Yes, gentle reader, get your hanky ready. You thought Geeklawyer brutally dumping Ruthie was a tearjerker? well that was trivial compared to the emotional pain of the music industry. It seems that some idiot carelessly broke their business model. Now it seems that they are strapped for cash. Cocaine is no longer available on-tap in the A&R washrooms. Shame.
Tim Clark, formerly Managing Director of Island Records said at the “London Calling” music expo at Earl’s Court:
“Their model is fucked. It is. Physical revenues are going down like nobody’s business and it’s cataclysmic…”
Jeff Kwatinetz, CEO of management company the Firm was less reserved:
“They left billions and billions of dollars on the table by suing Napster — that was the moment that the labels killed themselves,”
What is the lesson? It’s hard to be smug - fundamental core shifts in market structure are really really *really*hard to cope with. They are still harder to deal with if one is an incumbent and somewhat less than lithe of foot. So Geeklawyer feels a little bit of pity for them.
Only a tad however. They shot themselves in the foot, reloaded and shot themselves in the other foot, whilst putting the injured foot in their mouths. Some have still not eschewed DRM and some are still looking to the aid of legislation or litigation. In many situations these are fine solutions if you don’t care about the underlying issues or the market structure and if you can ignore overarching gambits: e.g. the Internet. Here however one may just as well stick ones finger in a dyke (um, no … ) and hope for the best.
The interesting and perplexing thing is to know how the market develops after that. It seems that record companies are now seeking to take a slice of touring revenues. The business logic for this is obvious if a tad twisted. Geeklawyer was talking to a couple of musicians this afternoon who asserted that touring was unprofitable and merely a promo for the album. If the assertion be true that bands need to prepare for fuckloads more live gigs to make a living then this may make sense. So long as, unlike Elton John, they charge sensible prices for their gig tickets.
This is in someways the most interesting issue. So long as young musicians strive to exercise their art as an act of self-expression and their are people willing to listen the capacity for a vibrant industry exists. Te broader question is whether or how this art can be monetized. Geeklawyer feels that his faith in free markets will be justified and that ’something’ will arise.
We are, in the words of Churchill, at the end of the beginning. Geeklawyer has no firm idea of how things will develop.
That phrase...
[…] illegal says Techdirt, and in the UK music industry figures admit their business model is doomed, Geeklawyer sympathises, a little […]
Hopefully this will see more de-centralization within the music industry and less of a manufacturing and marketing of bands. Companies will have less control over distribution which we are already seeing.
Unfortunately I suspect that music revenue will be tied in even more heavily with advertising, mobile phone ring tones etc.. and branding campaigns for new products and life-style companies such as virgin active. I’m sure as well speak companies are paying bands to have their music blurting out of their second-life shopping centers.