David Byrne: Who Needs Record Companies?

[saintjohn]

From the New York Times:

AUSTIN, Texas (Billboard) - Former Talking Heads frontman David Byrne wants record labels to focus more on marketing than on manufacturing and distribution in the face of increasing digital album sales.

Byrne gave a presentation entitled "Record Companies: Who Needs Them?'' at the South by Southwest music conference in Austin, Texas, Thursday. He offered a slide show that predicated digital sales would outstrip CD sales by 2012.

That year will be the "tipping point,'' much like the mid-to-late '80s when CDs overtook cassette sales. Once download sales became the norm, Byrne said, it will allow manufacturing and distribution costs to approach zero. "That is a fact,'' he said.

He said at that point, record labels will be faced with a sort of choice -- to ramp up marketing services to use music as a loss leader for tours and merchandise revenue, or aim only for international stars of the ilk of Britney Spears.

"Artists need help,'' said Byrne, who said he's in the final stages of negotiating a new contract with Nonesuch Records, a boutique label owned by Warner Music Group.

He said the idea of artists working completely independently of a record label is possible, and pointed to the success of singer/songwriter Aimee Mann. Yet Byrne noted that such a model won't work for smaller or developing acts, who need a team to provide marketing and tour support.

[michael^heaven]

Originally Posted by saintjohn

He offered a slide show that predicated digital sales would outstrip CD sales by 2012.

So that's what the Mayans were trying to tell us!

[endymion]

Exceptional people who don't need help frequently overestimate the teeming masses who surround them, who do need help.

What is really happening is the commodification of music distribution. Record labels, once the only option, are now one of many options.

In a purely market-based music distribution system (as opposed to the current monopolistic system) record labels will still exist, because most people are not exceptional do-it-all Renaissance men (or women) like David Byrne. Most artists still will need help with production, marketing, and distribution even in the year 2107, and businesses ("record labels") will continue to exist to serve that need.

[saintjohn]

The Winter Music Conference people need to book you for one of their industry panel discussions. It might actually be worth buying a badge again

[endymion]

Originally Posted by saintjohn

The Winter Music Conference people need to book you for one of their industry panel discussions. It might actually be worth buying a badge again

Yeah, the wife and I used to do that but we're too busy with 'real' work now. The actual WMC panels are unfortunately mostly attended by bedroom producers who never convert into clients.

Speculating about the future of media markets after the RIAA and the MPAA have lost control over them is what I spend an awful lot of time on, every single day. David Byrne is absolutey correct that record companies are no longer required, in the same way that Random House is no longer a gatekeeper to getting published now that anybody anywhere can start a blog. But blogs are not going to put Random House out of business. A company that provides assistance to artists is a solid niche that will never evaporate. New technology has led to new options and new business models for companies who serve writers, like Squarespace or Blogger. Those new options crop up as text publishing commodifies and becomes a purely market-driven economy with no gatekeepers.

The question for music really becomes: what will a "record company" in 2107 look like? Already we see new independent labels in 2007 that look absolutely nothing like the labels from 1997. The societal and technological shifts that are going on right now are much more profound than anything that happened during the first dot-com boom, and those changes will result in a much more diverse array of options for artists to draw on for support.

Look for example at CD Baby and Beatport. New options in music distribution for very small-time artists who want to do almost everything themselves. But do you really want to do your own distribution? Do you want to be the guy on the phone with iTunes trying to get your tracks into their database, or do you want to let CD Baby handle it for you while you produce product? It's really hard for one person to find the time to do everything.

Those services are only the tip of the iceberg in terms of what will be possible soon. The classic one-stop-shop that a "record label" provides will always be a service in high demand, but the shape and color and texture of the services that labels provide will change rapidly every month from here on out as the world changes around them.

And also: the whole entire entertainment industry is contracting. If you want to get rich don't go into music in the first place. Even if you're a renaissance man who can do it all, just don't waste your time. Today's music market is for people who love making music as its own reward. The monopolistic practices of the RIAA managed to keep the industry bubble inflated for a few years but now it's bursting for good. The forces that allow new artists to break onto the music scene without the help of the gatekeepers are the same forces that are causing the entire music industry to shrink: efficiency through new technology.

[pod]

This is true, even if you can do all that, do you want to? I'm sure David Byrne is absolutely enthralled by negotiating contracts and so forth.

I can sympathize. Someone told me I know what to do with a camera once, I kind of agree with that. What I loathe is the actual business aspect. For musicians, that's where a record label would come in these days, I guess.

[endymion]

Originally Posted by pod

I can sympathize. Someone told me I know what to do with a camera once, I kind of agree with that. What I loathe is the actual business aspect.

That's exactly how I feel about what I do. I want to do what I do, not run a business. More cognitive load dealing with biz details means less brainpower focused on what I do.

...so I married an intellectual property attorney who actually enjoys Quickbooks.



I'm still amazed by two things:

1) that the RIAA has managed to hold on for as long as it has without more losses, using unmodified scarcity-based business models dating back to the invention of the audio recording, and

2) that the MPAA seems to be wholly unable to learn from the RIAA's mistakes, and is doomed to repeat each and every one of them five years later

[pod]

Heh good solution. I need to clean myself up and marry a Quickbooks loving girl who is willing to represent me. 8)

I can cut my drinking in half if needed.

[endymion]

You need to find a girl who likes to use Quickbooks, who knows how to use Photoshop, and who wants to drink with you.

[pod]

I should put a craigslist ad for that.

She can do quickbooks and rough selections. Final edits and optimizations are up to me .