I reread two exceptional pieces by Umair Haque about the music industry, and it made some of the stuff from the GrammyTech conference make more sense. There’s no doubt the music business is in dire straits, but the music industry has an opportunity to do great things for fans, yet that seems to be the last thing on every executive’s mind. Ironically, a lot of the tactics major labels are using do nothing but accelerate their losses.
The business model of all the majors is to go for the short-term and easy money instead of fostering a fan base. They target an audience that will buy the single, then never listen to the band/artist again. They go for the quick cash.
This stems from the problem of being a publicly traded company. The scenario goes like this: majors will project their quarterly earnings for the shareholders, but one of the hardest things in the world is to predict when art will be ready. Then Clive Davis and the like come in. He is the master at taking soulful, great music, removing all of its character, then taking the base elements of what works and applying it to a TON of songs. This is how you get boy bands, pop stars, any manufactured acts. They take music and try to put it in a formula, but unfortunately, music is not inherently formulaic. Majors love hip-hop, because it’s one of the easiest genres to make (note – I said make, not make WELL. Good hip-hop is as difficult to make as any other genre).
This isn’t the only problem with the major’s business model. For as long as the music industry has been around, records have all cost about the same amount. Bob Dylan’s greatest hits and Katy Perry’s new album cost the exact same on Amazon. Gee, which album is going to be a better deal? It’s like having a broken bicycle cost the same amount as a Rolls Royce.
Umair talked about how file-sharing is not only about saving money, but about risk-sharing. So much of mainstream music is terrible, fans don’t usually want to take the risk of spending money on something that could be awful. Majors don’t understand that when they screw the fans, they only screw themselves.
Ultimately, the jobs of labels isn’t to serve the artist, but to serve the fan. Priority one should be giving fans great music to listen to. How do they do this? They foster the artist, making sure they have reached their full potential as a band. They stop indulging on things that don’t matter, like private jets, and invest in making themselves the best possible label they can be.
Labels should be thought of aggregates, people who do the dirty work of finding all the good bands, so the listener doesn’t have to. Unfortunately, the labels have not done their jobs. The myopia at the conference about “legacy” is even more apparent, because what labels don’t get is that they failed completely at being the aggregate. They failed at being THE place to get good music. Labels have fallen so far that people use their most expensive resource, time, to get good music
So, how do labels get people to stop stealing music? Focus not only on making better music, but insuring the fans. The answer is subscriptions. People should pay a base amount to download any type of music, that way they can compensate themselves for lost money and time of terrible music, by gaining great music they might have not spent the money on otherwise.
The answer isn’t to cut costs until profits are so marginalized the business doesn’t work, but to give listeners some sort of insurance that their money won’t be wasted. With a $15 album, if you don’t like it you’re gonna be pissed off. With a $15 subscription each month, you won’t care because you can download as many songs as you want. If the labels give the consumer a certain guarantee their money won’t go to waste, why wouldn’t they spend the money?
I could go on longer, but this post is long enough. In short, the major labels need to wake up and realize that it’s about the fan, even though they forgot that decades ago. I don’t have high hopes for the future of the big guys, but if the indies start turning around and fostering great music, the industry will be just fine.