digital music's future
BusinessWeek is running a pretty good special feature on
Digital Music's Future.
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The Labels Start Turning up the Volume" describes the struggles of the record industry as it tries to develop internet distribution models:
The industry's crisis is also one of identity -- as described in the 16th century by Niccolo Machiavelli in "The Prince." Machiavelli wrote: "Innovation makes enemies of all those who prospered under the old regime. And only lukewarm support is forthcoming from those who would prosper under the new. Their support is indifferent, partly from fear and partly because they are generally incredulous, never really trusting new things unless they have tested them by experience."
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Music Clubs' Newfound Clout" tells how BMG and Columbia house are starting to leverage the mountains of customer data they have:
To that end, in October BMG will launch a new program that expose Club members to new artists. Based on members' past purchases, the Club will bundle a free CD with the regular monthly selection. By successfully targeting customers' tastes, BMG hopes build the club's reputation as a trustworthy source of music recommendations, not to mention selling more music. BMG Music can introduce customers to new artists they might like.
But the last two articles are the most interesting.
"
A Rhapsody in Green for Classic Fare?" tells how classical orchestras, deemed unprofitable by the record industry, have found ways to make money on their own via the internet:
"What gradually happened was that the labels shifted all the risk to the artist," says Philadelphia Orchestra President Joseph Kluger. "Our response is 'We're not going to take it anymore.'" So now, "we're looking to [cut out the] labels -- to find ways to electronically distribute our music." [...]
None of the orchestras receive up-front money for recordings or streaming, but they do get two-thirds of the royalties while Andante keeps one-third. "It's the world upside down. The orchestras feel empowered as they never have before," says Alain Coblence, Andante's CEO.
Saving the best for last, "
So You Want to Be a Rock 'n' Roll Star" describes how independent musicians, unable to get signed by the record industry, have begun to profitably self-promote and distribute online:
Ian's story is typical: Most artists owe their labels up to $1 million for producing and promoting their music, estimates McLeod. They're supposed to pay off that debt with record sales. But 18 out of 19 records fail, and most deals leave artists in debt.
By contrast, artists who sell their work independently usually garner $8 on a CD retailing for $16, instead of $3 or less when they record for a label, estimates Danny Goldberg, chairman and CEO of New York-based independent label Artemis Records, which has produced hits like Who Let The Dogs Out.
The articles are all worth reading -- they're full of interesting ideas and are a change of pace from the usual "RIAA vs Napster" carping over IP and piracy.