Wanna know why the RIAA and major labels are so concerned about P2P and the internet? It makes them irrelelvant:
"Portland, Oregon singer-songwriter Geoff Byrd may be the first artist to break into the mainstream music world from the Internet, but he’s learning that there’s still no free ride. Byrd’s Internet fame has been growing slowly over the past year. As an unsigned artist on the GarageBand.com Web site, his music was consistently rated high, and ultimately drew strong support from Live365 and Microsoft’s MSN. For a short time last December he was the most-played rock act on Net radio, beating out U2 and Green Day, according to Webcast raters RadioWave Airplay Monitor.
All of that was enough to garner him attention from major labels, but no record contract. So this week, his managers–which include the founding member of the band Kansas–are signing Byrd to their own new label that will give him national distribution through a Universal Music Group affiliate and access to mainstream radio stations around the country."
In my market writings, I have been critical of both the efficient market hypothesis, as well as the idea of prediction markets. But what if we combine the idea of prediction markets with the actual retail marketplace?
In other words, why don’t big labels use P2P to help them select which bands to sign? These groups ultimately must compete in the marketplace, so why not let the marketplace help? Use actual downloading as an additional source for A&R data selection, in addition to subjective label management decisions?
One of the email lists I subscribe to (Lefsetz) published this comment on the sensibilities of the so-called label pros:
from John Parikhal:
A lot of today’s music
problems started when the labels eliminated program directors and music
directors from decision making.
I knew it was all over in the 80s when I
saw an ad in R&R for a new release. Nothing about how great the music was
… instead, it said "going for adds (followed by a date)". I was puzzled and
called some record company friends. They told me it was the new thing …
pick the single/track the company wanted to release … and try to get as
many stations as possible to add it in the same week (Soundscan was just a
twinkle in Mike Shallett’s eye as this was happening).
companies stopped following the policy that had helped them sell ZILLIONS of
albums, a policy that relied on stations to make choice first (bottom up).
(Of course, MTV had a lot to do with accelerating the decline of album impact
while elevating the "look" of the star. And, as people smoked less pot, they
"listened" less to music.)
In the best Superstars days with Lee Abrams
(1977-1981), the music meeting was the best part of the week. Albums came in
by the carton. Everyone listened. They picked 2, 3 or even 4 tracks that were
good and started playing them. A week later, everyone talked on the phone and
thrashed out which tracks were better. About 50% of the time it was DIFFERENT
from what the record company was pushing. And nearly 100% of the time, the
PDs and music directors were proven right.
(Of course, radio picked
some stinkers and there was lots of low grade payola going on too)
point it this …. as the music business pushed singles … and, as
they determined that THEY would choose the order of track release (put out
the weak track and "save" the better one??!!) … as they IGNORED the
consumer and radio station input … people lost interest in albums and made
YES/NO decisions on singles …
I wonder what would happen if the
record companies gave 5 albums of up and comers (with no big marketing
budget) to 50 music directors and asked them to pick the best "tracks"
(forget singles). And, I wonder how they would fare relative to the
pre-release Internet testing that’s going on right now?
Is it any surprise that the Labels are horrified? Not just of P2P, but of colloborative filtering, of internet streaming, of audience ratings, and lastly, of artists maximizing touring and DVD revenue and ignoring — or at least downplaying — CD sales.
Singer breaking from Net to mainstream
By John Borland
C/NET, Fri Apr 22 12:31:00 PDT 2005