How A Big Record Label Could Make Itself Useful: Act As The Filter

from the bring-the-audience dept

For a while now, we've been pointing out why there is still a space in the new music landscape for record labels -- but it's just that they need to adapt in significant ways. Last week, we wrote about some of what Warner Brothers Records was working on (even as its parent company seems to be working overtime to kill any goodwill). Now, Ian Rogers, the former GM of Yahoo Music who has written provocative posts about the industry before, has written an open letter to EMI's boss, Guy Hands, with some suggestions on how EMI can save itself as a record label.

Rogers starts out by making the key point: in the past musicians went to record labels to get money, distribution and marketing. However, these days, money is less important thanks to cheaper and cheaper recording tools, distribution help is less important thanks to the internet and even marketing help is less important (again thanks to the internet). Rogers suggests that the first two are basically meaningless to artists now, so all that really matters is if a label can help them market themselves better than they could on their own. And, on that front, he has a simple suggestion: affinity labels. Put together various mini-labels under which similar types of bands are associated. And, include on those labels a few of the "big name" EMI artists. Thus, for all the fans who are fans of some huge artist, by creating these affinity labels, it will help drive the fans of the big name artist to those other bands as well, knowing that they all have a similar sound or musical philosophy.

What Rogers is really pointing out is that thanks to the vast explosion of music available these days, bands don't need help getting "out there" any more -- they need help standing out from the clutter. Fans, on the other side, need a better filter to figure out what's worth listening to, and that's something that an affinity label could stand for. It plays the role of the filter, and allows the major label (like EMI) to leverage its connections with big name bands, to drive additional interest to lesser known bands by associating the names on the same affinity label. It's an idea that makes plenty of sense (in fact, there are a few small independent labels that already live via this concept -- within certain niches, you can find people who will buy nearly every album released on a specific label).

So would EMI go for it? Lucky for Ian (and for EMI), Guy Hands isn't a long-term music industry guy stuck to the old ways. He's a private equity guy who seems to recognize that the industry needs to change -- which has meant pushing back against the RIAA and the IFPI and even hiring a Google guy to run the digital strategy at EMI (though, hopefully, he won't be pigeonholed as "the digital guy").

While I agree with almost all of Ian's post -- there is one thing that I disagree with. I think that a label can certainly help beyond just the marketing -- and that's in managing some of the new business models that are coming out these days. We keep hearing people complain that musicians don't want to manage these new business models, and a smart music label could (and should) be helping on that front as well.

Filed Under: affinity labels, business models, filters, marketing, record labels

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  1. identicon
    Stuart Banks, 12 Jul 2008 @ 6:53pm

    Its a nice idea but...

    I am new to the music business just 4 years. I run a small independent heavy metal/rock label and I don't agree with the assessment regarding record labels. Certainly not by the experience I have had. It has been my experience that bands still want and are looking for good labels to support them and work for/with them. I believe that digital markets are important but they are not necessarily the be all and end all. I have embraced the digital age because it is important and it is growing. Its just right now no-one person or organization has that happy medium that one fits all' business model. I think in reality that's probably the music industry's holy grail, for want of a better expression.
    The real problem is basically illegal downloading killed the cash cow that a lot of the music industry were milking preferring to gorge themselves on making as much money in the now with little or no forethought to the future. The way I see it is the Labels really need to stop thinking about how much money they are loosing in terms of profits and get on with the business of re-structuring in terms of investing in artists for the future instead of short term monetary gains. Dumping artists just because they have not hit a target expectation of sales is one example especially if the artists are selling reasonably well. I mean these days who wouldn't be happy with artists who have 50-60,000 units of first week sales, whereas several years ago that could have got an artists dumped.
    Just because you are on the Internet have a DIY distribution are on My Space or Facebook does NOT transpose to good sales or great publicity You still have to get people to these sites. You are just another voice in the millions that are out there. All shouting out for the same thing. How do you combat someone going straight to a P2P and downloading for nothing rather than go and spend money on buying the product? It seems that no-one seems to agree and the RIAA while trying to do the right thing on behalf of its members is actually doing more harm than good. IP's won't be coerced into policing because that makes them take the burden of responsibility for other people's behaviour even by legislation. All that will result in is creating more costs passed on to other people. The big problem we are all suffering for is because no-one had the common sense to see past the greed of raking in as much money as they could while everything was going great and deal with the real problem of the knee jerk reaction of illegal downloading,by people who all too commonly believe that they are being ripped off by greedy record execs. And until the music industry takes responsibility for lack of dealing with those perceptions whether real or not, it is never going to win back the hearts and minds of its customer base.
    Labels need to develop partnerships with artists and not contracts that nail them down to the Nth degree. I think better education tools and services provided by the Labels for artists and its customers might help. We've lost this generations battle for its dollars We could win the next by getting proactive now otherwise record labels as we know them may end up being forced to playing second fiddle to the hardware industry which is has taken the lead in how and where music is listened to.

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