Spotify landed in the U.S. market a few weeks ago, and it is a big controversy in the music industry. Actually, it is more like a revolution. I’m sure there are different services similar to Spotify that have been around longer, but this will definitely accelerate the changes the music industry has to go through.
There are obviously three different stand points on this: labels, artists and consumers.
I actually signed up for Spotify and tried to see what this thing does.
Holy crap, this is awesome! You can search and listen to whatever songs you want as long as the songs are on their catalog. There are songs with different mixes and masters that I didn’t even know existed. Let’s say you heard about a new album which your friends say is pretty good, but you aren’t sure whether you want to risk to spending your hard earned money to buy the album. Now you can hear the entire album for free in less than a minute before you take the risk. Sure, there are some annoying commercials in between every few songs or so, but at least you get to hear the songs for free.
I’ve had experiences just like everybody else where I went to a record store and bought CDs that were placed in the good spot on the shelves or where I had seen or heard an artists’ name a lot, so I bought it. I ended up not liking the CD at all and never listened to it again. Buying CDs used to be a gamble sometimes if you had never heard the material before (which was kinda the fun part too), but now you know exactly what you are getting. Moreover, if you actually liked the songs you heard on Spotify, you can buy them online in both the digital copy and the physical copy for the same price. You don’t even need to take the time to go buy the CD at a store anymore. While you wait to get the physical copy in the mail, you still can listen to the digital copy of the album on Spotify.
Services like Spotify provide a fair relationship with artists and the consumer. We get to try it before it costs us anything. How awesome is that?
On the other hand, these services are one of the biggest nightmares for record labels. Labels are the ones that can’t think of long term benefit of this. CDs are becoming an outdated format unfortunately. Needless to say, their sales are dropping drastically, so labels are desperate to survive and pay their bills. This is the problem. You can’t change the fact that music is more of a promotion and marketing tool than a product now. It sucks, but we must accept it.
Don’t get me wrong, some labels are smart and accept the reality of this new consumer technology and take advantage of it as they try to figure out how to sustain their next form of revenue. Most labels are narrow minded, but not all of them.
Why are some labels are so afraid of Spotify? Because it will potentially take the last few thousand CD sales away, and more importantly, digital sales. A lot of recording contracts with new artists nowadays include a clause where labels keep 100% or almost all digital sales (which is ridiculous). That being said, that’s another source of revenue they would lose. Now why would people buy music when you can stream it for free? Those labels aren’t thinking of the positive side of this service. At least labels/artists get small royalties every time the songs get played where as you get nothing from illegal downloads. If consumers liked what they heard, they are more likely to go see them live, and they may purchase merchandise. Labels and artists must adapt or die.
Since over a decade ago, the music industry became a consumer controlled market.
For many years, labels had control of what consumers got to hear and see. They were the ones to scout the artists, and represent them as signed artists with their labels’ logos and with quality music.
Don’t you miss the days when most releases from labels were pretty awesome and you were excited to hear new bands from them? This is the time to reform and start from scratch.
For artists, especially unsigned bands, this can be a great opportunity. Unsigned bands can be at the same level as all the signed bands and people can find you guys when they search your name. Think abut it. Labels most likely won’t pay bands to record an album and if they did, they would most likely want all that money back in the form of a 360 deal where bands pay to play. Without a label bands get to keep 100% of their profits and they are able to invest that money into their future. If labels don’t give bands tour support, what’s the point in signing a deal when bands give up the rights to their music and labels take every piece of the pie.
Most labels have no interest in investing new talent anymore. This is why they have been signing the bands that have been around for many years, have previous sales records, are in the genre of a current trend, or bands that sign shit contracts. Why? They don’t want to take the risk of spending a bunch of money and losing their ass on a new band. Instead, they sign many bands with deals where labels get paid percentages on pretty much everything the bands make only to drop the band after a few years. If they make it, great. If they don’t, at least the label made a few backs from the band. Have you ever wondered why some of your favorite bands aren’t touring anymore? Because those bands don’t get tour support and they can’t simply take time off from their day job just to lose money on a tour. Most labels don’t care about the music or talent anymore, and I believe this is one of the major reasons why people stopped buying music. Go to some record label websites, check out their roster and see how many bands you’ve never heard of. You will be surprised. They need to restructure and downsize their roster with the bands that consumers really want to hear and invest in them. It might take time to recoup the costs and get the buzz out, but every business starts from investing on products they represent. That’s the way it used to be. It’s that simple.
However, we can’t simply blame just labels though. Again, it’s a consumer controlled market. We, as consumers must be willing to spend money to support the artists we like whether they are signed to labels or not. We have more freedom to get music now, so it’s time to give the artists their return.
At the end of the day, without you spending money, artists can’t record a professional quality record, have merchandise, and tour to support their album. It takes a lot of effort, time, and money to be in a serious band. Now pretty much every band is on Facebook, reverberation, or they have their own website with a merchandise store. Your $10 will be appreciated forever and keep them running. If they act like stuck-up rockstars, then screw them. Also, let labels know who they should sign next. Labels should listen to what consumers really want next. Nothing is guaranteed in this world, but without doing something different, nothing will change either.
We must cooperate and support each other. The music industry is a simple supply and demand model, but I think now is the best time to reform the model, and start over again. Labels should look back at their legacy and think about what they really need to be doing. Artists should accept the change and see the positive side of it. The music industry’s fate depends on you all. It’s teamwork.