Billboard reports that David Byrne “Asks Labels For Help….” His speech at the SXSW conference mirrors my thoughts exactly.
Former Talking Heads frontman David Byrne called on record labels to remove DRM on digital files and shift from manufacturing and distribution companies to more closely resemble marketing firms 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, today (March 15). Byrne offered a slide show that predicted digital sales would outstrip CD sales by 2012. He said 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. He said the idea of artists working completely independent of a record label is possible, and pointed to the success of 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.
But Byrne seemed to imply that labels are not changing as rapidly as they need to be. He pointed to the royalties artists receive on each CD sale, and put the number at about $1.60. He said the royalty rate is essentially the same with an iTunes sale. “There’s no manufacturing or distribution costs,” Byrne said, “but somehow the artist ended up with the exact same amount.”
While conceding the marketing costs in the digital era won’t be cheap, Byrne noted that sites like YouTube offer more possibilities to artists than MTV. He called up a YouTube video of a man standing in a cavern. “Nobody is telling you have to make a million dollar video,” Byrne said. “You can make it like this guy — stand in a dangerous place and everyone will watch.”
But first, he said, labels will have to remove DRM. He said he purchases most of his music online via eMusic, or obtains it illegally, due to the file constraints on files sold on iTunes. Byrne predicated that once DRM is removed, iTunes will no longer “have a monopoly,” and labels will be better prepared to deal with Web sales.
An audience member suggested that such an idea was depressing, largely due to the decreased sound quality of a digital download. “It’s kind of sad,” Byrne said, “but I think of it as a boost for live music. As long as it doesn’t get to be too horrible — the sound quality — they’ll go for convenience and accessibility. He added, “It doesn’t have to sound good to move people.”
Tags: music entertainment podcast downloads mp3 social networking Pampelmoose Gang of Four sxsw
How come servers and bandwidth don’t count as “manufacturing or distribution costs”?
March 18th, 2007 at 11:45 amWell there’s a distinction – manufacturing and distribution in the music world means moving a hard good around the nation or the globe. Those costs are invariably fixed, the cd has to be pressed, the sleeve printed, the jewel case or digipak created and then the completed package has to be transported here there and everywhere. Server space as far as the Moose is concerned, is rented. We buy a certain amount of bandwidth each month for a fixed costs. We then include our download traffic in that bandwidth as far as accounting for the cost to us. It’s really cheap to deliver the albums this way. We watch our traffic and we control our costs. One plus as well is that an album sold via download is a final sale unlike in retail store distribution where a sale is not final, they can be returned at anytime to the label. And of course the download doesn’t end up in a landfill nor does it use as much energy to be delivered comapred to a hard good.
March 18th, 2007 at 4:15 pmI’m looking at some of my vinyl right now and there is a distinct advantage in the artwork—the large glossy pics (unfolded and high res) and cool (large) booklets. the singing nun LP has color sketches and beautiful lyrics. broadway musical LPs always have cool pics. so I can’t cry for CD and it’s coming death—it’s not a pretty format graphically and jewel cases from the spice girls alone could fill god knows how many landfills.
with digital files it’s obvious that artwork will likely be replaced by animation and images and other goodies, employing lots or really nice graphic designers and making some kids seizure. rock and roll.
March 18th, 2007 at 7:57 pm[...] Of course there is always a chance that once the element of the Radiohead new, new thing has worn off we will still be stuck debating what the future of music holds. Silicon Alley is suggesting that at retail things could get very bleak in 2008. They are saying that they’ve heard Walmart, Target and Best Buy will scale back heavily on the amount of sq ft they give over to CDs. Apparently the numbers being thrown around are in the 20% – 40% range. Everyone’s conclusion is the CD market is in permanent decline. And as Silicon Alley suggests, a cutback sets off a self-fulfilling prophecy: Retailers stock less music, so consumers have less to choose from, and then buy even less, causing retailers to stock even less. Of course this debate concerns only physical retail sales offline when someone says that customers “will buy even less.” Online the debate is different; given the opportunity that iTunes and the new Amazon download service bring, not to mention how much cool new music can be found in music blogs such as the Moose and 3Hive (and if you’re on a Mac then Peel is your best friend – it does it all for you.) At SXSW 2007 David Byrne made a prediction that – “digital sales would outstrip CD sales by 2012. He said 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.” I am offering up late 2010 as the new tipping point. [...]
November 13th, 2007 at 11:18 pm[...] I can only be honest with her; CDs will last a lot longer than most people (myself included) would like to admit, there are still a majority of folks out there who purchase CDs and digital sales are not covering the slide downward in music sales – I do agree with David Byrne though, the tipping point will be reached very soon and CD sales will slide more quickly as more people buy music as downloads. I had to quickly craft some sound bites, here they are – ‘People have access via the Internet to more music than ever and are buying more music, it’s just one song at a time unfortunately.’ ‘The music industry failed to give people what they wanted – easy and cheap access to single songs online, available for download without restrictive DRM.’ ‘Artists will continue to create, people will buy their music, the middleman has now been cut out.’ ‘Guy Hands says that he wants to have EMI Records be a more creative company. Considering that EMI’s roster is made up of 100% ‘creative people’ that’s an interesting statement.’ And so on. She got back to me, she was very happy. Job done. [...]
January 16th, 2008 at 9:53 pmBecause of the compression, Cd’s sucked, always did.My suggestion is to think outside of the box. When transistor radio came into being they provided cheap and portable ways of hearing music. A revolution in music both artistically as well as sonically happened at that time with multi tracking and the wide spread acceptance of “Hi-Fi”. Cheap mp3′s are the am radio of today. I say to hell with 16bit 44k technology that is over 30 years old. Let us embrace SACD. Better yet calling all artists! Wrap your brains around HD/Blu-Ray as the new cutting edge . Non compressed studio quality, multi channel surround, AND video. Imagine if Sgt. Pepper had the opportunity to be presented in such formats. The sky is the limit, if we creativity embrace what is now!
January 27th, 2008 at 1:43 ammakes me wonder who controls the evolution of mp3 technology? anyone?
January 27th, 2008 at 10:08 pm@Mark,
SACD seemed to not take off for some reason…was it price? lack of good content? There’s more thoughts on this at this thread… http://www.pampelmoose.com/mspeaks/?p=1251
January 28th, 2008 at 9:03 am[...] Records The End of the CD and CD Retailers Puddlegum – Top 5 Reasons Why Vinyl Will Outlive CDs David Byrne Tells The Record Labels to Embrace The MP3 How Killing the CD Single Killed the Recording Industry How Bands Can Make More Money By Not [...]
April 1st, 2009 at 2:33 pm[...] changer. The labels blinked. Some musicians learned to use the web well and at SXSW in March 2007 David Byrne warned record labels that they must act very quickly and adapt much faster to the web’s promise. He predicted that [...]
February 15th, 2010 at 10:59 am