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. Will.i.am, 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. Will.i.am 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. identicon
    Mr Ken, 12 Oct 2007 @ 5:24pm

    To follow up, i just run into a post on another site that sums up my point. The major weakness of the no major label method. Lack of musical exposure and lack of financial income, which ultimately is the bottom line for any aspiring musician. To get their music "out there" and make a living with music.

    As many have pointed out, however, Radiohead is only able to pull this off (assuming that it's working) because of its high profile -- which is, to a certain extent, a result of their having been promoted by their former label (EMI) for so long before that.

    "The only reason they could pull something like this off without making a dent in their income is because they are a huge world-renowned force in the music world. If 'Pablo Honey' [the first Radiohead album] was sold and promoted solely through a website at a fan-determined cost, the 17 people who purchased it via that medium would have been happy, but alas 'Radiohead' would be another on the 'where are they now' circuit."

    If labels become obsolete as their well-known bands bail out, where are tomorrow's "established" artists going to come from? Hopefully not MySpace.

    Of course indie bands giving away their music has been going on for years, distribution online is just a new way of doing the old give our new ep for display for free at the local records store to promote our band trick but to a much wider audience.

    Summary, i can see established talents drop the label but how would upcoming indie bands and artists get there without the label financial muscle, experience and connections? It's definitely a step in the right direction though, for years, the power scale has been over unbalanced in favor of the label.

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