Top 10 Issues Facing Music 2.0
WHAT ISSUES NEED TO BE CONFRONTED?
Here, in no particular order, are what I believe to be the Top 10 issues shaping Music 2.0. How they develop will determine what the music industry looks in 5 or 10 years. Ignore them at you peril.
- THE DEATH OF THE ALBUM – Individual track downloads are killing the album market and the revenue that it once created. Can the album be saved? Should artists release in 1 to 3 track clusters?
- MUSIC TAXES – Is "taxing" music at the device and/or ISP level the answer? Or are these taxes unfair and further erode consumer trust?
- MUSIC AS A SERVICE – We used to call music "product". Did the pendulum swing to far in that direction? Or is music a service – subscriptions, "Comes With Music", optional ISP licensing?
- MOBILE – Will more and more music be bought an enjoyed via mobile devices? How does that effect the music?
- NEW REVENUE SOURCES – From YouTube to imeem and We7 to Nokia, revenue is being generated everywhere. Who will be sending big checks to labels in 5 years and how will that revenue be distributed?
- NO ONE BUSINESS MODEL – It used to be that record labels made money selling records and bands made money live. Is the future more varied: NIN, Radiohead, 360 deals, and partnerships with brands?
- 1000 TRUE FANS – Whether you need a thousand, 10,000 or even 100,000 true fans, how do you find, service and monetize a fan base?
- THE RISE OF THE MUSICAL MIDDLE CLASS – Do fractured media and short attention spans mean the superstar is dead? What new companies will rise to service and profit from a growing middle class of musicians with fewer fans but longer careers?
- THE DEMOCRATIZATION OF MUSIC DISCOVERY – Once DJ’s told us what to like. Now our friends do or we discover it ourselves and share the news. How does that change how music is marketed?
- THE POWER OF LIVE – Is performing more important than ever? You can’t copy it and it’s a great place to build community and sell stuff. Or is that a music 1.0 notion and Twitter the new barstool?
Is there a number 11?
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Great post! However, the 1000 true fans theory has been debunked as unrealistic for start up bands. Generally, it takes years of hard work for an artist to develop a significant following, relying on a combination of touring, talent and luck. Of course the occasional primo licensing deal does not hurt either!
11. Patronage. It takes years of hard work to develop a following as a band, touring and luck. So, what new bands really need are patrons a la Medici, or angel investors, who will finance the period of time it takes to build an audience.
Great points Nancy. I think the number of fans is very debatable but the need to gather, hold on to and monetize them is not. Would you agree? Others?
#8 can be re-stated as ‘working class’ because the new definition of success is shifting from making millions like Madonna to making enough to supplement one’s everyday needs to justify continuing to do what they love which is make music. Back to the future!
Bruce,
absolutely! musicians are going to need to develop ways to monetize their interactions with fans.
BUT what seems to be happening is the middlemen are reconfiguring to participate in revenue streams that could essentially be direct between the artists and the fans. For example, in the so-called 360 Deal, some labels are trying to participate in merchandising and touring which used to be money that went straight to the artists.
More disturbing is whether or not musicians will be able to really participate in the online revenue streams (ad sharing et al) unless they are aligned with either a major label, major indie label or some kind of collective agency that goes around collecting revenue from site to site.
What do you think?
Nancy
11: Bands who worry about all the above.
Rather than post a new comment I’ve put it all here: http://boredofdictators.wordpress.com/
All great points. In fact, I’m adding some of them to a new post on the subject.
Nancy, I do think that indie artists will need to struggle for awhile to get there fair share of new revenue streams; and I worry that the majors are grabbing so much of the pie that what is left will not be enough. Within a few years, however, I think that there will be new statutory rates and more “standard deals for all artists.
As things develop I would urge indie musicians and msmll labels to join Merlin, SoundExchange, AIM, A2IM and any organizations to make sure they have a place at the table. They should also encourage their digital aggregators – drom TuneCore to IODA – to keep them informed and fight for them.
There’s hope…
Bruce – great list.
If you consider the universe of music listening and consumption, “Music 2.0” is still very small. If you write pop music for ages 10-25, then you should be marketing via Music 2.0 strategies. Almost every other genre is still a human interaction.
Most of us “online” get caught in this world where it seems like everything happens here. We have to remember, there still is a digital divide. 90% of the adults (25+) I talk to, do not interact with artists/music online. They buy CD’s and listen in the car. Yes, it is shifting, but there are a lot of people out there with great taste and iPods who still can’t figure out how to get the music loaded.
Good comments Mike, but don’t you think that at least a lot of music discovery for the 25+ set is happening online? Look at RadioParadise and at work net radio numbers for example.
Please define “a lot” of discovery. I’m not sure where to look for aggregate online radio stats.
I can’t argue that online discovery is on the rise. As an independent artist myself, I can tell you that 90% of my listener interactions and transactions are face-to-face.
I do get a few hundred visitors per month to my myspace/facebook/ilike/website, but a tiny – maybe less than 1%, end up as a transaction.
So, at this point it seems artists should only spend 10% of their time driving their music 2.0 strategy. Until perhaps the percentages are reversed.
11. Music Investing.
The fact will remain that artists will need “investors” to rise above the noise.
Artists / managers that can figure out what to put into a business plan that will attract/raise $1M to $5M to grow a business, will then have everything they need to do what a major label does today.
All of the things a label can do, can be purchased.
The problem – risk. The solution – risk mitigation…
I view the album as an artistic construct. As long as artists want to deal with broad themes across multiple three-minute slices, there’ll be an album. I hope.
Although I doubt it is an issue keeping record companies awake at night, as a fan I think there is at least one more question we should be asking:
11. WHO PROTECTS THE TALENT? In an ever-expanding margin with no centre (the Long Tail) and uncertain revenue streams, how do we identify and nurture the truly exceptional? It is all very well having a massive musical “middle class” but it is the aristocrats of art who matter most. From Bob Dylan to David Bowie to Bruce Springsteen to U2 to Nirvana, many of the greatest and most influential artists of all time have been slow developers whose early albums were unprofitable and who were effectively supported for years by the patronage of major record companies. Where will the all time greats of the future come from?
We have developed a direct to consumer music marketing & promotion site online to address some of these problems. Competition will give way to collaboration. Control will be replaced by facilitation. Artists will form new communites where music lovers will swarm through the content. It’s in the nature of the Internet and us.
Brad Parker
Co-Founder
http://www.muzlink.com
#11: Power to the people!
The emergence of the network paradigm makes the power of people both more potent and more visible than ever before. This is true for both the producers and the consumers of music. Or anything.
In just a few short years the network effect has totally eviscerated an industry to the point that a presumed “thousand true fans” could support hundreds of thousands of “true artists” filling a million niches in the long tail, simply by virtue of being themselves. In theory, anyway, this is true.
People power. Now with industrial-strength disruptive force!
ian rhett
http://www.ianrhett.com