Realistic future of the Music Industry
By David Fisher. Filed in audio |Tags: future, music industry, Uncategorized
Every day that I was at Berklee College of Music, I was a party to or at least overhead a discussion on ‘where the music industry is going’. Basically it was a lot of students that knew they were dropping upwards of $120K on school, and shit scared that there would be no jobs for them afterwards. It really got old after a while.
Aftering being out of Berklee for a while, listening and observing the world around me, I have figured out where the music industry is going. What you’re about to read isn’t anything earth moving, because honestly it just makes sense.
First of all, it is very important to separate the “Music Industry” from “Music”. 99% of people who play, write and make music in their lives never get anywhere near being able to live off their music, or even recoup on their costs from playing music. Yet they persist. The same is true for poets. We all know that you can’t be a respected poet until you are pennyless and dead. If everything that resembled a money-making venture from music went away tomorrow, there would still be music. I am convinced that if the world was about to end or the human race die off some of the last sounds that we would make would still be music. And yet, after us there will still be music in nature. Music will not stop due to downloading, copyright isses, the RIAA, industry change or nuclear war.
But that still doesn’t answer the question of, “Where is the music industry going?”. The audio recordings will become free, or rather it will be optional to purchase the music. But wait! How are the “record companies” going to survive? Well, the record companies (that are smart) will start tying the record contracts recoupables (and profitability) into tour support contracts. They have done this with a handful of artists already (I think Robbie Williams had such a contract). Universal Music has the Universal Tours division with their own tour support. Virgin Music has a new site that is heavily focused on touring and festivals.
So will records be recorded? Why will they be recorded? If there’s no money to be made from them, what is the point? I am a heavy poster to the professional recording forum Gearslutz and this is one thing that really worries a lot of engineers. Budgets have shrunk and the artists are able to record a great deal at home studios. That’s a totally separate issue, but still the fear is that music will be ‘free’ so that the people to make the albums won’t be needed either. The “Record Companies” (let’s call them Music Companies from now on, as records aren’t where they will make money) will just chalk it up to a promotional expense for the tour. They spent $200,000 on radio spots, $250,000 on print ads for the tour, and $125,000 for recording the album that will push the tour. It becomes another fixed expense for the tour. The record companies will take a huge cut of the tour (whereas right now they get nothing for the most part) and money will be made.
What about bands that can’t tour? Some simply amazing albums could not be done live. Well honestly, they will just have to be smart and find other ways to make money. Unexpected revenue sources like Ringtones, or licensing to films will have to be how the money is made. When recordings first came out some musicians feared that they would no longer be needed since not as much live music would be needed (this fear still persists today on Broadway).
You should think of music as “content” on your blog. The content is what brings people in. You give it away. The content isn’t how you make money (if you’re monetizing your blog). Think of it as a subscription basis vs ancillary incomes and alternative monetization.
The “major” labels have already undergone consolidation to a huge degree, but there will be more M&A ahead still. Touring companies will be merged in, arenas will be purchased, etc. There is still huge money to be made in music licensing and ringtones (publishing companies are doing great). Merchandise is also very hot as always. Musical instrument companies are posting some good profits, and places like Guitar Center are posting massive profits. There is money to be made! You just have to be smart about it. I for one am not worried.
As a short recap: Records as we know them will be free (or optionally free) and the Music Companies will support them still, because they will chalk them up to an advertising/promotional cost for the tour. Music will continue. It might be harder to make money at times, but so is life.