Death Of The Major Labels Article Sparks Debate
Our recent reporting of of former SFX/Clear Channel/LiveNation founder Bob Sillerman’s comments to a Billboard conference on the impending death of big record labels has lead to some spirited and 
well written comments most notably by Glenn from Coolfer who wrote:
Sorry, but he’s wrong. Very wrong. What sells the most records? TV and radio.
People will gravitate to what is popular, and they’ll continue to use TV and radio to discover new music. Yes, the Internet is going to be the key marketing channel in the next decade, but who’s to say the majors won’t dominate Internet marketing just as they’ve done with TV and radio.
Then Squashed of Another Record countered:
The big record companies (are) milking the last wave of audiences. that’s about it.
The new generation of audience doesn’t even take MTV seriously anymore. The most cutting edge music (ie. the next stars that make music scenes 5-8 years from now) are not on MTV or clearchannel radios. Yeah yeah yeahs, clap your hands, gogol bordello, etc are all local, indie labels, festivals, internet driven. …
Music scene is still about good music. And the good musics are not on Radio and TV anymore…
We stand somewhere in the middle. Major labels will still survive to milk catalogs and create some of the next wave of mass market mega-stars. But a lot more artists than ever before will take different paths and find longer, more creative and satisfying and reasonably profitable mid-level careers due to the power provided by new technologies to help them create, distribute, and market their art.
Read the article and full comments here and tell us what you think.
The death of majors won’t be because of what they spend their marketing on. I agree they will adapt. Each week the New Media depts get more and more clout in the ivory towers.
What will kill the majors is the overhead. Sony’s billion dollar buildings on high priced midtown real estate. Bloated salaries for execs who are more interested in the short term power grab or paycheck instead of the survival of their business.
I don’t see what the debate is about. The bands given in the counterpoint do not represent the future of recorded music sales. Yeah Yeah Yeahs have a gold record. That’s it. Clap Your Hands are at about 85k scans. Gogol Bordello’s album sales are inconsequential, though they bring people in to their live shows.
Sales like that don’t represent a huge shift in power.
The thing about Clap Your Hands is that people have read too many stories about how they represent the future of how music will be discovered. That’s only one example. One success story for grassroots Internet buzz. If this is truly the beginning of the end of majors, why isn’t there more than one example?
Prince is back with major labels. Pearl Jam, a band that very well could have formed its own label and gone DIY, signed up with J Records. What does that tell you? It tells me that major labels are far from dead. Prince and Pearl Jam are very financially astute. I doubt they’d get on board a sinking ship.
And when I talk about TV, I don’t mean just MTV. Take “American Idol.” Kelly Clarkson just passed five million scans…and not for an indie label.
The shape of a major label will be quite different in ten years, I have no doubt. There will be more artist management. They may resemble marketing firms in some ways (artists will be making music for McDonalds, appearing in advertisements, doing product placement). I can’t even begin to imagine what digital revenue streams will exist.
So I don’t know exactly what a future major will look like. All I know is they will exist. Indies are in a better position now than ever before. With the cost of doing business greatly reduced, with the ways the Internet makes reaching consumers so cost effective, with the cost of recording an album dropping, indies will be able to do great things in the coming years. I’ll be the first to say it. But I’ll also be the first to say they’re not going to replace the majors.
Posted by: Glenn | Thursday, March 30, 2006 at 07:45 AM
hey glenn.
true. If we are talking about today, 3 months from now. I can buy that, but not 2,5,8 years from now. I really think the majors don’t know what hit them (Sony being prime example)
Look at the trend, what bands the major are signing, how long they last, and how big the divergence between what people are talking/listening/exchanging online vs. what TV/Radio are pushing. Why smaller company like secretly canadian are doing great while Sony/BMG is going nowhere quick.
something is out of whack.
The TV and Radio doesn’t introduce new ‘sound’ anymore, they try to come up with ‘shiny super star’ and ends up with formulaic act.
I can’t blame them really, Can Television introduce IDM? How did Bjork last album do? compare to her previous? FM/TV sound quality and audiance sophistication are not up to new music.
The majors are stuck with U2/Bruce Springsteen type of sound. It’s that ‘Rolling Stones’ magazine sound.
I suppose at the end, all we can do is online experiments. (post tracks, and observe who is downloading them)
what we have right now is a great transition. People’s music habit is changing, and we don’t know quit what yet.
more concrete examples.
1. insound.com. They were insignificant indie stores 2 years ago. now they are a small but respectable outfit. (how do they sell albums and how does their chart reflects vs. webjay, hypemachine list, tecnorati top 20 blogs?)
2. Remember when amazon was the butt joke of music retail in the early 90’s? How did their chart reflect online audiance? (very close, and they were hot. And now they are the biggest of them all)
3. There is always odd, one two cases. but if we start seeing several very similar cases one after another. Similar sound, out of similar scene, flavor of people, same group of people generating buzz … then something is up. (in this case, Brooklyn + weblog + insound) Now granted, I may be experiancing tunnel vision.
4. Ipod, Itune, sale numbers, very large scale statistic. There is a consistent trend, not just random blip.
My favorite metaphor:
The big labels are like The dinosours who laughs at small furry creatures called mammal as the great ice age approaches. Why should the giants worry, they’ve been around much longer, can stomp the little furry creatures, has bigger meaner teeth and can run faster.
guess who won the evolution game?
Music is information now, not a category of entertainment. The most efficient information outfit wins the game. And the majors are not the most efficient.
but this is he said/she said type of situation. I think we need more data and concrete experiments to prove each of our point.