The music industry.

Maaan have they been crying salty tears for a while now. All by themselves, because we as consumers have moved on, and artists have come up with new old ways to put more gold on the chain.

It’s one of those things where an industry that large, and prone to big changes in technology, public opinion and perception. It’s the same if you’re in car manufacturing, banking, news organizations or the travel business… they’re all having just as hard a time to adjust to the newness of things.

People think, communicate, socialize, verbalize and in short live differently now, and big corporations in big marketplaces, have a harder time seeing it coming and/or re-adjusting their business…

But let’s get back to the crying music industry (an industry we have covered before, here and here)

The chart you see on the top, is why record labels started using the 360 deal, on the sly about 3-4 years ago, and for real about 2 years ago, allthough you could argue that it all started with Robbie Williams EMI deal in 2002.

If you don’t know what a 360 deal is, and you’re too lazy to click on the previous link, then it basically gives the label a cut of everything the artist, group or band makes… and i mean everything!

Amongst the best known artists with 360 deals you find names like Madonna, Jay-Z, Robbie Williams, U2 and Shakira.

I’m not going to get into if signing a deal like that is good business for all, but i will instead let someone who would actually know that, tell you a little something

But all of this is not even my point is, my point is what the chart shows us… Next year the money lost on “normal” records sales (don’t even get me started on missed online sales opportunities) will cross with the extra money made on live shows.

The interesting thing is that when the 360 deals started, labels were saying all the right things, like:

“If we weren’t so mono-focused on the selling of recorded music, we could actually take a really holistic approach to the development of an artist brand,” said Craig Kallman, chairman of Atlantic Records.”

But looking at the direction popular music has taken, and where it is now more than ever, this is still where we are at..

“Let’s face it, if you’ve sold 1.5 million albums off one single, and here comes your clothing line, and here comes your personalized phone, you haven’t really built a fan base,” Mr. Flohr of ATO said. “You’ve built fans of songs.”

So you still have to wonder… Is there an OHWA (One-Hit-Wonder Anonymous)  for record labels?

Because the ones complaining the most are the record labels and not the music industry. The ones that have a hard time grasping the new world order is not the artist, it’s the labels. The ones that are always going to come out on top are the artist, it’s not the industry that they are part of. Because the other part of that industry, are businesses slowly dying, but since it’s run by people that pay bills, then it’s going to be ridden for as long as possible… And that is the biggest problem of all.

Small fixes and buying more buckets to get out the water is not going to be enough. The 360 deal may be a very big bucket, but what is really needed is a new boat… And record labels don’t seem equipped to build it, eventhough these numbers show them that there’s still a lot of money out there, it’s just about being creative.

BANDIT

*source: Times Online