The 'New' Music Industry According to Miles Copeland
By Eric de Fontenay
Jan 25, 2003, 06:03 PST
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The 'New' Music Industry According to Miles Copeland
By Eric de Fontenay, MusicDish.com
I have to admit that I didn't quite know what to expect from Miles Copeland's keynote speech at last week's Noorderslag seminar in the Netherlands. I know that I didn't see eye-to-eye with him on the 7 Year Statute and was always uncomfortable with his claim that music piracy was Osama Ben Laden's latest weapon in his war against western civilization. But this time, I believe he was right on target and the news is GOOD (the only part he never realized).
According to Miles, the music industry is in a state of utter shock, much like the victim of a violet car accident, and everybody is finally coming to the realization that the rules of the game have fundamentally changed. So what was the nature of the crash that woke everyone up?
Well, the first was a vigorous attack on the recording industry by the artists themselves, whether led by Don Henley, Courtney Love or RAC, as being unfair, siphoning off a disproportionate part of the profits, tying artists to impossible and unfair contracts,... and the list goes on. The attack would not have been of great concern if it weren't for the fact that it had attracted a fair amount of political attention in the form of hearings led by California Senator Murray or the Artistic Freedom Act introduced in the New York State Assembly. And, despite themselves, major labels are starting to change the way they deal with artists as illustrated by BMG's royalty accounting policy change.
Then of course, there's that old boogy man called piracy. I don't believe there's much more that needs to be said here except for the fact that Miles now places the overwhelming blame for lost sales on the CD burner rather than the Internet (still a willing accomplice).
But piracy's not just depressing CD sales, it's also led to a rash of store closings such as Best Buy's announcement it would close 110 MusicLand stores as a result of a 15% drop in CD sales for 2002. Less stores means less opportunity for legitimate music buyers to find the music they want. Of course, they may just not like buying their music in traditional record stores, preferring rather the all-in-one Walmart shopping experience or simply going straight to Best Buy store as they're grabbing that box of blank CDs.
But what is much less discussed is the effect of the corporatization of the music industry and its growing reliance on the Wall Street that engendered the mega-media conglomerates like Vivendi Universal & AOL/TW. Seems Wall Street's not so sweet on those conglomerates anymore, as reflected in their bottom-of-the-barrel share prices, nor are they particularly enamored with the traditional music industry model based on ownership of vast catalogues. Now that those catalogues are in the hands of p2p systems like KaZaa, one could forgive financial analyst for wondering, "What are their value anyway?"
If the model is no longer to build a catalogue that would then be picked up by the major for a hefty profit, as was the case with Miles IRS Records, and if the masters are no longer able to generate the revenues to validate the huge budgets labels backed an album with, what's left? Therein lies the good news.
The music industry will finally have to come to grips with and constructively come up with a business model for the future, something Miles doesn't count on the industry being able to do until 2004 (remember, we're in shock this year). And here will be the broad lines of that new music industry:
* As Miles puts it, if you can't get the money from that piece of the pie (ie., album sales), you'd better look at the rest of the pie. No longer able to please themselves simply with record sales, record labels will need to look at the other aspects of an artists career in order to justify their share of the investment. As such, the Robbie Williams - EMI deal is simply a foreshadowing the merger between the traditional role of record labels and that of the manager.
* This new role for the record label is a far cry from today's fragmented market where labels deal with recorded works, the publisher with publishing, agent with gigging and manager overseeing it all. Rather, labels will present themselves as one-stop shops, offering everything under one roof to help the artist manage every aspect of their career instead of everyone focusing on their private fiefdom. If a label believes that they need to get the artists on the road for a year before coming out with an album, so be it.
* Artists and labels will need to work much more closely together and actively collaborate. Gone are the days of, "Now that I have a label contract, I can just sit back and get rich!" Artists signed with major labels will have to work as hard as their independent/unsigned counterparts.
* Nor will be the labels be very keen to own the master over long periods of time. It's no longer the cash cow it used to be and may in fact distract from other, more lucrative avenues such as concert receipts. This will all play against studio artists, but play into the hands of performing bands, especially those with an existing and active fan base.
* In fact, artists will have the option to retain more control than ever. Come in with a recorded album and an existing and active fan base, and the label will become a much less important element in their career. Their role may simply be to help develop them to the next level, expanding those aspects the artists is already having some success at.
While Miles appeared to believe that this was all bad news, I think it is a new dawn not only for labels but particularly artists and fans. Artists are about to get what they've said they've always wanted: a more artist development role on the part of the labels versus fitting them in cookie-cutter templates, more involvement and control on the part of the artists, budgets that might help the other 90% of major labels acts to break even, less reliance on the CD and more on their career.
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