Searching for Salvation
In the face of insurmountable odds I feel a competition is in order.
Here’s a pretty telling graph – Recorded music sales over time since 1999. This is the truth.
If you are trying to make money selling recordings, or producing them you are selling into a market that is auguring into the earth. If you are a pure-play label – either cash out soon and go home before it’s really too late, or start writing a new business plan. It is time for you to start over.
If you really want to do 360 deals, then get the capacity, personnel and expertise to actually produce results or you are toast. Todays nimble entrepreneurs and emerging music service environment is going to eat your lunch. Specialization is in, generalization is out.
If you are a record producer or engineer, create other products to produce. Broaden your horizons. What are you going to be a producer of? What “insanely great” product can you create?
If you think you can survive in the recorded music business, find something else to sell. Simple as that. There is no recovery from this decline. Sure songwriters and publishers can still make money licensing for film, TV and new media (like ring tones), but the engine that has driven the music business for the past 60 years has run out of steam.
Recorded music as a propellant into prosperity is no longer viable.
Accept this fact, move on and adapt. Use this as a jumping off point. Reinvent yourself or your business.
This has been my mantra for the past 6 or 7 years. If this RIAA graph above is not evidence enough, then I don’t know what is. If you think being signed by a “record label” is your ticket to ride, then nice to have known you. Enough already. I can’t believe how many people still want this. American Idol?
And if you are the RIAA, and think trying to preserve recorded music as a “business” is a sound investment, I would advise you look for another job, and soon. Gaming Soundscan to count T-Shirts as a way of propping up the numbers and thinking everything is ok is self deception. Look around you.
This is the truth people. Recorded music sales are going to end as a viable business driver ’cause it is just not working anymore and is an outmoded concept of what music was all about. “Digital” tracks are not going to cut it as they have been conceived thus far because it is just the same thing in a different form. Fixing music in time makes no more sense. Music is more fluid than ever. Subscription revenue and streaming licenses are not going to support anyone when they are optional. We need something new, something bold.
With this as a background I created Music Power Network. To help people discover the future of music for themselves, and create a plan to take their careers forward.
We have to dig deep here. This is a time to be honest with ourselves. What is your music career all about anyway? How are you going to survive? What are your goals and your dreams? How do you define success? You can’t eat passion and you can’t spend perseverance. What is your business plan? What is your marketing plan? We need some new ideas. What are you going to do?
It is too easy to say that a 360 model is the way to go. 360 for who? You or the “label”? What do you really need? Who is actually going to provide the services required? What does the team look like? Where is the value, talent and capital going to come from? Who is going to back your vision?
Think you have it figured out?
I am going to put together a team of people to search for the best new music business plans for musicians, songwriters and producers. In the coming weeks we will put this competition together and announce it officially at SXSW or sooner. Details will be forthcoming on how to enter, who the judges are and what the prizes will be. I promise you it will be worthwhile and interesting.
So start working on your strategy and your business plans. To be notified when the competition is announced, please click here and enter your email on the bottom of the page.
Please leave comments below on any ideas you have for judges, prizes, people to reach out to, etc.
Dave
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Interesting graph, Dave! I wonder how it looks like if you take it back to Elvis’ times. Wasn’t there a high rise in 1985 – 1999 – because of music being remarketed on CD.
My guess is, the music market – like a lot of other markets will turn more local. People will still want to experience concerts and then buy a record. So support your local bands.
http://www.swivel.com/charts/2293-U-S-Music-Sales-1975-2005-Vinyl-cassettes-and-CDs
I have been trying to explain on TechDirt why there is indeed a future in recorded music. What there is no future in is the sale of copies of recorded music.
It’s important to understand the difference between the talent and labour involved in the production and business of music and its recording, and the production and business of copies thereof.
Record labels certainly commission the production of music and its recording, but what they sell is copies (no longer protected by what is now an ineffective 18th century monopoly).
The new commissioners of music and studio recordings thereof are now the artist’s fans that the artist should now deal with directly. Just as fans commission live performances, so tomorrow they will commission studio performances and the recordings thereof. Unlike labels who need to sell copies, the fans simply want the recording and have no need to profit from the sale of copies.
Crosbie,
When you record a song, there is only ONE master recording. ONE.
Every thing else is a copy.
Anyway, you are ignoring the entire issue of supply and demand. The Internet has revealed the true amount of HUGE talent out there today making innovative, superb music. The tools are affordable, and these talented people are making an avalanche of great music.
An avalanche! Not to mention the entire catalog of great music going back to the dawn of recorded music…soon to be available on any Internet-enabled device, anywhere.
So…people don’t *need* to commission anything to get their fill of wonderful music. You have to take that into account in your theory. It matters. It’s critical to understanding where this is all going.
Think about it. Listeners will be well-satisfied with the avalanche of all kinds of great music in all kinds of genres. Most all of it for a nominal monthly fee for unlimited streaming.
Why would they need to pay someone to commission a work?
“It’s only after you’ve lost everything,” Tyler says, “that you’re free to do anything.” ~Chuck Palahniuk, Fight Club, Chapter 8
Goodbye music business, long live music!
Glenn, there are often artists whose music stands out in ones ears as particularly special, particularly delicious. One needs a way of satisfying this craving, of getting another fix, of commissioning the artist to produce more, to record more, to publish more.
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I don’t know entirely if I agree that recorded music is dead.. I think what’s dead is the old business models. I also think there’s a lot gong in in the evolution of the kind of technological ecology.. of like.. how people find new music, filters, financing, and whatever.. that needs to happen.. and once it does, the picture will shift a bit more.
I remember many years ago.. social media.. particularly bloggers and podcasters.. there was this whole conversation about “how do we monetize this stuff” and while its still an issue for many, a lot of people have kind of worked it out.. I think the issue for recorded music might be the same kind of deal.
A lot of it seems sorta obvious to me.. “a band” is a brand.. the brand must make some sorta product or service.. you must be able to make more money then it costs to operate.. you must work on building your brand, and making great products and services.
I’m not sure about the specialization.. well, maybe I’m not arguing.. but I think musicians, producers, engineers, label folks.. have to rethink what there specialization is.. I think they key is being open to a lot of experimentation.. try lots of stuff and measure your success.. see what works, or works in what way, what doesn’t.. drop what doesn’t, do more of what works.. but keep experimenting.
I think music has to be made for cheap, unless its a loss leader for some other area where you make more.
In any event there’s a kind of 101 of what I think you need to do that I don’t see being done well. The design of artist’s websites.. the thinking through of what the business objectives ought to be for those websites.. I think a Flash branding experience is great, but that’s no excuse to forget about the rest of the strategic concerns or not have something that works on iPhone’s when people are out and about and are thinking they might want to go to a show and can’t see if you’re playing wherever cause your Flash site doesn’t employ progressive enhancement… and it doesn’t help if it doesn’t have the SEO so no one can find you.. and you might have wanted to think about those sales funnels.. and your news letter stuff ought to have other ability to do fine grained segmentation and get stats on what was opened and what wasn’t.. so you can fine tune that..
What I think is obvious is that any artist needs to build a team around him.. you need people who understand the online channels.. the social media blah blah blah.. as well as traditional media publicity and marketing and whatever.. you need people who understand the music business.. etc
The reality is that promotion on the internet can be cheap, as can the production of music..
Innovation comes from synthesizing disparate stuff.. so I think a couple things.. #1 It maybe that business models.. what works for one person might not work for the next.. You really need to triangulate your passions, kills, and the market.. to work out where you need to be. #2 You need to look out side of the music business for idea about business models.. take from whatever, synthesize whatever.. You just can’t expect the off the shelf ideas to work.
A lot of stuff needs to be rethought.. and I think the music industry’s resistance to change is a big part of the problem, but that it is one of the industries suffering the most.. when we get through this.. we maybe ahead of everyone else.
Finally, we are living in revolutionary times.. and there are incredible opportunities to be made and found.. but you kinda need to think like a revolutionary to make that work.
[...] follows is my reaction to a post by David Kusek entitled Searching for Salvation on the subject of the future of recorded musi…. He’s running a contest for new business models.. I wrote this in the comment section of [...]
Recordings have been reduced to promotional giveaways, like refrigerator magenets. It is the law of supply and demand, as someone said above. The recorded music supply being huge and freely available, it’s no surprise that there’s a glut.
Merchandise, hand to hand sales, is the future. People will buy a t-shirt or a CD FROM THE ARTIST, but no longer through the old avenues. Live music + merch. You can make a living if you have solid stuff.
Think micro-economies.
You are right. There is no denying the declining numbers of recorded music. Here is how I feel on the subject. Recording technology has become so cheap and so accessible by so many that now just about anybody can record an album. Because of this, there is a huge amount of music available out there and one can simply not afford everything that they want. I think this is why a lot of people download illegally. There is so much music out there to be experienced and with very high CD prices and still high digital prices, they just can’t afford to buy everything they want. With that said, I think a lot of peoples thought process is “well, it’s not really a lost sale because I wouldn’t have bought it anyway.” I’m not saying its wrong or right, I just think that is what’s going on.
As far as a band marketing themselves in this time of declining music sales, they need to look elsewhere from the music. This may mean that they (yes, I’m going to say it) give their precious music away for free. They can do that to get themselves out there and heavily market their tours and merchandise. If they can successfully market a tour and start to gain a loyal fan base, then they might be able to start thinking about making money off their recorded music. Until then, it just isn’t going to happen.
As music sales tumble, and continue to do so, creativity is crucial. I advise industry professionals to “re-think” the entirety of the music business. While technology has allowed for music piracy to enter levels of great extremity, it can also be used in a way to gain advantage–if creative minds find ways around the industry’s major burdens. I agree that new business models are in desperate need. As you said, “we need something new, something bold.”
All of you people thinking live music will save the industry are in denial. The only people making real money are the old bands/artists built into superstars by the old model. And they are the ones who can give away their stuff for free because they make so much money touring.
For 95% of indie bands, touring is a money losing disaster. Pay for play is getting ridiculous, there are too many bands and less people wanting to see bands they don’t know about… They prefer to stay home playing videogames or movies.
Bob,
I would love to hear some of your suggestions then since you don’t think anybody else’s ideas will work.
Wow, this was an enlightening article and insightful comments. Got me thinking about my own career in the business. Creativity built this business, and thinking creatively can keep our careers solvent. For me, I have to be passionate about what im doing, making a living, and my career must have a meaning. As a songwriter, no longer can I expect album sales or downloads to generate a substantial income, so I have to look at where songs are used, and where songs can still make money. Music licensing is growing. And the songs that tug at the heart will always move a fan closer. Currently, there are too many songs that don’t mean much anymore. I’m a believer that each song has a place. We as creators are devaluing ourselves and our material.
It’s a perfect storm of: technology-assisted music production making it as easy as dragging and dropping loops in Garageband, coupled with audiences being quite happy with simple music that only has a beat and an “attitude”.
You can make that on a laptop relatively easily. And look at where we now are.
If people would only buy music that is exceptionally moving and difficult to produce, then artists who can generate such music could charge more and make a good living.
And I think Bob is correct: playing live music (which is primarily in bars) is not going to fix things. Bars only want a certain kind of music, to liven things up and sell drinks and food.
From waht I understand, bands are now even paying the owners to let them play! Too many bands, not enough audience for them all. And that’s what you get. Pay to Play.
青岛卓众（www.chinajoyzone.com）给博主拜年来了，恭祝新的一年事事顺心，万事如意。
It would be interesting in how Forrester accumulated the statistics to create that graph. The RIAA is notorious with playing with the numbers to make things look worse than they are. However, we can probably all agree than music sales are probably down. But, that doesn’t mean that there’s no place left for recorded music sales.
There’s just not enough room left in the potential profits for the vast overheads, milking and gouging that the record companies have done to the buyers of music (along with screwing the musicians).
Your Music Power Network seems interesting, but the details seem a little light.
Dave, I have an idea. been treeking it ever since I took your berklee class back in ’04. bought the book “future of music” and watched the prophecy happen as I traveled back and forth to japan, s. korea and the US. And I came up with a plan to tie in my music with games, import car culture, real estate, and fashion that is bannanas. just need a couple more tweeks and i’ve started build my team. would love to share it with you. maybe evening get the thing funded somehow. but the whole has me in the center. very 360 if you know what I mean.
Devarian
Great to hear from you and yeah, lets talk. This is the exact type of project(s) that I am looking for. I will send you an email. Dave
I am just wondering from the graph if/how that takes into account the decline in the price of recorded music (I could be mistaken). CD prices in 1999 are relatively higher than they are in 2010, and in 1999 not many people were buying music digitally (often getting it for free as I recall in college then).
Is it that the more indie, DIY, middle class musician–whatever you want to call them has begun to bring down the price of recorded music? It’s supply and demand. The supply of music has increased due to technology, lowering prices (and the cost of producing/recording music). Demand has increased as well, but there are more markets now to hear music for free. Sorry I was an economics major in college.
Does this mean our super star musicians are going to have to accept less revenue? It was a world of rich and poor musicians not long ago with nothing in between. Are we headed for an evening out in what all musicians make from music?
I guess another way of putting it is there is greater access into the music market as a musician, which drives competition, and therefore lowers the price of music to the consumer.
Brian Franke
Singer/Songwriter
http://www.brianfranke.com
@bfrankemusic (Twitter)
[...] Recorded sales over time since 1999 (source: Future of Music) [...]
[...] oltre metà del suo valore, passando dai 15 miliardi di dollari del 1999 ai 6 del 2009. Dave Kusek, nel commentarlo, è perentorio: non c’è ripresa da questo declino. Ed è un’ammissione bruciante da un [...]
From my own perspective , I can say the decline is also due to the Quality of music, I haven’t bought a cd in years, the type of music the record is presenting is not diverse enough,there is no talent either and they are too obsessed with quick money , no investment. It is beneficial now for the artist to be free to do what they want and target their own market.
[...] nel cuore dell’industria musicale, che si è polverizzata come un vampiro a mezzogiorno (necrologio di Dave Kusek). Un caso da manuale della distruzione creativa profetizzata da Joseph [...]
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