Major Labels

Sillerman Says Major Labels Are History

From CelebrityAccess MediaWire  – Robert F.X. Sillerman (the man who brought us concert giant Rsillerman240605 SFX/Clear Channel/Live Nation) has once again shaken up the entertainment industry, this time with a simple statement: “The music industry distributors cling to a business model that not only doesn’t make sense, frighteningly, it’s now not necessary.”

Sillerman’s comment, made earlier this month at the Billboard Music & Money Symposium at the St. Regis Hotel in New York, stopped short of declaring the death of the major labels, but came close enough to spook them.

“The myth of major distributor muscle is going to end,” he said, according to New York Newsday. “Tomorrow’s creators won’t seek or need traditional label or radio support because they and their audience never wanted it needed it for validation. If that next generation’s star – from a generation reared on the power of the Internet, peer reviews, downloads and online communities, etc. – wants to sell music, they may be able to do that without a traditional record deal and they know it.”

(Editors Note:  Sillerman is currently rolling up a multi-faceted media company including such assets as the Elvis estate and American Idol.)

Newsday referred to Sillerman’s vision as “undoubtably correct,” but pointed out that the majors could “save themselves from extinction.”

Following the hype of Def Jam artist Ne-Yo’s “In My Own Words” selling 301,000 copies to debut at No. 1 on the Billboard charts, the paper examined the traditional, but expensive, publicity drive on radio and video channels, full of high-profile appearances and promos. Def Jam decided not to release Ne-Yo’s single, “So Sick,” to internet retailers until the album release, however, which the company viewed as the main factor for the album’s huge release.

The No. 3 album on the charts, however, struck an impressive chord for the indies.

Hawthorne Heights, an emo-rock bank that sold 114,000 copies of its “If Only You Were Lonely” album on the independent label Victory Records, used the strength of word-of-mouth advertising and Internet marketing. A similar sensation was that of the virtually unknown UK act Arctic Monkeys, whose first pressing nearly sold out in its first week.

Victory Records rallied Hawthorne Heights fans with an email on the night before the album release, saying “Independent needs to beat Major tomorrow. If all of you take action we can create history. Your support means everything to us and is the most valuable thing that we have. …You hear our voices every night. Now, we need to hear yours.” –by CelebrityAccess Staff Writers

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  1. Sorry, but he’s wrong. Very wrong.
    What sells the most records? TV and radio.
    People will gravitate to what is popular, and they’ll continue to use TV and radio to discover new music. Yes, the Internet is going to be the key marketing channel in the next decade, but who’s to say the majors won’t dominate Internet marketing just as they’ve done with TV and radio. (Case in point: Do you see any indies breaking big through with AOL music? I don’t. I see a bunch of major label artists getting exposed to huge audiences in a way that parallels the MTV push such an artist would have got ten or 20 years ago.)
    Ask Victory Records. Fuse was playing the crap out of Hawthorne Heights’ video, and during commercial breaks there are non-stop spots for Victory Records’ releases. (Being home sick and able to watch daytime TV opened my eyes to what’s truly selling records to teens.) Yes, Victory’s success has to do with word of mouth, touring and street teams, but that only gets you so far. TV, radio and getting into bed with Best Buy will take a label like Victory to the next level.
    As for the Arctic Monkeys, the band didn’t hit the charts until it was signed to a little label called Domino, the freakin’ home of Franz Ferdinand. File sharing helped raise awareness, but let’s not forget they were signed to a powerful indie label. (And indies have more success in the UK than in the States.) So what’s changed? The floor has been raised, the ceiling has come down a bit, and most artists are racing, struggling to reach the middle.
    Forget the long tail. It’s not going to be as impactful as people think. Stars will be stars, majors will be majors, and Mutt Lange and Scott Storch will still make songs that sound better than that crappy bedroom recording at the far end of the longtail.

  2. What sells the most records? TV and radio.
    Posted by: Glenn | Tuesday, March 28, 2006 at 09:32 AM
    Sure if your music taste consists of Bruce springsteen and U2. But look around the net (ie. the music freaks, the active buyers) What music are they talking about?
    Does anybody even bother pirating Mariah Carey or Britney spears aside for joke value? No. Nobody does.
    The big record companies is milking the last wave of audiances. that’s about it.
    The new generation of audiance doesn’t even take MTV seriously anymore. The most cutting edge music (ie. the next stars that make music scenes 5-8 years from now) are not on MTV or clearchannel radios.
    Yeah yeah yeahs, clap your hands, gogol bordello, etc are all local, indie labels, festivals, internet driven. …
    Music scene is still about good music. And the good musics are not on Radio and TV anymore. They all sound like muzak to everybody who cares and buy music regularly.
    one example: see chart. Does it even resemble Billboard chart at all?

  3. “Does anybody even bother pirating Mariah Carey or Britney spears aside for joke value? No. Nobody does.”
    That’s not what Big Champagne is reporting:
    This argument is getting old, and has *always* been wrong. The bottom line is that the top songs traded on P2P always seem to reflect the Billboard charts, and Billboard reflects the artists that are getting the most radio and TV exposure.
    It’s cheaper and easier to release music but the rules for getting noticed haven’t changed. The majority of people are still going to gravitate towards aggregators, whether it be MTV or Pitchfork.
    The acts that can afford to throw around enough money so as to appear everywhere are going to have a much easier time reaching that critical mass of fans that can eventually support them. That money has to come from somewhere.

  4. Major charts vs. net survey. (note, just quick scan, not a systematic look. I am surprised nobody has generate a full composite chart on the net. That type of chart will be the hottest information ever.)
    CMJ NMR ISSUE 955 , Radio 200
    1 NEKO CASE Fox Confessor Brings The Flood Anti
    2 BELLE AND SEBASTIAN The Life Pursuit Matador
    3 ARCTIC MONKEYS Whatever People Say I Am, That’s What I’m Not Domino
    4 CALEXICO Garden Ruin Quarterstick
    5 MOGWAI Mr. Beast Matador
    6 GOLDFRAPP Supernature Mute
    8 STEREOLAB Fab Four Suture Too Pure
    9 CAT POWER The Greatest Matador
    10 DESTROYER Destroyer’s Rubies Merge
    1 Prince
    2 Soundtrack High School Musical
    3 James Blunt
    4 Barry Manilow
    5 Ne-Yo
    6…whatever. (this list is not even worth pasting. walmart has hipper list than that)
    top Swaps
    .: Top10 (all) .: March 20, 2006 to March 27, 2006
    #01 #01 Ne-Yo So Sick .
    . .
    . .
    . #02 #02 Chris Brown Yo .
    . .
    . .
    . #06 #03 Up Nelly Grillz .
    . .
    . .
    . #05 #04 Up Beyonce Knowles Check On It .
    . .
    . .
    . #07 #05 Up Busta Rhymes Touch It .
    . .
    . .
    . #09 #06 Up Fall Out Boy dance, dance .
    . .
    . .
    . #04 #07 Down Sean Paul Temperature .
    . .
    . .
    . #12 #08 Up Bow Wow Fresh Azimiz .
    . .
    . .
    . #15 #09 Up Jamie Foxx Unpredictable .
    . .
    . .
    . #19 #10 Up Mary J. Blige Be Without You .
    HypeMachine popular tracks:
    filter top seller,,2904,00.html top seller

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