Times they are a changin….

October 11, 2007

First Radiohead, then Nine Inch Nails, then Oasis and Jamiroquai, now Madonna are all ditching their record labels. Some are going it alone, some like Madonna are signing a $120M deal with concert promotion companies. 

It’s officially here- like "The Big One" threatening to fracture California, seismic events in digital media over the past seven years have accelerated the rate at which the industry has sunk into the abyss. In 20 years, I suspect all record labels will look like concert promoters and boutique firms focused on audience creation a retention through marketing instead of distribution.

TechMeme’s Duncan Riley notes, "Madonna may well be the tipping point from where we will now see a flood of recording artists dumping record labels and where todays model will shortly become a footnote in Wikipedia."

My colleague Don Dodge, notes from his work with Napster, "Back in my Napster days there were several big name artists interested in working with Napster to sell their music directly to customers. …Those artists who wanted to work with Napster were still under contract to the big labels. As soon as their contract expired they wanted to go direct with Napster and sell their music for $1 per song…a lot better that $1 per CD. Madonna, Green Day, Limp Bizkit, MC Hammer, Courtney Love, and several other artists talked to Napster about doing a distribution deal."

 

Without a doubt. Loved or hated, Madonna is once again blazing a new trail and I’d expect we’ll start seeing other big defections. Somewhere, someone is working on a leaderboard with contract expiration dates for major artists and odds of them breaking with their labels.  This should serve as a warning to other industries- adapt to the digital age or whither. 

3 responses to Times they are a changin….

  1. 

    I’d like to agree with the assessment, but smaller independent groups would never be able to negotiate big, multi-million dollar concert contracts. Most likely they’ll be limited to playing small venues and only earning revenue on selling CDs at shows, by performance, and/or online through the $1 per track model (not a very rosie picture). The great thing about record labels is that they *discover and promote* talent on their labels (i.e. get their music played on radio stations, have their videos broadcasted, setup on-air television appearances, and coordinate magazine interviews to name a few), which is extremely difficult to do on your own (unless you consider getting on My Space trumps all that). Of course, once you get the name cache, it’s a different story. Maybe record labels should become exclusive promotion agents?

  2. 

    Alex,
    I hear you there, but many of these artists are already working with "boutique" event promoters and could easily move up to "big league" promoters that handle concerts, appearances, and radio play without ever entering the record labels. My cousin was in a popular band that received nationwide radio airplay doing just that.

  3. 

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