Saturday, October 27, 2007


Allen Johnston – The Music Specialist

Pay back has finally arrived and the system created by the major record labels for music sales is feeling the FULL BLUNT.

In a capsulated version, RADIOHEADS gambit of offering its new release online --and letting the consumer decide on price has turned out to be a genius marketing move.

TELEGRAPH UK reports that hits to RADIOHEAD's website increased 11-fold after the announcement. Although the band refuses to provide concrete numbers on how many fans have pre-ordered their seventh album, "In Rainbows," but figures from Net monitoring agency HitWise show the move pushed the site up from #43 to #1 for music websites in the UK. A band spokesman did confide that consumers so far are spurning the opportunity to download the album for as little as 45 pence ($1US Dollar) in favor of paying full pop for the £40 ($82 US Dollars) box set, which includes vinyl records, CD and artwork
Now that the public has spoken about the music that they desire, the band has direct access to the fans that love their music and they are making more money per disc than they have ever made in RADIOHEADS career. This new concept is ultimately where the Internet will take every type of recorded entertainment. Direct to the consumer. Major labels are not extremely happy about the idea that you can have a massive hit record and not have to use their retail / radio system to get it heard and sold.

The benefits of direct access to the consumer are so great that other acts are now looking at how they can utilize this system. Since Rock & Roll makes up the largest portion of Internet music sales, this is normally what we hear about Internet sales, but the originator of this direct to consumer system has to be PRINCE.

After leaving his “slave” contract PRINCE started selling his music independently through Al Bell (remember The Most Beautiful Girl In The World), but from then on he sold music exclusively online. In his latest move PRINCE gave away 2.8 million copies of his album to newspaper readers in the UK. Prince's free CD was noteworthy not only in that it marked the first time a music icon of his stature gave away a new album of original music, but also because it demonstrates the degree to which album sales no longer matter as much to artists. After all, tours are where most acts make most of their money, and the fact that the music sales have been in a tailspin for the better part of this decade is not news to anyone at this point.

There are a number of factors behind the sales slide, but one important factor is that the album is no longer the primary means for an artist or group to get their music into the hands of the public. Most bands have pages on MySpace where would-be fans can sample their wares. Others, like the Barenaked Ladies, Tilt, and Keane have released albums on USB flash drives.

Now comes word that NINE INCH NAILS mastermind TRENT REZNOR is cutting ties with his label, UNIVERSAL MUSIC GROUP, according to CNS. Previously, REZNOR urged fans to download his new CD illegally, after finding out how much the label was charging AUSTRALIAN and NEW ZEALAND fans for his record.REZNOR's statement on the band's website stated, "It gives me great pleasure to be able to finally have a direct relationship with the audience as I see fit and appropriate. Look for some announcements in the near future regarding 2008. Exciting times, indeed."

Just because you release your music online does not mean that you are going to have phenomenal sales. There are a few things ALL of these artists have in common that create multiple revenue streams.

The first thing is that they have already enjoyed Gold and Platinum sales on past major label product.

Each and every one of them has cemented a loyal audience and maintains communication with that audience on a regular basis via the Internet

Touring is a major portion of their success while having multiple merchandising articles available for sale before, during and after the tour.

Look for many “superstar” status artists not resigning with major labels in the near future, especially when they can have the type of success that RADIOHEADS & PRINCE have shown.

Last but not least, if the major labels have less superstar product to generate revenue, they'll undoubtedly have less money and time to break new talent. This will make it near impossible for new artists to acquire that major label deal without having shown labels a solid fan base that is constantly growing, massive amounts of Internet play and retailers that want the product!

The new record industry is here NOW and this is just another one of the many BIRTHING PAINS.

No comments: