Music industry watch

The Future of Music and the NEW music industry

The Future of Music Policy Summit in DC earlier this month was as explosive and emotional as the previous summit I had attended. Going into the summit, I was recovering from Burning Man and was still a bit underslept from my return from the dusty playa. I wasn't pumped about the conference and the first panel didn't really get me into the conference.

But a little ways into the second panel "Panel 02: New Label/No Label Models" I started waking up and coming out of the haze (the triple espresso I had just prior to the panel may have had something to do with it). When Melissa Ferrick was talking about her label "Right On Records" things started clicking for me. She talked about her desires for a label and how the majors weren't equipped to give her what she wanted -- so she started her own label. She still does CD distribution via CD Baby. Click!

More and more small artists are finding themselves in the same spot as Melissa. They distrust the labels, but know that their music is good enough to draw a crowd and sell some CDs. Instead of these small artists trying to go for a major label contract, they are opting to create their own micro-labels. I see micro-labels representing a handful of bands, not hundreds of bands -- this allows the label enough time in the day to focus on all of their artists, not just the top selling ones. One panel member commented about how they got a talking to from a label exec for just selling one million CDs of their latest release -- next time would need to be less disappointing! Many artists would be happy selling a fraction of that, but for the majors this is unacceptable. Micro-labels will be able to focus more time on the promoting all their bands and presumably the labels would have bands that shared some common traits in order to share the same marketing and promotion channels.

The writing for this has been on the wall for some time, but once I started looking at the summit in these terms, a lot more things became clear. A number of companies that were talked about or sponsoring the conference provide services for small artists:

• Royalty Share -- They provide royalty and licensing services for smaller labels. The legal affairs for micro-labels can be a real stumbling block and outsourcing this headache to people who specialize in these matters should allow the labels to focus on promoting artists, not worrying about the books.


• CD Baby -- someone has to take up the headache of selling CD's. CD Baby does it well and also handles getting your content into online distributors.


• OnlineGigs -- promotion and touring tools for bands.


• ArtistShare -- allows artists to raise money from fans to create new works.

Pretty soon bands will be able to join or create micro-labels that pick and choose their services from a number of providers. These services would've normally been handled by regular labels but at huge costs to the artists. In this new model the artists retain their copyrights and the micro-labels spend their money wisely and focus on their few bands. This new model also doesn't require any nasty changes in copyright law -- it simply assumes normal capitalistic rules for commerce that exist today. The labels can do their work inside the current confines copyright legislation -- all the headaches can be outsourced initially -- in other words, the new model is ready for business today!

I'm excited by this new model of doing business in the music industry -- I'll keep my eyes and ears open about new developments and I'll blog them here in the meantime. Stay tuned!

Posted by Mayhem at September 22, 2005 01:54 PM