McComas Music World

The music industry in 2011 is experiencing life at the crossroads. The landscape of the music industry is diversifying in nearly every aspect.  Shifting technology, listener preferences, retail and merchandising, live booking, and competitive behaviors have all changed significantly the past few decades.  The shifting technology has always been a major part of the industry dating all the way back to the Tin Pan Alley days, but new technology has really been overwhelming.

Back in the Tin Pan Alley days, music publishers bought and printed sheet music of composers and lyricists, and sold them through retail concessions and licensed agents.  In commonality with today, artists tried to reach their consumers directly by having their music performed in dance halls, bars, and other variations.  The advantage would go to the publishers in the early eras,  and unlike social media and internet musicians of today, who have gained the marketing and market freedoms.

From the early 1880′s the major players in the industry were Edison Phonograph, Victor Talking Machine, and Columbia Phonograph companies.  These companies dominated the upcoming decades by signing performers, owning patents for years to come, and eventually creating relationships with early radio.  The records and artists not the machines would become their primary source of profits.  Over the passing years of the 20th century, merging, radio relationships, and technological advancements finally gave birth to EMI, Warner, MCA, Sony, and Columbia.  These companies changed with the technology, from vinyl records, to cassettes, and even with the launch of MTV and compact discs in the early 80′s.

The question now is whether technology has taken complete control of the industry and passed the torch directly to the consumers.  Digital downloading has given away to a massive dynamic change in the industry, followed by an even more challenging pirating issue.  Everyone has experienced, or read about Metallica-various bands and napster lawsuits for MP3, CD ripping, and file sharing. The argument and challenge is not just for massive record companies, but for the struggling everyday musician.  The music industry reported in 2008 that overall sales were down $10.3 billion in the U.S. markets and $19.4 billion globally.  Major bands such as Radiohead have broken away from labels, and had huge success with independently releasing the album In Rainbows.  Numerous reports claim the band sold $10 million dollars worth of downloads at an average of $6 per download, although it was offered for free.  The big discussion is whether Radiohead would have been able to achieve this without the prior advertising and marketing promotions of EMI for over a decade - before the band broke away?

Many artists are utilizing technology to their advantage, Youtube, Myspace, Facebook, and various social media networks.  Independent bands are finding independent recording studios to help them with album production, and other fun niches.  Apple has found strategic ways of design thinking, and are one of the top innovators in capturing the modern music industry.  Itunes, Ipods, Ipads, and Iphones are just a few ways they are innovating the industry, and gaining a competitive advantage.  Itunes may gain more successful future returns if pirating networks eventually begin to gather a conscience and realize that they are indeed stealing music, and in many cases stealing from individual musicians and not even necessarily companies.  Another company trying to gain a competitive advantage is Live Nation, who started in 1964 as a promotion firm signing artists like Jimi Hendrix and the Rolling Stones.  Currently Live Nation is producing 16,000 concerts annually, for 1,500 artists, in 57 countries, which includes selling 45 million tickets to roughly 150 venues.  Live Nation has acquired all rights to events at Hollywood’s Palladium, London’s Wembley Arena, all House of Blues venues, and numerous others.  Along with these acquisitions they have developed 500 corporate sponsorships, merchandising, and all venue concession services.

The reason for talking about all this is to help independent musicians understand the complexity of the business in this millennium.  Everyone in the industry needs to be actively asking themselves the questions about tackling the future.  How will they market, find a market niche, create music, navigate social media networks, find proper touring management, and most of all make a gain in a dynamic industry? This doesn’t just apply to the artists, but record companies, independent studios, tour managers, talent advisors, and anyone entering the industry.  A few big questions for many are, will their even be room for new artists to sign a 12 year-6 cd deal?  Will the the record company be able to afford the marketing expenses, if a majority of the album sales are forgone because of pirating?  Can an artist get a reliable deal afterwards with a large venue provider, and would it be mutually beneficial?  After looking at numerous financial statements from many of these companies, it seems like the future is very clouded, and could use a few new creative design thinkers and artists to help them move forward.  Perhaps a positive sign is that Arcade Fire a fairly unknown and independent band from Canada, won album of the year this year, over many other highly marketed artists.  Could it be a sign that independent bands, through creative marketing, and independent brand image are demonstrating what the future might hold?