The State of the Biz

I'm nearly convinced that music as we know it is dead.

I should clarify.

I'm nearly convinced that the music industry (at least as we've known it for 50 years) is dead.

There are two reasons why I believe this. If you have another idea, please, let me know.

Number 1. There are too many artists trying to make money from the same pool of people. Every artist or band shares fans with another artist or band. Both of you are trying to get money and support and loyalty from the same people. The market has become over-saturated. I can't tell you of all the bands people tell me I need to listen to. Bands that are going to change my life. Well, I just don't have the time. Don't get me wrong. I'm a music lover. I have enough music to press play, and it won't stop for weeks. Gigabytes and gigabytes of music. Literally, Thousands and thousands of songs. I've got entire albums I've never listened to.

As of 2008, old info, there were over 8 million Myspace Band pages. 8 million...2 years ago.

And there's more music every Tuesday.

Number 2.

In June of 1999, Shawn Fanning developed an online service devoted to "sharing" music. It's legality was questionable. It was revolutionary. It was popular. But most important of all...

It was free.

In 2000, Metallica discovered that their entire catalogue of music was available for free download. They sued. Dr. Dre, discovering the same thing, also sued. And those two artists brought to the court the names of their own fans. In 2001, Napster went offline. In 2002, it declared backruptcy.

But by then, it was way too late.

Music had become available to anyone savvy enough to look for it and understand how to download it.

Lawsuits became the norm for Record Companies who were not really trying to win back lost revenue (what 16 year old could pay thousands of dollars in fines?) as much as they were trying to scare the population straight. It kinda/didn't work(ed). You see, fighting a war on downloading is futile. There is always a supply and there is always a demand. The market had changed. The product delivery was also going to change.

But, new websites sprung up. Music became extremely easy to download for a reasonable price. Apple's iTunes holds the corner on that market. But how long will it work? Just recently Apple raised the prices on many of the songs available. How high can Apple go?

This free music phenomenon also inspired the Artists themselves. As many as were against Napster and free downloading, there has been a strong voice encouraging the free distribution of music. Public Enemy's Chuck D supported the site, and Radiohead saw exponentially better album sales after their record Kid A was shared, fully 3 months, before it's official release.

Shawn Fanning also started SnowCap in 2002, and launched it in 2004. SnowCap was a legal online music store that was able to be coded onto existing websites, most notably, Myspace. I used SnowCap myself in 2006 to spread the music of my own indie band. The bands could upload their music onto the store and sell individual songs for a buck a piece. I remember when I first saw the service I thought it was revolutionary, user friendly, and a way to profitably spread your music. In retrospect, it's easy to see that there is no future idea for music distribution I predict as being game changing. The game changed 10 years ago.

In 2007, on the 10th of October, Radiohead released their album In Rainbows independently and for free. They set up an online system where the fan could choose exactly, if anything, he/she wanted to pay for the record. I wasn't really a Radiohead fan, but I certainly wasn't going to pass up being a part of this great music experiment. Naturally, I didn't pay a dime for In Rainbows (it was pretty good, certainly worth getting for free). While sales numbers were never released from the experiment, after all was said and done, Radiohead fared pretty well on the generosity of their die hard fans. Over 1 million downloads that first day. Imagine if only half the downloaders chose to pay for it. Imagine they only chose to pay 50 cents. With virtually no overhead, Radiohead would still make a ton of money. When the band released the album 3 months later officially in stores and whatnot, it charted number 1 in both the US and the UK. Their best sales since Kid A, which ironically was also available online 3 months prior to it's release. The difference was that with In Rainbows, Radiohead just went with the flow of the industry. No suing fans, no legal hoopla, just gave it away, and still made money.

Record labels are collapsing. Over the last few years, the number of job cuts has been incredible, but expected. In 2008, EMI, the biggest and the baddest, cut 2000 jobs worldwide. They are said to be planning more cuts this year.

While the labels fire themselves, the internet is thriving. In 2006, Derek Webb gave away his album Mockingbird in exchange for, not money, but information. For giving your name, email address and postal code he gave you his record. And he told you to tell all your friends to download it too. In the end he gave away over 80,000 copies of Mockingbird. But he certainly gained quite a bit. With his new information, he emailed fans about his shows. He knew your name, how to contact you, and where you lived. And the fans showed up. He began playing sold-out shows all over America. People started buying his records (including the one he gave away), they purchased shirts and other things. By all accounts it was a success. (He recently gave away his latest work, Stockholm Syndrome, in the same manner. I downloaded it for free and it's great.)

Based on that success, Webb started a new kind of website. Noisetrade.com became a place for bands and artists to give away their music in exchange for a little info and a little promotion. There are now hundreds of bands using the site. Many of them are my personal friends. Shoot, one of those bands is giving away a song that I played drums on. My own work is being given away.

And this is what I'm talking about.

People aren't going to pay for what is free.

I believe the only reasonable way to monetize music in the future is through a different kind of music product. The live show. Now it's also well known that live music has suffered. Ticket sales have slumped, true. But the live show is one of the few things you can't share online. Been to see a good band lately? You can't beat that experience. You can also monetize your music through the limited release of hard copies of the music. And get creative. If a 16 year old loves your band, they might also love the 20 page booklet you provide in the case of the 10,000 copies you release. Release on vinyl. It sounds better that way anyway. For something to have value, it must be rare. Creativity is the only thing that's going to work if the artist wants to continue his profession and pay his rent.

Anyway, just my thoughts today.