5 ms·

I get the feeling margins have gotten so slim in the music industry (at least for the big labels) that they feel they need to make a big play. Apple, with thei

I get the feeling margins have gotten so slim in the music industry (at least for the big labels) that they feel they need to make a big play. Apple, with their almost iconic relationship with the music industry, seems like the right move to them. What I think they don't realize is at this point (IMO) it's probably going to end up being a fruitless effort. They're competing with empowered independent artists, whom alot of times only have to earn a paycheck to pay themselves, who simply love music and don't care about fame or becoming wealthy from their efforts. Most of them care about making great music and making a modest living doing so.

josteink 11y ago
If the margins are getting slim, it's only because the music industry has gotten so big and bloated compared to the size it naturally should have in a digital landscape. They've always insisted everyone else needs to change and play according to their tune, but I think they may (finally) have realised that the ones who has to change is themselves. And that will have to be a change for something significantly slimmer.
- k-mcgrady 11y ago
  >> "If the margins are getting slim, it's only because the music industry has gotten so big and bloated compared to the size it naturally should have in a digital landscape." The margins got slim because people were able to get music for free. Some still want to pay but they don't want to pay a lot so the industry has to take what it can get and offer streaming.
  - josteink 11y ago
    People don't want to pay much 1. because they're cheap, but also 2. because they realise that digital distribution is a near 0-cost business. The music industry can't pretend it's still offering the same value to artists and customers as it did in the pre-internet age. They haven't adjusted to that, and that's their error.
    - k-mcgrady 11y ago
      The value isn't in the distribution though, it's in the content. I'd be interested to know the cost of distribution in the pre digital age (when economies of scale are factored in obviously). I don't think it would be that high. If you look at iTunes the price of an album is significantly lower than it was on CD 10 years ago. In the UK it's around £10 digital now and before digital would've been £15-20 on a CD.
      - josteink 11y ago
        Pre-digital age distribution: 1. create master-copies. 2. Send master-copies (physically!) to the various printing plants. 3. print as many copies as you think it will be reasonable to sell. 4. hire security to prevent leaks of pre-release albums from the plant 5. send the media through your distribution-network, by trucks, trains, planes and boats to world-wide storage-facilities while waiting for a synchronized world-wide release. 6. send copies to actual brick and mortar stores, who may or may not sell all copies (I can't recall if they have the right to return unsold items.) Remember that all those transports, plants and storage facilities not only cost money to establish, but cost money to keep running too. Unsold media kept in storage is now waste you need to pay to dispose of. And you paid to get it there in the first place. This is a loss-factor you need to factor into all actual sales. Now compare this to the digital age: 1. Create a master-copy. 2. Encode in a format understood by HW decoders commonly found in consumer-devices (i.e. MP3/ACC) 3. Put on a webserver. 4. No distribution-network needed. You're on the internet, remember? 5. Bandwidth costs per sold copy: $0.000000000000000000000000000000001 I'm not an industry insider so I obviously don't know the concrete numbers, but it doesn't take a mastermind to arrive at the conclusion that operating in a pre-digital age was expensive and provided a valuable service. Thus warranting a significant markup. In the internet age none of those services are needed nor wanted. Now they're just a middleman wanting money based on a historical role. They will have to slim down. Significantly.
k-mcgrady 11y ago
>> "They're competing with empowered independent artists, whom alot of times only have to earn a paycheck to pay themselves, who simply love music and don't care about fame or becoming wealthy from their efforts. Most of them care about making great music and making a modest living doing so." Sorry but this is BS. 1. Independent artists are empowered in the way that they can distribute music in so many places online - getting people to listen is another matter. Even if your music is good marketing it by yourself is very, very hard. 2. Even artists who aren't part of a group (I'm thinking DJ's for example) have to pay more than themselves. They don't travel alone and every live musician usually has to pay a sound guy and probably a lighting guy. 3. I think very few musicians care about getting wealthy - they just want to make a living. They want to be able to play and make music 24/7. Even reaching that level is incredibly hard. I can't remember their name but there was a Medium article posted here a while back by a band (quite a well known indie band) who were trying to do just that. They sold out 1,000 seat theatres around the country but the costs of putting on a show caught up with them. Artists need labels. Maybe not in the form we've always known them but they are still very important. I think it's also probably in the interests of artists if one place becomes king in streaming. You can focus your efforts there instead of having to distribute your music on all these streaming services with their own social sides you must also contribute to.
- eveningcoffee 11y ago
  You describe that labels could provide usable service for musicians. Fine, but labels do not work like this. They work rather as investment banks and their income does not come from service fees but from speculative bets in hopes to find few musicians with very high returns. I.e. musicians do not get a product from labels but are themselves a product.
  - k-mcgrady 11y ago
    Think of it like a startup. Until they get to scale musicians make very little money. They therefore need investment. Their investment company (the label) also doubles as a marketing company. How do they get to scale without the label i.e. investors?
  - 11y ago
smhg 11y ago
I tried to keep this as much on-topic as possible: If what you are saying in the last paragraph about the wishes of artists is true, imagine a society with a basic income (which is up for discussion in many countries in Europe - can't speak for other parts of the world). As many aren't paying (enough) for music and (as you say) most artists aren't doing it for the money, it seems like a perfect match? Without dragging in other sectors and other aspects, specifically for music (and maybe other forms of art/entertainment): would that be a better situation? Or are the assumptions simply wrong?
- bane 11y ago
  Most musicians make their money performing, not from recordings. Recordings are seen as a kind of marketing expense, with customer purchases as a demand signal. Basic income also has the side-con of being a generally obviously and trivially terrible idea.
- datashovel 11y ago
  I think it's inevitable that the world economies will eventually realize that everyone needs a basic income. I imagine that will open the possibility for far more artists / musicians to spend their lives making art / music instead of struggling to make ends meet doing menial labor or other things that humans will eventually no longer be responsible for. Will it happen within our lifetimes? My guess is no, but given the trajectory of technology in the modern world I can't see a future without it.
bane 11y ago
It's a shame that major labels lost the plot that their primary function is to act as curators, floating the best of the best to the top and making them available. 90% of everything is crap, and the same is true in the music world. An astonishing number of independent artists aren't very good. Historically, publishers were able to sieve off the top 10% and push them. Even if 90% of that 10% was still considered crap by any one person, in aggregate it was generally better than the 90% it floated on top of. The problem of course became profit maximization over curation and we've ended up with a hit driven industry, and everybody just remakes the hits over and over again. There's also an astonishing number of really great indie artists [2][3], but since labels have lost their curation function they no longer get exposure. So while independent artists have unprecedented access to self-publish, there's no curator anymore and great artists just get lost in the wash. In theory, this function has been "crowd sourced" and facebook shares and likes and youtube views and such kind of fill-in for publishing house's ineptitude. But it ultimately becomes a popularity contest, again returning us to a kind of hit-driven system. I think that good curators find an publish great music, and that in-turn builds and shapes the market, and that in-turn generates money for artists. The best example of this I can think of is the now defunct label "Windham Hill", during the 80s found an exposed a gobsmacking number of unbelievably talented artists. Their sampler albums are considered all-time classics.[4] 1 - http://www.smithsonianmag.com/smart-news/science-proves-pop-music-has-actually-gotten-worse-8173368/?no-ist http://www.smithsonianmag.com/smart-news/science-proves-pop-... 2 - https://www.youtube.com/watch?v=VYv6-5VmNEM https://www.youtube.com/watch?v=VYv6-5VmNEM 3 - https://www.youtube.com/watch?v=xZ1JUxeTg3U https://www.youtube.com/watch?v=xZ1JUxeTg3U 4 - https://www.youtube.com/user/WindhamHillLovers/videos https://www.youtube.com/user/WindhamHillLovers/videos
- datashovel 11y ago
  I think major labels lost the plot as soon as technology allowed them to "manufacture" music superstars as opposed to what they had to do historically, which was to "find" music superstars.

josteink 11y ago

If the margins are getting slim, it's only because the music industry has gotten so big and bloated compared to the size it naturally should have in a digital landscape. They've always insisted everyone else needs to change and play according to their tune, but I think they may (finally) have realised that the ones who has to change is themselves. And that will have to be a change for something significantly slimmer.

k-mcgrady 11y ago
>> "If the margins are getting slim, it's only because the music industry has gotten so big and bloated compared to the size it naturally should have in a digital landscape." The margins got slim because people were able to get music for free. Some still want to pay but they don't want to pay a lot so the industry has to take what it can get and offer streaming.
- josteink 11y ago
  People don't want to pay much 1. because they're cheap, but also 2. because they realise that digital distribution is a near 0-cost business. The music industry can't pretend it's still offering the same value to artists and customers as it did in the pre-internet age. They haven't adjusted to that, and that's their error.
  - k-mcgrady 11y ago
    The value isn't in the distribution though, it's in the content. I'd be interested to know the cost of distribution in the pre digital age (when economies of scale are factored in obviously). I don't think it would be that high. If you look at iTunes the price of an album is significantly lower than it was on CD 10 years ago. In the UK it's around £10 digital now and before digital would've been £15-20 on a CD.
    - josteink 11y ago
      Pre-digital age distribution: 1. create master-copies. 2. Send master-copies (physically!) to the various printing plants. 3. print as many copies as you think it will be reasonable to sell. 4. hire security to prevent leaks of pre-release albums from the plant 5. send the media through your distribution-network, by trucks, trains, planes and boats to world-wide storage-facilities while waiting for a synchronized world-wide release. 6. send copies to actual brick and mortar stores, who may or may not sell all copies (I can't recall if they have the right to return unsold items.) Remember that all those transports, plants and storage facilities not only cost money to establish, but cost money to keep running too. Unsold media kept in storage is now waste you need to pay to dispose of. And you paid to get it there in the first place. This is a loss-factor you need to factor into all actual sales. Now compare this to the digital age: 1. Create a master-copy. 2. Encode in a format understood by HW decoders commonly found in consumer-devices (i.e. MP3/ACC) 3. Put on a webserver. 4. No distribution-network needed. You're on the internet, remember? 5. Bandwidth costs per sold copy: $0.000000000000000000000000000000001 I'm not an industry insider so I obviously don't know the concrete numbers, but it doesn't take a mastermind to arrive at the conclusion that operating in a pre-digital age was expensive and provided a valuable service. Thus warranting a significant markup. In the internet age none of those services are needed nor wanted. Now they're just a middleman wanting money based on a historical role. They will have to slim down. Significantly.

k-mcgrady 11y ago

>> "They're competing with empowered independent artists, whom alot of times only have to earn a paycheck to pay themselves, who simply love music and don't care about fame or becoming wealthy from their efforts. Most of them care about making great music and making a modest living doing so." Sorry but this is BS. 1. Independent artists are empowered in the way that they can distribute music in so many places online - getting people to listen is another matter. Even if your music is good marketing it by yourself is very, very hard. 2. Even artists who aren't part of a group (I'm thinking DJ's for example) have to pay more than themselves. They don't travel alone and every live musician usually has to pay a sound guy and probably a lighting guy. 3. I think very few musicians care about getting wealthy - they just want to make a living. They want to be able to play and make music 24/7. Even reaching that level is incredibly hard. I can't remember their name but there was a Medium article posted here a while back by a band (quite a well known indie band) who were trying to do just that. They sold out 1,000 seat theatres around the country but the costs of putting on a show caught up with them. Artists need labels. Maybe not in the form we've always known them but they are still very important. I think it's also probably in the interests of artists if one place becomes king in streaming. You can focus your efforts there instead of having to distribute your music on all these streaming services with their own social sides you must also contribute to.

eveningcoffee 11y ago
You describe that labels could provide usable service for musicians. Fine, but labels do not work like this. They work rather as investment banks and their income does not come from service fees but from speculative bets in hopes to find few musicians with very high returns. I.e. musicians do not get a product from labels but are themselves a product.
- k-mcgrady 11y ago
  Think of it like a startup. Until they get to scale musicians make very little money. They therefore need investment. Their investment company (the label) also doubles as a marketing company. How do they get to scale without the label i.e. investors?
- 11y ago

smhg 11y ago

I tried to keep this as much on-topic as possible: If what you are saying in the last paragraph about the wishes of artists is true, imagine a society with a basic income (which is up for discussion in many countries in Europe - can't speak for other parts of the world). As many aren't paying (enough) for music and (as you say) most artists aren't doing it for the money, it seems like a perfect match? Without dragging in other sectors and other aspects, specifically for music (and maybe other forms of art/entertainment): would that be a better situation? Or are the assumptions simply wrong?

bane 11y ago
Most musicians make their money performing, not from recordings. Recordings are seen as a kind of marketing expense, with customer purchases as a demand signal. Basic income also has the side-con of being a generally obviously and trivially terrible idea.
datashovel 11y ago
I think it's inevitable that the world economies will eventually realize that everyone needs a basic income. I imagine that will open the possibility for far more artists / musicians to spend their lives making art / music instead of struggling to make ends meet doing menial labor or other things that humans will eventually no longer be responsible for. Will it happen within our lifetimes? My guess is no, but given the trajectory of technology in the modern world I can't see a future without it.

bane 11y ago

It's a shame that major labels lost the plot that their primary function is to act as curators, floating the best of the best to the top and making them available. 90% of everything is crap, and the same is true in the music world. An astonishing number of independent artists aren't very good. Historically, publishers were able to sieve off the top 10% and push them. Even if 90% of that 10% was still considered crap by any one person, in aggregate it was generally better than the 90% it floated on top of. The problem of course became profit maximization over curation and we've ended up with a hit driven industry, and everybody just remakes the hits over and over again. There's also an astonishing number of really great indie artists [2][3], but since labels have lost their curation function they no longer get exposure. So while independent artists have unprecedented access to self-publish, there's no curator anymore and great artists just get lost in the wash. In theory, this function has been "crowd sourced" and facebook shares and likes and youtube views and such kind of fill-in for publishing house's ineptitude. But it ultimately becomes a popularity contest, again returning us to a kind of hit-driven system. I think that good curators find an publish great music, and that in-turn builds and shapes the market, and that in-turn generates money for artists. The best example of this I can think of is the now defunct label "Windham Hill", during the 80s found an exposed a gobsmacking number of unbelievably talented artists. Their sampler albums are considered all-time classics.[4] 1 - http://www.smithsonianmag.com/smart-news/science-proves-pop-music-has-actually-gotten-worse-8173368/?no-ist http://www.smithsonianmag.com/smart-news/science-proves-pop-... 2 - https://www.youtube.com/watch?v=VYv6-5VmNEM https://www.youtube.com/watch?v=VYv6-5VmNEM 3 - https://www.youtube.com/watch?v=xZ1JUxeTg3U https://www.youtube.com/watch?v=xZ1JUxeTg3U 4 - https://www.youtube.com/user/WindhamHillLovers/videos https://www.youtube.com/user/WindhamHillLovers/videos

datashovel 11y ago
I think major labels lost the plot as soon as technology allowed them to "manufacture" music superstars as opposed to what they had to do historically, which was to "find" music superstars.