Defecting from Music1.0 - what Radiohead, Madonna, Prince, The Charlatans, Korn, Jane Sibbery, Ani De Franco and The Eagles have in common

I don't buy a lot of printed newspapers (why... well, you should see the inbox of my google reader ;) but something made me pick up a copy of the International Herald Tribune (IHT) today. The IHT is indeed my favorite international newspaper; with consistently great writing and sharp opinions.

I was delighted to find at least 2 major stories on the music industry in this edition: one on Radiohead and one on Madonna (this was the only cached IHT link I could find, but here are other details). I was happy to see that at least one of them is already available in their entirety (maybe they know a little but something about The End of Control...?) - but where is the Madonna feature I have in my print version?

So what is happening here?

Basically, faster, nimbler, less-control-obsessed and less-conflicted players are doing what the major record labels should have done five years ago: offering partnerships to artists and their managers, real profit (and responsibility) sharing, engaging with artists on all levels, not just on selling copies of plastic (or zeros and ones, for that matter). As the IHT puts it when talking about the Madonna-Live Nation deal: this is a "wide-ranging partnership", not a mid-term 'plantation agreement' (the latter expression is mine, not theirs).

And by and large, major record labels will not be welcome in this game, because:

• they have little expertise in it
• they have none or few people that could run something like this
• by and large, they have a monopolist's mindset (which is not going to work here)
• they have aptly and with great dedication eradicated trust across the board: with the artists, the managers, the producers AND the users
• they don't like deals that create a level playing field

Here are some quotes from the IHT features which I like a lot:

"Radiohead couldn't be in a better position to market itself online, without middlemen. It has a huge and loyal, if contentious, fan base that has sold out arena concerts for more than a decade. Unlike Prince, who chose to go independent at a much earlier, slower stage of the Internet, Radiohead can count on broadband access from much of the world."

My comment: indeed. If Todd Rundgren and Prince would have had broadband-enabled fans instead of a dial-up crowd it would been all over for the major labels a few years ago.

"...Radiohead records and tours on its own budget and timetable, plays new songs before they're recorded, lets listeners hear its music with a click or two and sustains itself primarily through performing and direct sales"

My comment: I like that thought, too, yet I think they will indeed need very strong managers, smart advisers, hot branding teams, and cutting-edge service providers to make this work because large financial success is still a question of SCALE. That is, of course, what the major labels have indeed provided and maybe that is what they can provide in the future? But now, guess what, there are hundreds of companies gearing up to provide just that: scale, and access to very large audiences. Another tough reality check for the majors - as far access to large numbers of people goes, they will be competing with the likes of myspace, youtube, google, facebook, AOL, Yahoo etc, and a gazillion of startups such as Kyte, Blip.tv, iLike, Jamendo, Reverbnation, Sonific (woho knows;) etc.

"Historically, middlemen are expensive. Under typical major-label contracts, musicians have paid handsomely for market access. The luckiest ones receive perhaps 15 percent of what their albums earn after a label's expenses are recouped - as opposed to the 100 percent of revenues that Radiohead is getting from "In Rainbows" online...."

I think these, below are the driving factors behind all of this:

Techcrunch also has a good feature on this issue (gotta love their style!)

Comments

[Vergel Evans]

In 1999 David Bowie launched his fansite and dropped off the mainstream radar. Price did the same around that time as well... I figured they were the future of the music industry and it's taken 7 years for the rest of the mainstream artists to catch up.

If you're not into these artists... they don't even register in the press. But if you're a fan, they've got a whole universe of websites and small fan based events to participate in.

Peter Gabriel is another artist who should get some much deserved attention for leading teh charge on developing his own subculture.

[Ron]

It's great, because it finally means real power for the artists and real relationships with the fans, and maybe (just maybe) it'll make the major labels take chances on something new and different for a change.

[Joe Bennett]

Radiohead and NIN are two more fascinating examples of artists from 'Music Industry 1.0' leaving behind the record labels to go independent. But these global artists were signed, sold shedloads of pieces of plastic, developed a huge fan base using the investment of those labels, and THEN declared their 'independence' when the web came along.
It's naive, I suggest, to herald Radiohead and NIN as 'the future' because what they are doing is not driving the transition - it is a symptom of it.
I hope Greg begins to focus his attention on the start of new artists' careers, and quotes examples of artists who have NEVER been signed to a record label.
Can anyone show me any globally successful artist who is truly independent and has *launched* their career on the 'net? (I'm assuming no-one's going to quote the made-up press releases about Sandi Thom, the Arctic Monkeys and Lily Allen - all of them 'rags to riches' hoaxes set up to conceal the investment behind the bands).

It's true that we are witnessing 'The End Of Control' and I don't disagree with many of Greg's observations about potential changes in consumer behaviour. But all this user-generated content of unknown artists is, for the most part, creating a quagmire of below-average music that the typical music fan won't devote their valuable 'mouse-attention' to.

Greg's demonising of 'jackass record labels' as faceless corporate suits is an intoxicating idea - much like the tendency of the young to embrace socialism ;-) - but bear in mind that the labels (majors or indie-majors) brought us Madonna, The Eagles, U2, The Beatles, Elvis... (insert your own favourite globally successful artist here). And speaking as a musician, songwriter and music teacher, I don't hear anything any better coming out of myspace yet...

[Joe Bennett]

Addendum - sorry for consistently mistyping your first name, Gerd!

[Gerd Leonhard (blog Owner)]

Joe - you have some good points here, and I shall address them in a new post, soon. Still, I don't think that the logic is correct here - there is no way to unbundle what is the 'new' and 'old' way of doing things here -- they are completely overlapping here.

Also, be sure to read my new book chapters at www.endofcontrol.com -- and thanks for the comments.

[JEFF]

It's funny that I wrote about this exact same subject just last night.

http://www.tuneshout.com/blog/view/38

I love what Radiohead did, but as you put so eloquently, it is a question of scale. I'd love to see bands around the world not need a record label and release their music to their fans themselves. Problem is, the infrastructure doesn't really exist yet to allow up and coming bands the ability to do self-release their music on a large scale. They need servers, technology, managers and promoters.

It's coming up - there are websites and companies being created now to allow just that - but they're not there yet.

[Adam W]

So, hypothetically, this new unknown band called Headradio post up their debut album "Pablo Jam" in October 2007 and allow fans to download it for whatever price they see fit. Like every other man and his dog, Headradio have a MySpace page, plus presence on LastFM, etc, etc, etc.

Q: Does this band go on to build a career and make groundbreaking albums called OK Computer and Kid A, reaching an audience of millions in the process?

A: Errr, no. Because the vast majority of us live in a world that is both offline and online. And bands need millions behind them to hit big. And most likely always will do.

Apologies for the fly in the ointment, but Radiohead will be signing another major deal in the very near future.

[Gerd Leonhard]

Adam, totally agree with you: what Radiohead did worked because they are ALREADY known and have a following. The big question is, how does a NEW artist do this? Partly, I think the answer is that 1000s of new artists WILL do this but they won't be 'hit' artists that we will even know about, and therefore this comparison is apples & oranges. I think that 'charts' as such will be meaningless pretty soon, and success will be measured in 'clicks per niche' - i.e. how important is an artist in the precise niche he / she is in. Part of the big challenge is that we must stop looking for huge HITS, anyway -- that is only a commercial logic that was dished up by the large record companies since that was their way to tap into huge profits, quickly. The Future is, imho, 100s of 1000s of artists going direct to market, with 1000s of good managers, artists and service companies providing the support. And also: when cars came about we did not always make comparisons with horse buggies, either --- we just looked at this as a whole new thing. My 2 cents.

[David]

I just wrote an article similar to yours. Check it out.

[David]

I just wrote an article simliar to yours. Check it out:
http://www.nextgreatthing.com/2007/10/22/artists-create-new-music-revenue-models/

[zab]

Now Charles Manson is pulling a Radiohead. You can find all the details with google.