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Wednesday, September 10, 2008

This Just In: Music Industry Still Clueless

posted by on September 10 at 14:44 PM

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Forcing Muxtape to shut down, administering onerous royalty rates to internet radio stations, pulling tracks by popular artists off iTunes… floundering major labels still can’t buy a clue, and this article in Advertising Age by Simon Dumenco reiterates the dismal state of things. For example:

[I]t’s been a depressing summer for the delusional record industry. We’re seeing a total disconnect between labels’ unrealistic, old-school revenue expectations and what the market can bear. On the streaming-music front in particular, the sad reality is that advertising revenue isn’t, and may never be, there to fully support the music industry’s wishful-thinking profit margins… [T]he music industry… would prefer that you only listen to music when and where they want you to. And that’s no way to figure out the path to future revenue.

As a music journalist (i.e., a parasite on the record industry’s bloated corpus), I derive no schadenfreude from the biz’s prolonged slump. In fact, I wish boom times would return. I would like to see record profits, from the tiniest artist-run indie imprint to the most mammoth major. Alas, I also wish I could perform 360º slam dunks… And it seems like the odds of major-label execs devising a fruitful business model in the current digital free-for-all are as likely as me beating Kobe Bryant in a one-on-one game.

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1

The recording industry seems to be taking the route of various other buggy-whip industries by lobbying Congress to write laws to protect their doomed business model rather than adapting to changing conditions. Probably because there's no likely model going forward that will preserve anything like the former levels of profitability enjoyed by the industry. So they're hoping they can just litigate their way back to profitability and relevance. So far it isn't working.

The record labels are essentially middlemen and digital distribution means a lot fewer middlemen are needed.

Posted by flamingbanjo | September 10, 2008 4:04 PM

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