Well, how to start... This is not only the first article in this Blog but also a very complicated and emotional topic. I guess anyone in the music business, no matter if major or independent, artist or producer, even a record collector as well as a top40 listener, is asking himself where the current development of dropping cd/vinyl sales (and industry players whining about not having much money left) will lead to?
And guess what: Nobody knows! Not Warner, neither Sony, and even Trent Raznor of the Nine Inch Nails - who usually has a lot to say about the future of music - doesnt have a clue (But check our this cool article about the future of music promotion for newcomer artists anyway: http://snurl.com/qktzl )
Please be aware that I in no way can find solutions or even cover the whole complexity of the current situation. All I want to do is share some thoughts which I think are interesting. Some of them of course, will be applied to the strategy of shadybrain.
We have some Facts:
1. Piracy (not MP3s) IS hurting the music industry
2. It affects both, the major AND the independent labels
3. The major industry tries to get rid of this problem by hunting down illegal downloads
4. Meanwhile the MP3 industry is developing well but not covering the loss made in the traditional markets
5. Without enough income for their music artists can't produce their art in a sufficient way
6. Nobody knows what to do...
CHANGE - THEY DID NOT BELIEVE
It is no secret (the music industry literally bangs on a big bell here) that the majors have lost huge amount of money from music sales since the start of Napster back in 1998. The reason is: The big companies have been sleeping on the possibilities of distributing music on the internet and the so called pirates, in this case Napster, have just been faster in using this "new" technology. Before the industry could react, people all over the world adapted to the new given possibilities and realized, that music is available fast and free! Nice1! Just look at these figures, showing the album sales from the year 2001 up to 2012:
It's going down. Of course, piracy is not the only reason for this but a major one and if anyone now states: "Well, the major music industry has deserved to die as they are putting out shit anyway, ripping off artists, killing subcultures, etc, etc" he might have a point but - this decline in sales also hurts Indie labels and last but not least artists themselves. Oh, no whining here though. We all can't turn back time or technological progress, so lets face it, things have changed. Like Canadian media-scientist Marshall McLuhan said: "The Medium is the message", meaning that if there is a change of the medium there is always another, often sociological change happening among the way. So, welcome MP3, here is change!
How did the industry react to that change? Described in two words: TOO SLOW! One of the first real alternatives to illegal leeching was iTunes, which had it's U.S. launch in 2003, it's Europe launch in 2004 ( I mean c'mon, that is 5 years after Napster was launched and 2 years after it was shut down). iTunes seemed to work well, as it sold relevant amounts but still, although Napster was history, it had serious competitors like Kazaa, Audiogalaxy, IRC, etc... And these competitors had a thrilling offer: Music there did not cost a cent. One thing is amazing though, especially for Apple. By inventing iTunes they followed an old marketing strategy which was actually the reason why the whole music industry was invented: They used music as a marketing tool to sell hardware. Of course this hardware is (in the case of Apple) the iPod. Millions of iPods later Steve Jobs was fine off, the music industry was not. All the millions of digital sales did not (and still do not) cover the loss in the traditional physical market (see graph above).
DAVID vs GOLIATH
Who is who?
The result of the sleepy and I must say not really innovative moving of the music industry is a war. A war against piracy, but let's be honest, it's a war against users which affects everybody. Even Mr. Doe, who always buys his MP3s legal and afterwards has to deal with awfull DRMs (copy protections) which limit him in dealing with his paid musical property. Big headlines which have been seen on newspapers and websites recently the following:
As we learn from just these three headlines piracy is a hot topic these days. Governments try to block certain content, trials shut down websites, and users like Tenenbaum have to pay 22.500 $ for a single song, they have illegaly downloaded. Do you think this strategy of war sounds promising? Well, I don't. Besides these tactics do not appear too sympathic in the first place, I think the fight against pirates is like Don Quijote's fight against windmills. Like expressed through the picture above we have a fight like the one between David and Goliath. But these days it is a question of "who is who"? It is likely, that the pirates are the new Goliath (is this Goliath evil then?), as it seems impossible to get hold of them, of technology, of progress. The point is: There is no stopping filesharing.
FAITH NO MORE?
Now, if there is no point in fighting piracy, what do we (the labels, the artists) do now? Fact is, that a certain amount of music industry is needed if we want to have good music in the future. Some say that all music should be for free and just be used as a promo tool for concerts, which actually would provide the amount of money artists need to survive. But what about artists who do not perform? And what about artists who do not sell out the O2 arenas in London or Berlin? What about artists, who are not superstars like Radiohead and would not make any money if they put their album up the web and let users decide what to pay for it? No, we do need the income from music sales in any case. And I do think that the medium MP3 in combination with the internet offers a perfect solution for both, superstar artists, independent artists, and newcomers!
I will provide answers and ideas in Part2 - Following Soon!