Big Music will give up, but not before 2011
This is a translation of Michael Arrington's article on Techcrunch about free music and labels.
This week I had a surprisingly frank conversation over dinner with a person from the management of a large music label, and much of our conversation was about the future of music. I asked the usual questions: “Why are you guys so helpless? Your business is crumbling in front of you, and everything you do - chase short-term profits (lawsuits, gangster extortion of money from venture start-ups, etc.). The long-term consequences are frightening - a whole generation or two of young music lovers do not feel any remorse about openly stealing music. Since most of the streaming online content is now free, it’s hard to understand why downloading or sharing music should be considered a crime. ”
His answer: All this is part of a big plan. Labels fully understand that music that is listened online or downloaded will be free in the future (we argued about it before ). CD sales continue to fall by 20% per year, and this process will stop only when sales reach zero. Nothing can replace this income.
They also understand that the recorded music will not be much more than a kind of promotional material . This means that Internet services, which are now being sued for copyright infringement, will be used in the future as a way for the world to learn about new cool music. Today, these services in one way or another pay for the privilege to distribute music, but in the future labels will pay them. This will be a completely new level of current payment for radio broadcasts by musicians, and there will no longer be talk about the fact that social networks should share promotions with musicians . Money will flow the other way, as it should be.
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By 2013 (perhaps already by 2011), it will make sense for labels to finally reorganize their business models regarding the new reality created by the Internet and file-sharing services. Labels will no longer be tied to revenues only from the sale of records - by this time most or all of the artists will be bound by so-called “360 music contracts” contracts that give the labels a share of virtually all types of income that an artist can receive - fan sites, concerts, souvenirs, advertising revenue, and everything else.
But as long as my interlocutor claims, from a business point of view, the trials of users and services quite make sense. Venture capitalists, through their startups involved in litigation, send hundreds of millions of dollars to label wallets. To some extent, this money will be paid further, although the days of large payments have apparently already passed. Apple still gives a lot of money to the labels for paying users to download music, and sites such as MySpace Music, Imeem, Rhapsody and Last.fm pay large fees for streaming content.
For most industries, holding on to the old ways of earning income until they have completely exhausted themselves is a great way to open wide the doors for competitors with more innovative business models. But the innovator’s dilemma is not necessarily applicable to the music industry. Major labels keep talents under lock and key, and there is no reason to believe that new artists will not fall under one wing of one of the labels.
What this means for consumers of music - do not expect significant changes in the next few years. But over the course of this decade we will see significant changes in how music is spread and consumed. And who knows, maybe in ten years we will all forget about music labels.
This week I had a surprisingly frank conversation over dinner with a person from the management of a large music label, and much of our conversation was about the future of music. I asked the usual questions: “Why are you guys so helpless? Your business is crumbling in front of you, and everything you do - chase short-term profits (lawsuits, gangster extortion of money from venture start-ups, etc.). The long-term consequences are frightening - a whole generation or two of young music lovers do not feel any remorse about openly stealing music. Since most of the streaming online content is now free, it’s hard to understand why downloading or sharing music should be considered a crime. ”
His answer: All this is part of a big plan. Labels fully understand that music that is listened online or downloaded will be free in the future (we argued about it before ). CD sales continue to fall by 20% per year, and this process will stop only when sales reach zero. Nothing can replace this income.
They also understand that the recorded music will not be much more than a kind of promotional material . This means that Internet services, which are now being sued for copyright infringement, will be used in the future as a way for the world to learn about new cool music. Today, these services in one way or another pay for the privilege to distribute music, but in the future labels will pay them. This will be a completely new level of current payment for radio broadcasts by musicians, and there will no longer be talk about the fact that social networks should share promotions with musicians . Money will flow the other way, as it should be.
')
By 2013 (perhaps already by 2011), it will make sense for labels to finally reorganize their business models regarding the new reality created by the Internet and file-sharing services. Labels will no longer be tied to revenues only from the sale of records - by this time most or all of the artists will be bound by so-called “360 music contracts” contracts that give the labels a share of virtually all types of income that an artist can receive - fan sites, concerts, souvenirs, advertising revenue, and everything else.
But as long as my interlocutor claims, from a business point of view, the trials of users and services quite make sense. Venture capitalists, through their startups involved in litigation, send hundreds of millions of dollars to label wallets. To some extent, this money will be paid further, although the days of large payments have apparently already passed. Apple still gives a lot of money to the labels for paying users to download music, and sites such as MySpace Music, Imeem, Rhapsody and Last.fm pay large fees for streaming content.
For most industries, holding on to the old ways of earning income until they have completely exhausted themselves is a great way to open wide the doors for competitors with more innovative business models. But the innovator’s dilemma is not necessarily applicable to the music industry. Major labels keep talents under lock and key, and there is no reason to believe that new artists will not fall under one wing of one of the labels.
What this means for consumers of music - do not expect significant changes in the next few years. But over the course of this decade we will see significant changes in how music is spread and consumed. And who knows, maybe in ten years we will all forget about music labels.
Source: https://habr.com/ru/post/54005/
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