Did Choice Kill the Major Labels?
I just got done reading a great post over at the Lefsetz Letter that suggests that “piracy didn’t kill the major label business model, choice did,” and I’m inclined to agree.
Even as new technology is finally giving the power of choice back to the people, the major labels are quietly trying to keep their stranglehold on every viable distribution channel. They’re currently putting forward legislation that will effectively shut down all but the largest internet radio stations with new licensing fees that are out of reach for most internet broadcasters. They refuse to bring down the price of CDs and digital downloads, even though consumers, pretty much across the board, have expressed price as one of the major reasons they don’t buy more music.
What they don’t understand is that people really want more choices and we’ve reached a technological threshold where it’s going to be very difficult (if not impossible) to ever take it away from them.
In order for labels and artists to be successful, they need to give people what they want. Whether it’s DRM-free digital downloads, cheaper CDs or more selection on the radio, the customer now has the upper hand and won’t hesitate to get what they want from “alternative” sources if the majors refuse to play along.
I don’t really think that many people will continue to refuse to buy music as long as you give it to them in the formats they want and make it very easy to buy. Label executives are so busy worrying about ways to protect their content, they don’t realize that the only thing they’re protecting it from is actually being bought.
From the article:
Music production is cheap. And there’s no cap on the number of acts in the marketplace. Sure, hype is expensive, which is why most indie acts let their audience do the selling for them, which is now possible with new technologies. Furthermore, the more you market, the more you try to become ubiquitous, the more your core, the revenue-generating machine that you depend on day by day, gets turned off. Become a huge star, and you’re probably finished. Then again, if you grow organically over a decade, no one complains. But the point is you no longer need the major label as a bank, as a marketer, you don’t need that much money and your fans do so much of the work for you. How do the majors compete in this new landscape? Good question.
i agree in some aspect but i think lowering prices won’t do much. i think that as long as you have ways of downloading music then that will be the way people will do it. i think sometimes to much choice for some is intimidating.why go to the shops and buy it when i can download it and have it in my hands in 20 min. so for me the internet will be the death of the record labels.
I guess I’m looking at it like this:
If there was a way to *legally* download an entire album with one click, at a reasonable price and I get all the songs in a high-quality unprotected format, and maybe even a bonus feature or two like a behind-the-scenes video or cool PDF with the lyrics and liner notes… I’d much rather buy that than to look around on LimeWire or whatever trying to make sure I get all the songs and that all the files are good quality.
I know you can search the torrent sites for “[band name] discography” and download every album they’ve ever put out in one click… for one, I don’t want to wait that long - for a band with 8-10 albums you’re looking at a pretty big package - and for two, it just feels wrong to me.
I’ve downloaded plenty of albums before, but downloading the entire Led Zeppelin catalog… you’ve gotta know there’s something wrong with that. Maybe they’re a bad example since they won’t have to worry about money any time soon. But for younger bands, I really think it’s important to show your support and pay for their music.
The problem up until now has been that the labels seem to want to make everything very difficult which turns people off. If it were a lot easier, and didn’t leave a bad taste in your mouth, I think a lot more people would be willing to buy music.