Also hints that record companies should get a cut of concerts, merchandising, sponsorship, song-writing, etc to make up for declining revenue in other areas.
Max Hole, President, Asia Pacific Region and Executive Vice-President, Marketing and A&R for Universal Music Group International recently gave his insight as to what he sees for the future of record companies.
He provides some rather interesting observations in that he firmly feels that the artist and record label relationship is essentially unchanged despite the fact that the music distribution model has.
But, what’s curious though is the real message at the heart of what he says, in that he’s sort of hinting that record labels are now, or will be, little more than marketing and promotional outfits. He doesn’t say it outright but, he says things like they can “…help (artists) realize their potential with expertise in A&R, promotion, marketing, sales, and they provide money,” and that many artists don’t want to hassle with the “…business and promotion/marketing themselves.”
He feels that artists just want to play music and write songs, and that a partnership with a record label lets them do that by supporting them financially while they do so. Yet, does this really justify an artist receiving only $1.99 USD of a $16.98 CD price? Is the financial and marketing support worth almost 90% of each CD they finally sell?
The real kicker is that he seems to think 90% isn’t enough in light of the decline in physical CD sales, that record companies must be able to tap into the artists REAL sources of revenue like concerts, merchandising, sponsorship, song-writing etc..
He writes:
Up to now, record companies have provided most of the financial investment to break an artist but have not shared in the revenue created from concerts, merchandising, sponsorship, song-writing etc. once success is achieved. The record company’s piece of the pie is declining whereas all the other segments are growing so we need to adapt.
I like how he mentions the word “adapt,” which he follows up later by noting that they need to be “…open minded, flexible and unafraid to experiment.” Do any of these characteristics strike you as being observable traits of the music industry? Probably not, though EMI has stepped up to the plate somewhat by offering DRM-free tracks on iTunes new “iTunes Plus” DRM-free music store.
In any event, it amazes me still at the hubris record execs have in trying to say with a straight face that artists need them, especially when it boils down to mortgaging their future with cuts of CD sales, and perhaps even concerts, merchandising, and other revenue sources in exchange for slick ads and a few dollars in their pocket so they don’t have to have day jobs.
For some artists it may just be the thing they need or are looking for but, at the risk of having the record labels hands in their pockets for years to come, I’d hope they’d reconsider.
I think record labels need artists a whole lot more than artists need them.
digg_url = ‘http://digg.com/music/Universal_exec_says_music_artists_need_us’;
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I don't need them. I have a nice website with all my music available for a free download. I'm not very popular. The last time I counted I had over 50000 downloads and I was getting about 1000 downloads a month. If just 10% of those people who listened to my music kept it on their hard drive that's 5000 copies of my songs out there. Not bad for a budget of less than $20 a month.
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