Piracy didn’t kill the major label business model, choice did.<\/p>\n
At some point in the future, earlier rather than later if the majors capitulate and agree to live in the present as opposed to the 1990s, music acquisition on the Net will be monetized.\u00c2\u00a0 A great deal of revenue will be generated, but it will be distributed amongst a plethora of providers\/acts.<\/p>\n
The major labels, employing a push mentality, focused on ever-fewer records in an attempt to create blockbusters.\u00c2\u00a0 Figuring their lock on exhibition and distribution would help them succeed.\u00c2\u00a0 To get heard you had to be on terrestrial radio.\u00c2\u00a0 To get bought you had to be in Best Buy.\u00c2\u00a0 And the majors controlled those gatekeepers, indies were frozen out, therefore most of the public was unaware of other offerings in the marketplace, to the degree they existed.<\/p>\n
The Telecommunications Act of 1996 signed the death warrant for terrestrial radio.\u00c2\u00a0 Consolidating, just like the major labels, radio aired fewer records and more commercials.\u00c2\u00a0 A formula that might work in Bizarroworld, but was a recipe for disaster in reality.\u00c2\u00a0 People didn’t want to listen to the same records for months at a time, and they certainly didn’t want over twenty minutes of commercials an hour, so they started tuning out.<\/p>\n
And then came Napster.\u00c2\u00a0 Not only could you almost instantly locate and download your favorites from the past, you could do the same regarding any title you read about or a friend told you about.\u00c2\u00a0 No Jack format could equal this.<\/p>\n
And then came the iPod, a place to store and carry your downloaded tunes.<\/p>\n
And then everybody got a high speed connection.\u00c2\u00a0 And they could listen to Internet radio.<\/p>\n
And those that subscribed to satellite, they listened to the radio of their dreams, with niches never exposed on terrestrial, and many of them.<\/p>\n
People are more excited about music than ever, they’re consuming more music than ever, but those who used to be in control of the business…their stranglehold has been broken.<\/p>\n
And everybody’s scattered in a different direction.\u00c2\u00a0 You don’t have to listen to Mariah Carey.\u00c2\u00a0 Her gargantuan hit, "We Belong Together", went unheard by a huge segment of the population.\u00c2\u00a0 Everybody wasn’t listening to the same Top Forty radio station, everybody was no longer watching MTV, rather everybody was living in his niche, or multiple niches, listening oftentimes to tracks the purveyors of Mariah Carey had never heard of.<\/p>\n
It’s kind of funny how the top-down marketers still don’t see the paradigm.<\/p>\n
The iTunes Music Store is a failure because the tracks are too expensive and you can’t test music out, not because of the proprietary DRM.<\/p>\n
And merging satellite radio companies will result in blander, more homogenized programming that Mel Karmazin might use to dazzle those ignorant on Wall Street, but will never appeal to the masses.<\/p>\n
If you want to get everybody on board, you’ve got to offer…EVERYTHING!\u00c2\u00a0 Give me both XM and Sirius channels for the same $12.95.\u00c2\u00a0 Don’t slice off the bottom of the Internet dial with heinous copyright fees, let EVERYBODY play and collect the pennies as well as the dollars.\u00c2\u00a0 Because what fat cats think is marginal, many people believe is nirvana.<\/p>\n
Now there are winners and losers in this new sphere.\u00c2\u00a0 The landscape is not completely flat.\u00c2\u00a0 But the peaks…they’re not as high.\u00c2\u00a0 Because not that many people are interested in lowest common denominator offerings.\u00c2\u00a0 And that which sold well in the past ten years had this characteristic.\u00c2\u00a0 Or maybe not that many people are interested in rap, or other so-called dominant genres.\u00c2\u00a0 Given the choice, people want something else.\u00c2\u00a0 And they now have this choice.<\/p>\n
Ubiquity no longer is.\u00c2\u00a0 No one has dominance over American mindshare.\u00c2\u00a0 God, it took Katrina for most of America to finally see George Bush’s faults, and that was almost half a decade after he took office.\u00c2\u00a0 What makes you think some POP song is gonna penetrate the popular consciousness?<\/p>\n
Network TV ratings plunge.\u00c2\u00a0 Why watch news at 6:30 when you can get it 24\/7 on a cable channel?\u00c2\u00a0 Why watch sanitized programming on network when you can see real life on pay cable?<\/p>\n
But there are a limited number of TV channels on a system.\u00c2\u00a0 And TV production is far from cheap.<\/p>\n
And movies are even more expensive.\u00c2\u00a0 And the majors have a stranglehold on distribution.<\/p>\n
But music…\u00c2\u00a0 Music production is cheap.\u00c2\u00a0 And there’s no cap on the number of acts in the marketplace.\u00c2\u00a0 Sure, hype is expensive, which is why most indie acts let their audience do the selling for them, which is now possible with new technologies.\u00c2\u00a0 Furthermore, the more you market, the more you try to become ubiquitous, the more your core, the revenue-generating machine that you depend on day by day, gets turned off.\u00c2\u00a0 Become a huge star, and you’re probably finished.\u00c2\u00a0 Then again, if you grow organically over a decade, no one complains.\u00c2\u00a0 But the point is you no longer need the major label as a bank, as a marketer, you don’t need that much money and your fans do so much of the work for you.\u00c2\u00a0 How do the majors compete in this new landscape?\u00c2\u00a0 Good question.<\/p>\n
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