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Thursday, January 6, 2011

Welcome to the Music Industry, 2011: Records Don't Sell, Touring Can Make Bank, and Major Labels Are (Mostly) Useless

Posted By on Thu, Jan 6, 2011 at 12:31 PM

click to enlarge World_upside_down_01_1.jpg
For whatever reason, today seems to be the day that the music industry

reminds us that it's still in total upheaval. Soundscan tells us that

relatively few people actually bought music in 2010, unless they were fans of Eminem and Katy

Perry. Dave Matthews spent the last 10 years collecting $500 million dollars

from non-stop touring. And The Beatles get their iTunes royalties paid

directly to them from Apple, which is unprecedented. Doom and

gloom forecasts aren't new, but today's onslaught of news is

proof that any effort to salvage the existing business model might

ultimately be futile.

Sure, major record labels have been in decline for awhile, due to their inability to anticipate future industry trends. And independent artists have

been finding new ways to subvert the majors every day. But this onslaught of

news about the world's biggest musicians is a hefty reminder that major

labels are only becoming more irrelevant by the day. Here's why:

According to the Soundscan reports, many of the top 10 selling artists sold

less in a year than artists used to sell in a single week only a decade ago. While it's

not shocking that smaller artists have been hurting in album sales, the fact

that even the biggest artists aren't even selling that many (relatively

speaking) means something big is wrong.

Meanwhile, the report on Dave Matthews Band and the half billion

it earned through touring is just proof of what some artists have been saying for

years: the money is in the live shows, not album sales. Instead of

album-centered promotion for artists, maybe incessant touring is another

option. With the right combination of free music releases and media exposure

(read: song licensing), they could probably rack up just as many dollars

with more creative control.

And the Beatles deal is a whole other beast entirely. If the biggest band in

the world can get their royalties paid directly to them, why wouldn't

everyone else try do the same going forward? Now that music relies on physical

media less and less, it's looking like the labels need the artists more than

the artists need the labels. And the fact that Arcade Fire and Vampire

Weekend both debuted at number one last year on quasi-independent labels

shows that major-label-caliber marketing budgets aren't the only way to attain widespread popularity.

So really, if you were an up and coming artist able to generate sizable buzz

before signing with a label, would you go with a major? It just doesn't make sense anymore.

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