money in T-shirts.The fallacy of Seth’s analysis is that sometimes you just *can’t* save an industry. There are dynamics that are making the sale of music something that is just going to go away. It relates to something I intend to blog about in the next few days, which is the idea that the value of IP (software, music, movies, etc) is asymtotically approaching zero.We may be able to find other ways to monetize it (or maybe not) but I think Seth’s thesis that, in effect, the record industry could have saved itself by switching models is inaccurate. Some things cant be saved because there are too many moving parts which one entity or even class of entities doesnt have control over, that would all have to “agree”. That includes publishers, artists, advertisers (with an ad model) consumer electronics companies, etc. It also would require *massive* firings and restructuring as, during this rebuilding period, 80% of the employees were fired. Few entire industries are “smart” enough to do this to “save themselves”Sometimes failure is the only option.
As a lover of music I don’t care a hoot about the music companies. They had a great ride and now its over. Welcome to creative destruction. I do care that musicians get to make a reasonable living. What I got from the David Byrne article in Wired (looking at it from the artist’s POV) is that they do just fine with a much bigger share of a smaller pie. The new world is a threat to megastars and the firms that promote them and it maybe harder to make mega millions as a musician, but I think it enables a lot more musicians to make a reasonable living doing what they love. I think that the key will be making the whole live experience more fun and compelling and moving that experience beyond the physical boundaries of the event location.
“8. Don’t panic when the new business model isn’t as ‘clean’ as the old oneIt’s not easy to give up the idea of manufacturing CDs with a 90% gross margin and switching to a blended model of concerts and souvenirs, of communities and greeting cards and special events and what feels like gimmicks. I know.Get over it…””Get yer, Tom Petty lunch box here! only $5.95” “Nothing says I love you more than a Butthole Surfers Valentines Day card from Hallmark” Fuck off.Me and countless millions LOVED going to record stores and still do. Buying (or stealing online) is a better experience? Bullshit. Buying music was part of the experience and you technocrats can’t face the simple fact that your bullshit “everything new and digital is better” has effectively trashed what was once a GREAT thing. I’m not talking about the labels and their business; I’m talking about us fans. I’ve been dirt poor during my life time and never ONCE complained about the price I paid for my music.The swill merchants (labels/corp radio) bear a large brunt of the blame, but the generation of entitled thieves and the machine that fostered it, those who treat music strictly as a consumable vs collectable, I blame them more. Thanks for ruining a great thing.Rock is dead! Long live rock!Fuck rock! Long rock!
Tony, you can have both worlds. There is nothing stopping a band from releasing a digital recording onto the Internet for free and also doing a limited edition vinyl recording in a fancy box signed by the band that is sold as a collectible. Consumable vs collectible are not incompatible, you just change what is being collected. I’d encourage every band to make the fancy box version and only sell it at their concerts.
Fred, I agree with most of your comments regarding the music business, thanks for sharing those thoughts (as always). Thanks also for sharing the link to Seth’s article. Most of his points are good (though not all, as some of your readers have already pointed out).I just stumbled onto an online label that really does get it right (IMHO). I just put up a long post about them (magnatune.com), in case you or any of your readers aren’t familiar with them, or what makes them very special.http://www.opticality.com/b…
Nice post Fred. Seth’s blog is always a great read.It’s amazing that all of those points are pretty obvious but most of the big companies still don’t get it. I’m sure you get it Fred, and you aren’t even in the music biz directly. Being able to look at the business from an outside perspective seems to be a requirement for really understanding the new world. Being inside of the machine and being accustomed to doing things certain ways seems to really slow progress down to a crawl now that things are changing.It’s not just the music biz that’s having these issues but all of the media companies as well. Everyone knows that the radio, newspaper, television and movie biz are about to hit quite a bit of turbulence as well. That post about your kids was telling and very true.Oh well, that leaves more opportunity for those of us that do get it. Especially in the music related businesses. (Hello Jackson, I know you are lurking)There’s a ton of money out there for companies that can really capitalize on the attention that music brings. It creates communities quick and easy in a time where the community is everything… especially online. And let’s not forget the intense “call to action” that a great song can spark. No matter if it’s a signup, a sale, a registration or whatever, a good song presented properly can make it happen fast. All of this is because music touches people on a level that nothing else can.If that emotional connection to the music and the scenes that are created around it isn’t highly monetizeable then I don’t know what is.
I got a box of unsold Tedstock t-shirts……….
Send me someI love those t-shirts
The Seth Godin post was addressed to technocrats and marketers. The much more interesting article was by David Byrne (a wonderful musician IMO) in Wired when he looks at from the artist’s POV. That shows the real, pragmatic options and strategies for artists. (No, it is not just dumb tchachka tee shirts and lunch boxes which are insults to artists and fans). Its a mix of digital, CD (self-produced) and live. Byrne parses the numbers to show what you got/did not get from the record companie and what you do in a world without traditional record companies. Any artist longing for the good old days is as dumb as RIAA suing their customers. Godin post is good at “accept reality” but the Byrne one is much better on what to really do about it.Here is the article:http://www.wired.com/entert…
Totally agreeIts a great articleI reblogged it at fredwilson.vc last monthFred
Flyleaf Album = $8.00 on iTunes for 12 songs, 5 extra acoustic versions, and 7 music videos – that and Radiohead is how to start getting people to invest in the music industry again
also…I bought the free Radiohead album for $8.00 and I’m the 18-25yr. target demo (Thom Yorke was interviewed by Byrne on the pages right before his big article)