About six years ago I wrote a music article called The Death of Labels. I was 17 and it wasn’t really that good. But looking back now it surprises me that even then I picked up on the commoditization of music as a budding idea of interest.
Nokia recently launched a series of mobile phones that Come With Music. Released in time for holiday shoppers, the phones are targetted at parents who worry that their kids might be downloading music illegally.
The fee, for a year’s subscription to Nokia’s all-you-can-eat music service, is worked into the price of the handset. After the year is up the user can choose to renew their subscription or buy a new handset.
The Economist’s Business View column (from the Oct 4th-10th International Issue), discussed the merits of this new model for music distribution.
As they put it, this is meant “to reconcile the demands of teenagers, who think music should be free, with those of record companies, which want to make money.”
To pull this off Nokia’s taking a loss on the cost of running the music service, paying more in royalties than they can make back in fees.
The mobile phone manufacturer is hoping that after the first year is up a teenage owner will decide to buy a new phone instead of just renewing his/her subscription, since “teenagers like to be seen with the latest model,” according to Elizabeth Schimel, the head of Nokia’s music business.
When did it become alright for a business model to bank on overspending. Shouldn’t purveyors count on their service being a value-add while being profitable, particularly with a recession about to hit?
The Economist went on to quote a market researcher who said that over time Nokia may be less willing “to absorb the cost of running the service” and either “labels will have to do with less or mobile operators will have to pitch in.”
My main “qualm with music” is the industry’s inability to adjust to changes in the market. Mainly due to how inflexible labels have been, expecting everyone else to adjust around them.
How many of you scoffed at the notion of labels doing with less? I did, the moment I read that line because I’ve paid attention to the frivolous lawsuits, insanely high royalty fees and the unfair dispatching of take down notices. Not to mention every episode of MTV Cribs.
A major issue for publishing houses in the past year has been their dependence on Apple’s iTunes storefront. Music labels are now scrambling to find a competitor and it’s not because Apple is failing to make them money but because they feel they’ve lost control.
The column pointed out, “at the moment, record labels have to accept Apple’s terms.” Terms mind you that saved their hides when these labels botched online distribution with overpriced subscription-based services at the start of the millennium.
Now here we are again, back to the subscription model, and this time you’re actually looking for retailers/partners who want to take a loss in hawking your product.
A generation of music-lovers already exists who hate the publishing houses enough that ‘music activism’ has become a movement to topple ‘the label’.
The death of the label would really be the end of an era and there are those of us who wouldn’t want the baby thrown out with the bathwater. But with that much murky bathwater in the tub, that baby’s close to drowning anyway.
The zealous pursuit of every royalty fee is read as greed and obscures the positive role the label could play in the industry. The driving force behind a move to the commoditization of music has been the general public’s distaste for the way these labels do business.
As naive as it sounds to say focus on the positive, in my opinion, that’s what today’s labels need to do instead of obsessing over the upper-hand they’ve lost.
The strength of these publishing houses used to be in their distribution links/channels. Technology has however changed that and given independents access to the same storefronts and online warehouses as the ’signed artists’ get.
But the label system, much like the studios of old Hollywood, still has a unique way of uniting talent and creating hype. The focus should be on the quality of product and the nurturing of artists.
Instead of doing the things that make me wanna pirate just to spite you, remind me why I used to like you. It is the educated who choose to pirate music online. People with enough of a disposable income to afford the tech and bandwidth to download — not to mention the savvy to avoid spyware, trojans, viruses and DMCA traps. They don’t mind spending money on Rainbows because they know all of it is going Radiohead’s way and they don’t mind spending the time on an illegal download because they take pleasure in knowing their money won’t go your way.
It is those consumers who you need to win over. That disposable income could once again be your bread and butter. Shut down and outsource the distribution end and refocus your business model on improving A&R and content creation.
Remind us that Aretha wouldn’t have that sound if Atlantic didn’t team her up with Wexler and Ray Charles would never have tapped into his full genius if it hadn’t been for Ahmet Ertegün. Every artist needs nurturing, despite what some modernists say.
So take off that suit, roll up your sleeves and do you…better!