what's happening to the music industry
August 14th 2008 11:21
Ashleigh Dollin
Recent events have sent tremors through the music industry. Radiohead released their album In Rainbows without the aid of a major record label and allowed consumers to pay whatever they want for the download. Madonna, Prince and Nine Inch Nails are some other artists moving away from major record labels. What does this mean for the music industry?
Recent press coverage of the industry has not painted a pretty picture:
"The music industry is in big trouble. It may not be an exaggeration to say it is dying." – The Age 12/02/2008
"Everywhere you look, dark clouds are gathering over the music industry." – The Sydney Morning Herald 05/02/08
And the doom and gloom is international:
"The flagging music industry [is] eroded after years of crumbling sales and illegal downloads" America – Detroit News 09/05/08
What this coverage doesn't take into account is that the industry is multi-faceted. It is not just a handful of major record labels and their outdated CDs. The industry is in an embryonic stage and as it responds to new technology more power is being handed to the artists.
Major record labels, who are perhaps the ones most affected by the current state of the industry, refused to comment.
Artists now have more choice when it comes to releasing their music for example through Myspace and more people are using non-traditional methods to find music.
"The diversification of the music and the business is proving to be an empowering outcome for the consumer, the artists and the music business" said Philip Mortlock, co-owner of independent record label ORiGiN Music (The Basics) and creative manager of Albert Music (AC/DC, Dallas Crane).
Sabienne Heindl from Music Industry Piracy Investigations (MIPI) disagrees, although she does see promising signs in the example of Radiohead, as bands are finding new distribution methods, she also sees a sad truth in today's disposable and consumer driven society.
She points out that people are greedy, illegally downloading music so they can boast about their "50,000 music files." People criticize Australian Idol but unfortunately this may well be a product of the time.
"If you're not prepared to pay for the music and enable companies that are trying to invest in it to get some return on their investments what do you expect," said Heindl. "There just seems to be no respect anymore and I think that's really sad."
Wally De Backer from Gotye and The Basics also sees the trend in society to want more.
"The web has provided an amazing platform for people to get their creativity "out there"," says De Backer. "Perhaps it's also leading to a million-miles-a-second turnover in the way and speed at which people consume things like music which maybe devalues the art."
Sebastian Chase, pioneer of MGM distributions, is recognised as a leading figure in the Australian music industry and is sometimes referred to as the Yoda of the industry because of his knowledge and experience since the early 70s. He has a brighter vision of the current state of the industry.
"I think the music industry is in the best shape that it has ever been, continuing from when it started," said Chase. "It's been invigorated and challenged by new technology. Which is really good."
Since 1999 and the introduction of Napster, a pioneer in illegal peer to peer (P2P) file sharing software, the internet has changed the face of the industry. Rather than being run by a few major record labels creating hit making clones to secure maximum CD sales, new distribution mediums have opened up different avenues for both consumers and artists.
Although CD sales are steadily declining digital sales of music continue to rise.
According to ARIA in 2007 digital track revenue increased by over 650% and volume increased by over 630% since 2005.
Unfortunately illegal digital sales dominate the market with a ratio of 20 illegal downloads for every track sold worldwide according to the International Federation of the Phonographic Industry (IFPI) 2008 digital music report.
Illegal piracy is taking money out of the major labels which Heindl explains as "banks for artists and bands". The less money these banks have the less willing they are to invest in new and up and coming acts.
"What we've seen is local rosters for Australian artists reducing as a result," explains Heindl. "Gone are the days when an artist would be given maybe a five year contract to prove themselves and be nurtured through that period."
Chase and Mortlock both acknowledge that the industry is going through the difficulties of change however believe that once it has passed this stage the industry will be dynamic and thriving. The old industry is being stressed and new business models are discussed. For example getting revenue from advertising, live music and merchandise, new ways of encouraging consumers to buy legal downloads, subscription plans and ultimately more choice and control to artists and consumers.
Chase sees the internet as offering free promotion and that if the consumer wishes to support the artist they will happily fork over the cash.
"The majority of people I think if they are attached to an artist they actually understand that they are helping that artist survive and support themselves and I think that they are quite happy to pay for music" said Chase.
As the internet continues to develop at hyper speed independent artists and labels are also rising in popularity.
De Backer has received great reception to his music particularly with his second album for Gotye, Like Drawing Blood. He won the Aria for best male artist last year. The popularity brought offers from most of the major labels in Australia. De Backer chooses to remain loyal to himself having released his album on his own label.
"I do it because the creative freedom, financial independence, satisfaction and consistent worthwhile challenges are all greater" said Wally about remaining independent. "Being independent is about being able to make music when I want, how I want and only IF I want. Any other option just seems like a waste of time."
Perhaps independent labels are growing in popularity because they are there for the long run unlike major labels that might cut support if you are not successful.
"[Independent labels employ a] more 'hands on' approach and can give more creative freedom and attention. They can't afford to give up if something doesn't take off immediately therefore the artist has more time to develop" Mortlock said.
As the industry continues to shift and morph artists are becoming more self funded and are owning their music.
"A lot more artists are self-investing, which is one of the major trends right around the world" said Chase, "the output is still going to be there but the ownership is going to be designated by the artist and not by the record company."
Chase believes that new, up and coming bands need to realize that the age of self-investment is now and to own their creation commercially and artistically they need to be willing to pay for themselves.
Major record labels are becoming increasingly reluctant to invest in new talent so the artist must now take the music industry in their own hands and hip pockets.
It is still too early to predict where the music industry will be in the next 10 years. Illegal piracy needs to be curbed and new business models employed. The industry is addressing this and it should be interesting to see where it ends up. I don't think the church bells are tolling just yet.
Copyright - Ashleigh Dollin
Recent events have sent tremors through the music industry. Radiohead released their album In Rainbows without the aid of a major record label and allowed consumers to pay whatever they want for the download. Madonna, Prince and Nine Inch Nails are some other artists moving away from major record labels. What does this mean for the music industry?
Recent press coverage of the industry has not painted a pretty picture:
"The music industry is in big trouble. It may not be an exaggeration to say it is dying." – The Age 12/02/2008
"Everywhere you look, dark clouds are gathering over the music industry." – The Sydney Morning Herald 05/02/08
And the doom and gloom is international:
"The flagging music industry [is] eroded after years of crumbling sales and illegal downloads" America – Detroit News 09/05/08
What this coverage doesn't take into account is that the industry is multi-faceted. It is not just a handful of major record labels and their outdated CDs. The industry is in an embryonic stage and as it responds to new technology more power is being handed to the artists.
Major record labels, who are perhaps the ones most affected by the current state of the industry, refused to comment.
Artists now have more choice when it comes to releasing their music for example through Myspace and more people are using non-traditional methods to find music.
"The diversification of the music and the business is proving to be an empowering outcome for the consumer, the artists and the music business" said Philip Mortlock, co-owner of independent record label ORiGiN Music (The Basics) and creative manager of Albert Music (AC/DC, Dallas Crane).
Sabienne Heindl from Music Industry Piracy Investigations (MIPI) disagrees, although she does see promising signs in the example of Radiohead, as bands are finding new distribution methods, she also sees a sad truth in today's disposable and consumer driven society.
She points out that people are greedy, illegally downloading music so they can boast about their "50,000 music files." People criticize Australian Idol but unfortunately this may well be a product of the time.
"If you're not prepared to pay for the music and enable companies that are trying to invest in it to get some return on their investments what do you expect," said Heindl. "There just seems to be no respect anymore and I think that's really sad."
Wally De Backer from Gotye and The Basics also sees the trend in society to want more.
"The web has provided an amazing platform for people to get their creativity "out there"," says De Backer. "Perhaps it's also leading to a million-miles-a-second turnover in the way and speed at which people consume things like music which maybe devalues the art."
Sebastian Chase, pioneer of MGM distributions, is recognised as a leading figure in the Australian music industry and is sometimes referred to as the Yoda of the industry because of his knowledge and experience since the early 70s. He has a brighter vision of the current state of the industry.
"I think the music industry is in the best shape that it has ever been, continuing from when it started," said Chase. "It's been invigorated and challenged by new technology. Which is really good."
Since 1999 and the introduction of Napster, a pioneer in illegal peer to peer (P2P) file sharing software, the internet has changed the face of the industry. Rather than being run by a few major record labels creating hit making clones to secure maximum CD sales, new distribution mediums have opened up different avenues for both consumers and artists.
Although CD sales are steadily declining digital sales of music continue to rise.
According to ARIA in 2007 digital track revenue increased by over 650% and volume increased by over 630% since 2005.
Unfortunately illegal digital sales dominate the market with a ratio of 20 illegal downloads for every track sold worldwide according to the International Federation of the Phonographic Industry (IFPI) 2008 digital music report.
Illegal piracy is taking money out of the major labels which Heindl explains as "banks for artists and bands". The less money these banks have the less willing they are to invest in new and up and coming acts.
"What we've seen is local rosters for Australian artists reducing as a result," explains Heindl. "Gone are the days when an artist would be given maybe a five year contract to prove themselves and be nurtured through that period."
Chase and Mortlock both acknowledge that the industry is going through the difficulties of change however believe that once it has passed this stage the industry will be dynamic and thriving. The old industry is being stressed and new business models are discussed. For example getting revenue from advertising, live music and merchandise, new ways of encouraging consumers to buy legal downloads, subscription plans and ultimately more choice and control to artists and consumers.
Chase sees the internet as offering free promotion and that if the consumer wishes to support the artist they will happily fork over the cash.
"The majority of people I think if they are attached to an artist they actually understand that they are helping that artist survive and support themselves and I think that they are quite happy to pay for music" said Chase.
As the internet continues to develop at hyper speed independent artists and labels are also rising in popularity.
De Backer has received great reception to his music particularly with his second album for Gotye, Like Drawing Blood. He won the Aria for best male artist last year. The popularity brought offers from most of the major labels in Australia. De Backer chooses to remain loyal to himself having released his album on his own label.
"I do it because the creative freedom, financial independence, satisfaction and consistent worthwhile challenges are all greater" said Wally about remaining independent. "Being independent is about being able to make music when I want, how I want and only IF I want. Any other option just seems like a waste of time."
Perhaps independent labels are growing in popularity because they are there for the long run unlike major labels that might cut support if you are not successful.
"[Independent labels employ a] more 'hands on' approach and can give more creative freedom and attention. They can't afford to give up if something doesn't take off immediately therefore the artist has more time to develop" Mortlock said.
As the industry continues to shift and morph artists are becoming more self funded and are owning their music.
"A lot more artists are self-investing, which is one of the major trends right around the world" said Chase, "the output is still going to be there but the ownership is going to be designated by the artist and not by the record company."
Chase believes that new, up and coming bands need to realize that the age of self-investment is now and to own their creation commercially and artistically they need to be willing to pay for themselves.
Major record labels are becoming increasingly reluctant to invest in new talent so the artist must now take the music industry in their own hands and hip pockets.
It is still too early to predict where the music industry will be in the next 10 years. Illegal piracy needs to be curbed and new business models employed. The industry is addressing this and it should be interesting to see where it ends up. I don't think the church bells are tolling just yet.
Copyright - Ashleigh Dollin
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