May 25 2008
As you know, the music industry is on life support and is all because of downloading. Nothing else. It is not becuase they are out of touch. It is not their willingness to change their business model like other industries. It is not because they have been pushing so much crap either. It is 100% illegal downloads. Yeah right. If you believe that, then you must believe in the Tooth Fairy.
Well someone is trying to come to their rescue. Two research groups out of the UK, The Music Ally and Leading Question developed a study and presented 5 ways the music industry can be saved (I doubt the industry would do any of it). Here are the five points(via Wired)
1. Music needs to be bundled with other products and entertainment packages: Value can be created from many other ways than consumers simply buying the occasional download. Music needs to move away from per unit sales and become more of a service than a product. It should be pre-loaded into devices, bundled with mobile tariffs, offered as part of TV/Entertainment/ISP packages.
2. Labels needs to experiment with new release schedules and formats: The old model of single and album releases has run its course. Labels needs to be more innovative if they are not to be freezed out altogether. Look at the likes of Radiohead, Nine Inch Nails and Prince and experiment with new and varied formats, new pricing models and release schedules, digital only releases and promotional partnerships with brands.
3. Free doesn't mean no money: The music industry should not fear free. It needs to embrace it. The culture of the net is free or at least feeling free. But money can still be made from other sources: everything from advertising supported services, to brands paying for an association with the artists to newspapers paying for giveaway CDs.
4. Change the charts: The Charts don’t make much sense anymore. Now that fewer and fewer people are buying music the charts need to reflect the other ways that people are consuming music.
5. Trust the DJ: Online means anyone can access or own John Peel’s entire record collection, but the instant and massive availability of music on demand means you need a trusted guide like John Peel more than ever. The new layers of value will come from the social connections that come about through music as much as from the music itself.
The ironic thing about these 5 points is that someone is following them; however, it is not the music industry. It is companies like Nike, Red Bull, Scion, Southern Comfort, Obey Clothing, Rockstar Games, and other non-music companies. For example, Nike has a site dedicated to the women demographic called Nikewomen.com. When you go to the site, the first thing you hear is music from the countries best independent artists plus free downloads that are perfect for your workout. Artists such as Santogold (which is the first artist you hear when you enter the site), Styrofoam, Tokyo Police Club and others. All of the songs on the site are free downloads. Nike is pushing unknown artists with their products. If you are one of the artists, you are definitely benefiting from the marketing power of the multi-billion dollar company. No record label can compete with that. Then combine it with Nike + which is the product that combines Nike shoes with the iPod, you will have a win win situation for Apple and Nike. As you can see Nike uses points #1, and #3.
Next company to use some of the five points is the car company Scion. Yes a car company is doing better than the music industry. Besides promoting and putting on events, they have release music on their own label, and have an online radio station, run by some of the countries most influential DJs, and tastemakers not a computer on shuffle. Scion recently released Scion Broadband. A site dedicated to new music. You would think a company would just rely on what is hot on the Billboard charts. They would save money and time, but they didn't. They relied on artist like Hot Chip, Garth Trinidad from the radio show Chocolate City, Devlin and Darko of Spank Rock, DJ Food from Ninja Tune records, the DJs of the Rub, and other DJs and tastemakers to create their online radio station. Scion radio get more hits on the web then some of the most popular radio stations in the country. They even put out music and DJ mixes as well. Guess how much they charge for the releases they put out. $5, $10, $15. Free. Yep their releases are free. Not only the music is free, some of the shows they put on are free like the free Too Short show they put on in Minneapolis recently. Scion follows all the 5 points that could save the music industry discussed earlier.
Southern Comfort is another company jumping into the music game. Yes the whiskey company (damn good whiskey). They have been putting on a free music festival every summer featuring some of the country hottest artists. This year their festival will feature artist such as Gnarls Barkley, The Black Keys, GZA from the Wu Tang Clan, and others. The festival is called the SoCo Music Experience. While the festival is free, this leave the consumer to buy more stuff like artist merchandise including those CD things and of course drinks inspired by Southern Comfort. This year they have even incorporated more DJs to the shows.
The next company is a video game company by the name of Rockstar Games. They are best known for little video game series called Grand Theft Auto. Their latest game, "Grand Theft Auto IV" has broken all entertainment sales including CDs, and DVDs. They have sold over six millions copies(close to a half a billion dollars) in the first week alone. Name a record that has done that(plus the games costs 4 times more than a cd). Now Rockstar has a captive audience to promote anything including music. For example, while you are playing the game, there is a radio with over 19 stations with hours of diverse, non-charting music. Just like movies, their is a soundtrack for the game that you can buy. What is so special about the soundtrack? You hear the music throughout the game play. With over six million copies sold in the first week alone, you have a captive audience that will be hearing that music over and over. As part of a partnership between Rockstar Games and Amazon.com, most of the music heard on the in-game radio stations is available for download through the Amazon MP3 digital music store (Wikipedia). If you don't have the game or a console to play it on, you can still listen to all the stations and their music here. They even allow you to embed a station on your blog or website. That is how you market music.
Here is the playlist:
Other companies like Red Bull are getting into the record business by starting a record label.
Red Bull, the energy drink, wants to follow Starbucks' lead and get into the branded record label business, The Post has learned.
According to several sources close to the situation, Red Bull's music endeavors, which include sinking millions of dollars into a recently constructed recording studio in Santa Monica, Calif., are all part of the company's plans to launch a branded record label by year's end.
Red Bull has even been involved in the A&R business by running the Red Bull Music Academy for the past few years. The Academy is for aspiring DJs, Producers, and other aritsts to learn and collaborate in a different city each year.
As you can see the music industry is salvageable, only if it wants to be. But the future is clear, non-music corporations and music blogs are the future record labels.