#24804 by Craig Maxim
Sun Mar 09, 2008 12:07 am
Sun Mar 09, 2008 12:07 am
The Major Labels are dying. They have been for awhile. But there are several reasons why they will never disappear completely:
1) Money (They still have it to invest in technology and marketing)
2) Catalogues (They own massive catalogues of music)
In the past, we "needed" them, and that was enough. They could do what they wanted, treat new artists like they wanted. Make their money off the top, while you burned out and were left with nothing. Those days are GONE. The Labels are desperate. They know they screwed up in fighting the digital revolution and now it is too late to recapture that lost ground.
So besides suing customers for thousand of dollars and sometimes tens of thousands, which will make them a little money and send a warning to some, but they surely realize won't make friends or fans of previous customers, they are doing several things...
1) Embracing new technologies (finally) through ringtones and videos on demand, with newer devices coming out that are high bandwidth and can get content almost anywhere.
2) 360 Deals. This is the big one. Basically a "360 deal" or "multiple rights" deal, is the major label realzing they are losing market HUGELY to indies and p2p services, and that what money is left, is in concerts and merchandising, etc... And rather than being the cold hearted business we have all known and loved (cough) they will now be a hands-on artist oriented big brother, paying special attention to the development of their artists.... for a price. That price is what they call "partnering" and critics call "ripping off" artists for a piece of EVERYTHING they generate, whether concert sales, merchandising or anything else. Rather than just making and selling records, they will now sell you as a "brand".
On the positive side, the labels now have a new incentive to work harder for you, and not let your contract just sit in a filing cabinet, because the more money you make, through touring, selling shirts and buttons or whatever, the more money they make.
On the negative side, some critics see this as a last ditched effort, to stay relevant and make real money again, but at the expense of emerging new talent.
To be sure, many artists are going this route. Madonna chose not to re-sign with her label and instead took a 360 deal with "Live Nation" which netted her 120 Million Dollars up front.
Everyone by now, is also familiar with Radiohead's ditching their label, and making news by offering their long awaited album, on a "pay what you think it's worth" initial offering, where consumers paid as little as $1.00 for their entire album or others paying $10.00, $20.00 or even more, depending on their loyalty to the band I suppose. While this is not an example of a 360 deal, it is an example of how marketable and known artists are leaving the majors enmasse, because many established acts don't feel they need them any longer.
Bare Naked Ladies is another band, which, like Radiohead, took their careers back into their own hands. Now, without the huge marketing behind them, and possibly also due to the general decline in record sales, they certainly sold less albums. But they made MORE MONEY. Why? Because with the major label, they received about $2.00 per album for themselves, whereas selling their albums directly to fans through downloading, they now make $6.00 per album. This is a HUGE leap in profit potential, and more and more established artists are recognizing this.
So what do you think about 360 deals?
Good for the Artist?
Good for the Labels?
Good for both?
Learn More About 360 Deals:
http://www.nytimes.com/2007/11/11/arts/music/11leed.html?_r=1&ex=1352523600&en=97e20288b45eb951&ei=5090&partner=rssuserland&emc=rss&oref=slogin
1) Money (They still have it to invest in technology and marketing)
2) Catalogues (They own massive catalogues of music)
In the past, we "needed" them, and that was enough. They could do what they wanted, treat new artists like they wanted. Make their money off the top, while you burned out and were left with nothing. Those days are GONE. The Labels are desperate. They know they screwed up in fighting the digital revolution and now it is too late to recapture that lost ground.
So besides suing customers for thousand of dollars and sometimes tens of thousands, which will make them a little money and send a warning to some, but they surely realize won't make friends or fans of previous customers, they are doing several things...
1) Embracing new technologies (finally) through ringtones and videos on demand, with newer devices coming out that are high bandwidth and can get content almost anywhere.
2) 360 Deals. This is the big one. Basically a "360 deal" or "multiple rights" deal, is the major label realzing they are losing market HUGELY to indies and p2p services, and that what money is left, is in concerts and merchandising, etc... And rather than being the cold hearted business we have all known and loved (cough) they will now be a hands-on artist oriented big brother, paying special attention to the development of their artists.... for a price. That price is what they call "partnering" and critics call "ripping off" artists for a piece of EVERYTHING they generate, whether concert sales, merchandising or anything else. Rather than just making and selling records, they will now sell you as a "brand".
On the positive side, the labels now have a new incentive to work harder for you, and not let your contract just sit in a filing cabinet, because the more money you make, through touring, selling shirts and buttons or whatever, the more money they make.
On the negative side, some critics see this as a last ditched effort, to stay relevant and make real money again, but at the expense of emerging new talent.
To be sure, many artists are going this route. Madonna chose not to re-sign with her label and instead took a 360 deal with "Live Nation" which netted her 120 Million Dollars up front.
Everyone by now, is also familiar with Radiohead's ditching their label, and making news by offering their long awaited album, on a "pay what you think it's worth" initial offering, where consumers paid as little as $1.00 for their entire album or others paying $10.00, $20.00 or even more, depending on their loyalty to the band I suppose. While this is not an example of a 360 deal, it is an example of how marketable and known artists are leaving the majors enmasse, because many established acts don't feel they need them any longer.
Bare Naked Ladies is another band, which, like Radiohead, took their careers back into their own hands. Now, without the huge marketing behind them, and possibly also due to the general decline in record sales, they certainly sold less albums. But they made MORE MONEY. Why? Because with the major label, they received about $2.00 per album for themselves, whereas selling their albums directly to fans through downloading, they now make $6.00 per album. This is a HUGE leap in profit potential, and more and more established artists are recognizing this.
So what do you think about 360 deals?
Good for the Artist?
Good for the Labels?
Good for both?
Learn More About 360 Deals:
http://www.nytimes.com/2007/11/11/arts/music/11leed.html?_r=1&ex=1352523600&en=97e20288b45eb951&ei=5090&partner=rssuserland&emc=rss&oref=slogin
