David Byrne Breaks Down New Business Models For Musicians; Confirms Radiohead's Success

from the changing-world dept

Wired is running a couple of stories involving well-known musician David Byrne. The first is an interview with Thom Yorke from Radiohead, where he confirms what a huge success the "name your own price" offering was, contrary to CNN's editors calling it dumb. According to Yorke: "In terms of digital income, we've made more money out of this record than out of all the other Radiohead albums put together, forever." Yorke also confirms other things that we've said about new business models, where touring can be a big part of the model (contrary to people who insist that's impossible). Yorke notes: "at the moment we make money principally from touring." Yorke admits that he's not a fan of touring (partly for ecological reasons), but that's how the band makes money (this is similar to what we've heard from other bands as well). So, again, given all the publicity around the "name your own price" deal (which Yorke admits they basically tried on a lark and only agreed to it right before announcing it), it should pay off well with more people willing to pay more money to see the band on tour. The one thing Yorke says that I disagree with is the idea that the model only works for Radiohead due to its following. As we've pointed out, most of the examples of bands successfully trying similar models involve much less well known acts. In fact, Byrne himself later points to the success of Jane Siberry, who tried a name your own price model years before Radiohead, and certainly didn't have the same huge following, but found that the model was quite successful.

The second article is by Byrne himself, where he does a nice job breaking down the business models of the recording industry. Much of what he says will sound familiar to folks around here, though he adds in some interesting numbers concerning how much a musician makes per CD and per iTunes download (it's not much). He points out that the value proposition of a record label is decreasing rapidly as areas where they used to be needed (money for recording, promotion and distribution) are approaching free in cost, meaning the labels provide little, if any, value on those points. He then lists out what he believes are the six business models a musician can adopt these days, noting that it's nice to see more than just a single option. This highlights another point we've tried to make: the new business models for the music industry mean that there isn't just one business model for every musician. In fact, just about every successful new business model we see is slightly different -- though most pick up on some important economic cues. The one problem I have with Byrne's explanation is that it still mainly focuses on one thing: how do you sell the music itself. This comes even after he talks about how the idea of selling music is only a recent phenomenon, and historically, music was always tied to the performance itself. The less bands focus on "selling music" and the more they focus on using the music to sell other stuff, the faster a path to success will become clear.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    icon
    Eric Aitala (profile), Dec 19th, 2007 @ 7:13am

    Digital sales

    I think Thom said that they made more from 'In Rainbows" than all the DIGITAL sales of all the other Radiohead albums combined.

    Listen to the audio interview...

    Eric

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      PaulT (profile), Dec 19th, 2007 @ 7:57am

      Re: Digital sales

      "I think Thom said that they made more from 'In Rainbows" than all the DIGITAL sales of all the other Radiohead albums combined."

      From the article you've just responded to (emphasis mine):

      "According to Yorke: "In terms of *digital income*, we've made more money out of this record than out of all the other Radiohead albums put together, forever."

      Your point?

      Seriously though, this article points out again the difference between artists and the "industry" quite well. Byrne, who has a reputation for being open-minded and not exactly unsuccessful himself, confirms that the digital plan seems to be very successful (though not for everyone). The industry people who write for CNN/Fortune bemoan the digital focussed strategy, joining in with the attempt to prop up their old busniesses.

      Yorke's comment is also very revealing in a number of ways. Mainly, he's pointing out that the album made more for them that *their entire back catalogue* in the digital format. Whether or not this success is repeated when the CDs come out will be another matter. Either way, you have to be pretty blind to what's happening to seriously believe this was anything but a success.

       

      reply to this | link to this | view in chronology ]

      •  
        icon
        Eric Aitala (profile), Dec 19th, 2007 @ 8:13am

        Re: Re: Digital sales

        I just wanted to make sure no one was under the impression that the digital sales of 'In Rainbows' was greater than the sales of the previous physical albums.

        It could be misunderstood if read quickly...

        Eric

         

        reply to this | link to this | view in chronology ]

  •  
    identicon
    atomatom, Dec 19th, 2007 @ 7:54am

    If Yorke is concerned about the environmental impact of his tours he could just try stuffing his equipment in a van and driving around to a few cities. Surely being big and famous doesn't mean you have to fly all over the world in private jets with a huge entourage.

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      Eric Aitala (profile), Dec 19th, 2007 @ 8:16am

      Re:

      Actually he said that most of the environmental impact is from the audience coming to the concert.

      Also, check today's post on radiohead.com about what they are doing for their next run of concerts.

      Eric

       

      reply to this | link to this | view in chronology ]

    •  
      identicon
      Gunnar, Dec 19th, 2007 @ 9:45am

      Re:

      He's concerned about the impact of all of his fans driving to see Raidohead on tour.

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    Anonymous Coward, Dec 19th, 2007 @ 8:25am

    Pointless old redundant news.. seriously. All this patent and music talk on techdirt is getting OLD. Something new please?

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      Mike (profile), Dec 19th, 2007 @ 9:30am

      Re:

      Pointless old redundant news.. seriously. All this patent and music talk on techdirt is getting OLD. Something new please?

      20 stories on the front page. As of right now there are 2 about music, nothing about patents. What's the complaint again?

       

      reply to this | link to this | view in chronology ]

      •  
        identicon
        Anonymous Coward, Dec 19th, 2007 @ 9:43am

        Re: Re:

        The point being that this story really had very little to do with technology and that you continue to cover something you really have very little experience with.

         

        reply to this | link to this | view in chronology ]

  •  
    identicon
    BandsBandsBands, Dec 19th, 2007 @ 9:05am

    Armchair experts abound...

    These armchair quarterback discussions are always so short sighted. They all focus on examples of bands that write their own music. Does anyone who is "reporting" or "commenting" on the poor state of the pay for music paradigm know the percentage of recorded songs (and resulting revenues) that are written by someone other than the recording artist?

    In the "music for free" or "name your price" models how do you propose to pay the creative powerhouses that write over 50% of country songs (and many other genres)? How does the free model or name your price model compensate the writer when covers are made of the greats (think Bob Dylan, Clapton, Zeppelin, etc.)?

    I'm open to suggestions. But for all the "experts" who love to chime in regarding how the industry must change its view of charging for recorded music, I've yet to find someone who thoroughly understands all the moving pieces. More importantly, I see no discussion of how ignoring the copyright benefits for songwriters and composers could impact the long term quality of music, tv/movie scoring, etc.

    Take a survey over the last decade of songs across all genres that hit the top 100 on Billboard. count the number of songs that weren't written by the recording artist. Study how those folks get paid for their efforts. Think about how this fits into these free or donation models. Then come back and explain how these models provide incentive for them.

     

    reply to this | link to this | view in chronology ]

    •  
      identicon
      Josh, Dec 19th, 2007 @ 9:19am

      Re: Armchair experts abound...

      In the "music for free" or "name your price" models how do you propose to pay the creative powerhouses that write over 50% of country songs (and many other genres)?

      Well, one possibility is that this model of having different artists and songwriters is not economically sustainable, and so this will change if the In Rainbows-style of promotion and sales is embraced. It's just a possibility, it likely won't happen, but it could. If groups that write their own music are more profitable/successful than groups that don't, then they'd disappear.

      I think this is also a good time to mention, as has been mentioned many times here, is that there are many different business models for musicians to follow here. Some will work for certain acts and some won't.

       

      reply to this | link to this | view in chronology ]

    •  
      icon
      Mike (profile), Dec 19th, 2007 @ 9:34am

      Re: Armchair experts abound...

      These armchair quarterback discussions are always so short sighted.

      Yeah, other than the fact that it's folks like David Byrne, Thom Yorke, Courtney Love and others having the discussion... those are hardly "armchair quarterbacks."

      More importantly, I see no discussion of how ignoring the copyright benefits for songwriters and composers could impact the long term quality of music, tv/movie scoring, etc.

      I've actually discussed it at length in the past. I'm sorry that you feel that we've ignored the topic, but I figured it had been put to bed already.

      Again, songwriters can get compensated the same way other writers do. It becomes a paid for hire business. And, yes, no one knows if the song will be a hit beforehand or not, so early on you're working for not very much (just like most writers). But then, once you get a big hit, your writing skills will be in big demand, and your price goes up.

      It's pretty typical of just about any other industry. Not sure why you think it's impossible for the recording industry. It's not.

       

      reply to this | link to this | view in chronology ]

    •  
      icon
      PaulT (profile), Dec 20th, 2007 @ 12:48am

      Re: Armchair experts abound...

      First of all, there's several different business models available. The In Rainbows one is the one that's getting most coverage at the moment because it's proving that a band who performs and write their own material (e.g. the kind of band that's been sorely lacking in much of the pop market over the last 10 years) can become successful without having to sell their next 6 albums to a RIAA member.

      There is a place for the labels when cover versions start to be looked at. Indeed David Byrne's article above lists 6 distinct models. I don't think that anyone suggests that there's absolutely no need for the labels any more, just that their assumptions (e.g. free = lost sales) are wrong and they need to adapt to survive, and that they're no longer necessary in all circumstances.

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    drkkgt, Dec 19th, 2007 @ 9:41am

    not the consumer problem

    How does the free model or name your price model compensate the writer when covers are made of the greats (think Bob Dylan, Clapton, Zeppelin, etc.)?

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    drkkgt, Dec 19th, 2007 @ 9:42am

    not the consumer problem

    How does the free model or name your price model compensate the writer when covers are made of the greats (think Bob Dylan, Clapton, Zeppelin, etc.)?

    Wouldn't that be up to the musician and writer to work out? I mean, the whole idea is about using the song as a sort of loss leader to get people hooked into concerts, t-shirts, and other stuff but that doesn't meant the songwriters shouldn't get a cut of those.

    I don't go to the store and purchase a box of Kleenex and worry about the workers who built the box, or built the software that runs the plant. That's for the company who slapped their name on the box. If a company doesn't pay the back end, they tend to fade away or get sued into oblivion.

    Let's face it, in the current system if you look at the price charged for a CD and digital version, is the writer being paid fairly now?

    sorry for the double post, always remember to close your tags

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    TW Burger, Dec 19th, 2007 @ 11:21am

    The new music model

    What we are seeing is the beginning of a new business model for musicians that completely eliminates recording companies. This was obvious several years ago when the MP3 codec became popular. The missing piece was the iPod.

    A band no longer needs the record label. As the article explains: "...the value proposition of a record label is decreasing rapidly as areas where they used to be needed (money for recording, promotion and distribution) are approaching free in cost...".

    Bands can start out by setting up a basic Web site or paying a small fee for a service and giving away music, at first, to promote live performances. The musicians will make money touring and if they become popular enough can then sell music over the Internet.

    Now a musician needs (besides talent and musical skill) a good head for business, some technical knowledge of the Internet and computers, and a lot of hard work. Since musicians are generally not the Harvard School of Business MBA types there is ample opportunity for entrepreneurs to offer services setting up a Web presence and promoting the musical act. It could be thought of as a power shift to the agent, as well as the artist, who can then still make the same percentage fee but will make far more money, as will the artist/band, by arranging the music distribution as well as the club dates and the transportation.

    The record labels are in a very good position to offer these services and make a very nice profit. They still control access to the radio markets which is and will continue to be a major source of market exposure and they certainly know how to promote. What the have not learned, so far, is to give up the idea that they can control all of the money and keep most of it for themselves. This thinking will not work in a world where a teenager with Web and programming skills can provide as good a distribution system as any multi-billion dollar media giant.

    The music consumer is and will continue to benefit from this power shift. No only is the music cheaper and easier to obtain, but the music, being controlled by the musician, be of far better quality and diversity.

    This is a change to a system where hard work and talent has an advantage over hype and money.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Shun, Dec 19th, 2007 @ 11:53am

    There may be a problem here

    #7 wrote: "how do you propose to pay the creative powerhouses that write over 50% of country songs (and many other genres)"

    OK, now here is the problem. Why must over 50% of the songs performed by country and other artists come from professional writers? I personally think that over half of all the songs I hear on the radio are crap, so maybe the so called "creative powerhouses" are the problem. Solution? Starve them and their weakling studio "artists" as well.

    From the same post: "How does the free model or name your price model compensate the writer when covers are made of the greats (think Bob Dylan, Clapton, Zeppelin, etc.)?"

    Look, this whole "current artist covering a great classic" meme has got to stop. Is the world so bereft of great ideas that we can't think of any new music? This is more studio B.S. For one thing, how are artists compensated currently? Poorly, perhaps? If we were to shine a light into this dark little corner, I wonder what we'd find?

    Anyway, I guess I'm done. Digital distribution is changing the way "consumers" discover, share, and enjoy music. The old model is not going to work. Professional writers hiding behind glitzy pop stars will probably be casualties, unless they can put up myspace pages and sell their words to glitzy YouTube artists.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Anonymous Coward, Dec 19th, 2007 @ 2:04pm

    So the good writers end up making their money by charging (upfront) for their work, which prices out unknowns from their talent. Unknowns either have to write their own music or buy from crappy writers. Current artists stop covering great classics.

    Sounds to me like less music is created, less quality music.

    As a non iPod (or any other mp3 player) owner, I don't care. Have fun with your generic future.

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      Mike (profile), Dec 19th, 2007 @ 2:39pm

      Re:

      Sounds to me like less music is created, less quality music.

      Huh? Not even close. Just look at what's happening now. With less respect for copyright, we're seeing MORE music than ever before created. The same is true just about anywhere that copyright is weakened. So your entire premise is wrong.

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    BandsBandsBands, Dec 19th, 2007 @ 2:25pm

    "have fun with your generic future" - exactly.

    Everybody assumes the "good" music is written by the people in a band, and therefore this free or donation model won't really hurt quality. Instead they assume it will weed out the bad "radio" music. Go do your fact finding and enlighten yourself.

    There are tons of great musicians who can't write music (or don't make a successful effort for whatever reason). There are tons of great writers that can't record or perform well (or don't make a successful effort for whatever reason). I've yet to see any of these models seriously address this critical piece of the equation, not to mention the scoring aspect.

    I'm sure there is a way, but none of the current proposed models will work without having a serious impact on long term quality.

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      Mike (profile), Dec 19th, 2007 @ 3:23pm

      Re:

      Everybody assumes the "good" music is written by the people in a band, and therefore this free or donation model won't really hurt quality.

      Nope. Never assumed any such thing. Not sure why you would claim that we had. I've actually assumed the opposite. With more business models available, there will be even more ways for songwriters to make money.

      Instead they assume it will weed out the bad "radio" music.

      Again, I have never assumed any such thing. As I've said repeatedly, what we'll see is a lot MORE music being created (we're already seeing this), so if anything that will mean a lot more bad music -- but a lot more good music too.

      There are tons of great musicians who can't write music (or don't make a successful effort for whatever reason). There are tons of great writers that can't record or perform well (or don't make a successful effort for whatever reason).

      Indeed. Who said otherwise?

      I've yet to see any of these models seriously address this critical piece of the equation, not to mention the scoring aspect. I'm sure there is a way, but none of the current proposed models will work without having a serious impact on long term quality.

      Er... I explained above one such business model, but there are many such business models. As I've made clear, for bands that understand the economics, there's lots of money to be made... and if there's lots of money to be made by bands, then there will also be lots of money to be made by songwriters.

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    Anonymous Coward, Dec 19th, 2007 @ 2:40pm

    Production and distribution are approaching free.

    Promotion is still VERY expensive, especially if you want to reach beyond the Web 2.0 crowd who read tech sites like this. If you want to promote to mainstream America you better bring cash.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Anonymous Coward, Dec 19th, 2007 @ 5:00pm

    Re. "the web 2.0 crowd" v. "mainstream America" You show me one person who hasn't used YouTube, and I'll show you an eighty-year-old flat-Earther. My grandfather was born before cars were common and he's always emailing me Slashdot articles, talking about some new RSS feed he found, or bringing over the results of a recipe he picked up online. He's *seventy* years old. Given the absurd numbers online these days, I shudder to think that "mainstream America" isn't *synonymous* with "the Web 2.0 crowd"

     

    reply to this | link to this | view in chronology ]

    •  
      identicon
      Anonymous Coward, Dec 20th, 2007 @ 7:25am

      Re:

      I shudder to think that "mainstream America" isn't *synonymous* with "the Web 2.0 crowd"

      Spoken like a true member of the digerati

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    Mirage, Dec 19th, 2007 @ 5:01pm

    Oops, that was me up there. Firefox neglects to save my fields on TD for some reason. =(

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Innovation Catalyst, Dec 20th, 2007 @ 7:42pm

    Business model?

    Until I came here I didn't know there were still people referring to Radiohead's buzz marketing scheme as a business model. But anyway...doesn't anyone else find it ironic that "(i)n terms of *digital income*, (they've) made more money out of this record than out of all the other Radiohead albums put together, forever," yet they haven't even released the CD yet? It was the lowest quality MP3 they could provide, and people gobbled it up due to the viral aspect of their 'stick it to the man' theme. People weren't buying music, they were 'donating towards a cause.' And all the while they intended to release the high-quality version on CD.

    And fans, being fans, forgive them for the deception. If that's not a brilliantly cynical marketing strategy I don't know what is.

     

    reply to this | link to this | view in chronology ]

    •  
      identicon
      jim, Dec 1st, 2008 @ 4:10am

      Re: Business model?

      First of all, there's several different business models available. The In Rainbows one is the one that's getting most coverage at the moment because it's proving that a band who performs and write their own material (e.g. the kind of band that's been sorely lacking in much of the pop market over the last 10 years) can become successful without having to sell their next 6 albums to laptop battery a RIAA member.

       

      reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This