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
    Danny, 9 Oct 2007 @ 12:12pm

    Nice...

    It's good to see the artists jumping ship. Now the labels can't claim their valiant battle against piracy is to protect the artists. Perhaps the reason why the artists have been pretty quiet (for the most part) all this time is that they knew they needed to ditch the labels but had to bide their time until they could break away safely.

    One of the saddest parts in all this just as I've said before that the record labels had the golden opportunity to take the lead in digital distribution but instead they fought against it.

    And I agree with comment 4. I can see it now, The RIAA suing Madonna for willfully allowing infringment of their copyrighted music. But it may not be so bad. Imagine Trent Reznor only encouraging fans to download his new music that is not under contract with a big label. As long as he only encourages the download of his new stuff then the RIAA should not be able to touch him. But I'm sure the RIAA would change the argument to something to the effect of, "When he encourages fans to download his new music and they start swapping it and the older music which we still hold the copyrights to then Trent and the fans in question are infringing on our copyrights. Now make them pay us. And as a part of the irreparable damages we are seeking compensation for we should be given copyright control over the new music he was encouraging the download of."




    And on side note about irreparable damages. That term implies that someone has suffered damages that cannot be repaired. If that is the case then why sue for ugodly amounts of money?

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