Bands Rushing To Ditch Labels And Embrace Free; Are The Floodgates Opening?

from the tipping-point dept

We've only been predicting that music would eventually go free for about a dozen years, but it feels like we may be nearing a tipping point among musicians recognizing this simple truth as well, kicked off by last week's Radiohead announcement. Suddenly, similar announcements seem to be coming fast and furious. Apparently both Oasis and Jamiroquai are interested in following Radiohead's lead and the Charlatan's (managed by a member of Oasis) is already doing the same. On top of that, Trent Reznor proudly announced today that Nine Inch Nails is now free from its record label contract., from the band The Black Eyed Peas, announced "the new distributor is your niece" in discussing how he plans to promote his new solo album.

There are two key things to note in all of this. First, all these bands feel the need to ditch big record labels to do this (and, no, that doesn't mean that small bands without recording contracts can't succeed this way too). This is a sad state of affairs for the record labels -- because there still should be a place for them in helping to promote and market a band, even if they're giving away the music for free. It's just that they're not venture capitalists any more and bands don't need help in distributing content -- two businesses the record labels insist they're in. What's really sad here is how clueless the record labels remain to this reality. In a Reuters article about the Radiohead move, a record industry insider mistakenly claims that this trend is going to hurt the music business because bands will rush out singles instead of albums. Apparently that insider only read the first half of the details of what Radiohead is doing (as well as what others are doing). They're doing exactly the opposite. They've put together a whole "discbox" with lots of extras to make it more compelling to buy. specifically made his latest album a "cohesive story" to encourage people to buy the whole album. Reznor purposely tried to make his CD as cool as possible (it changes colors when you play it in a CD player) to encourage people to buy it -- even as he tells people at concerts to download his songs.

That brings up the second key point. For all the whining about "free" music, the complainers keep missing the fact that free is only a part of the business model. This seems to be the thing that people get most confused about when we discuss business models around free music. They get stuck on free and assume that if something's free, there's no way to make money. But, all of these bands are showing exactly the opposite is true. The Times Online has a story incorrectly headlined "The day the music industry died" discussing these exact changes, but as you read the details, the music industry is doing just fine -- it's just the folks in the recording industry who are in trouble. Musicians are raking in record revenue from concerts -- and the artists are realizing that the free music only helps generate more interest in those concerts. Listen to Alan McGee from Oasis and the Charlatans, saying that giving away the music for free was a can't miss proposition: "We increase our fan base, we sell more merchandise, more fans talk about the band and we get more advertising and more films (soundtracks). More people will get into the the Charlatans and will probably pay the money to see the show. I presume it will double the gig traffic, maybe even treble it."

In other words, more bands are recognizing exactly what a bunch of folks knew was inevitable at least a decade ago. Unshackle the music, give it away free, and use it to make a lot of other stuff a lot more valuable, and there's plenty of money to be made. The only sad part in all of this is that the record labels have been not just blind to the idea -- they've actively tried to discredit anyone who pointed it out to them.

Filed Under: business models, economics, music, oasis, radiohead, trent reznor

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  1. icon
    Mike (profile), 10 Oct 2007 @ 1:43am

    Re: Re: Uh, hello, McFly?

    If you're not able to tour to support your music, and you're supposed to give it away for free, then where is the income supposed to be?

    For nearly a dozen years, I've been suggesting other areas where bands can make money. Touring is *one* aspect, but hardly the only one.

    The trick is to find what other *scarce* goods you can sell. That includes *time* *access* and even the *creation of new songs*. All of those are scarce -- and none require touring. Again, read a bit more on what I've written in the past. There are many business models for music that don't require touring at all.

    If I was as big as radiohead, or as big as trent reznor, then sure - I don't need to tour.

    This is kind of like saying if I were as famous as Walt Mossberg, then maybe I wouldn't have to write so much. Fact of the matter is, if you want to make money, you need to work -- and you need to do it in a space where the money is. Touring is one such space. Just because *you* don't want to do so, doesn't mean that the world owes you money.

    Where else am I to look for income, when all I got is the music itself, and apparently should give it away for free?

    I've given plenty of examples... If you really think that all you have is the music itself, then you're sorely mistaken. You use the music to build up a fanbase, and then there are tons of ways to make money from those fans, and it doesn't have to include touring. There's access -- virtual access to you if you're so afraid of actually meeting your fans. There's the ability to create new songs. There are sponsorship opportunities. There's merchandise. The list goes on and on.

    I'm not sure why you keep repeating the false claim that there aren't other business models out there. We've pointed out plenty of examples, and explained the economics at work. It's not hard to come up with plenty of other ideas if you didn't want to blame everyone else for not handing you money on a silver platter.

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