“Free Music Is Always Going To Win,” Says Lee Parsons, CEO of Ditto Music; Interview Part 1
Recently, I spoke with Lee Parsons, who is currently the CEO of Ditto Music. As of midsummer, they were distributing around 12,000 artists online and had 7 UK top 40 singles with unsigned artists. In this interview Parsons talks about the record industry's attitudes toward technology, why labels have trouble seeing value in disrupts their core-business model, and what's just over the horizon.
How would you characterize the old record industry's attitude toward new technology how does it differ to that of the next music business?
Lee Parsons: Whilst the traditional record industry is always criticized as being slow to develop, the evolution of an industry that relies entirely on consumers should only truly develop at the rate of its consumers. Unfortunately consumer development has increased one hundred fold in the last 10 years making it increasingly difficult for labels to keep pace.
Instead of embracing new technology, majors spent most of the early 00's trying to battle against it in the hope physical sales would recover. To sit down and tell a music industry professional of 40+ years experience that everything he built his foundations on is now redundant is not an easy thing.
"While they are arguing against it, young people with no prior experience of the recording industry can look into it from
a fresh angle and have adapted it into a new model."
It is no coincidence that digital companies are making millions out of music, record companies are not. I have taken on two staff direct from Warner Brothers this year but they certainly weren’t corporate executives. They went form Warner brothers where their job was to make new income streams out of back catalogue, to Ditto where they were making new income streams from NEW music.
They certainly weren’t hanging on to the old model for dear life like their bosses. Warner’s have since made 40 redundancies in that one department and continue to look to back catalogue to improve finances. Unfortunately new technologies on the market are favoring the consumer, so labels have ultimately a hard time embracing something that is contributing to their downfall.
Why does this the traditional record industry have trouble seeing value in anything that potentially disrupts their core-business model?
Lee Parsons: Record companies cannot look into problems from a fresh, artist based angle. Problems are often solved but not in the way they were intended. For instance, Facebook began decades ago as a printed manual of College students and faculty. Through the expansion of Web 2.0 itself, a consummate of available web technologies and techniques, this became the phenomenon it is today. It could well be the future of music, we don’t know.
Shawn Fanning created Napster firstly for his own purpose. The new music models embrace as much technology and revolution as they can contain in a chaotic attempt to find a new and better path. Revolutionaries are prepared to make mistakes on the way; labels do not have this luxury. Many battles win a war, likewise through constant chaotic growth, development will come. Developing a new model for a major label is fuelled with risk so it is more likely they will continue to look for ways of containing technological advancement rather than embracing it as a new way of income.
Would the traditional industry be better off if they let any would be revolutionary try anything they like with new technology? Are there other ways in which the industry might be worse off?
Lee Parsons: The labels by being at war with the revolutionaries set themselves up as “The Bad Guy.” Major label fat cats aren’t going to convince a 9 yr old kid that sharing a song is wrong just because it affects their jobs.
"People LOVE free music. Free music is always going to win."
By continuing with their argument instead of reaching out to new technology they push themselves even further behind in public opinion.
Unfortunately it isn’t as simple as the “home taping will kill music” argument they thought it might be because the advancement of technology has overtaken even the revolutionaries’ expectations. For a new generation of people music is now free. You CAN’T fight that.
The record labels, the companies who PRODUCE the music are going to be the last people to launch a subscription model service. Artists like Prince had one of these nearly 10 years ago. They have no streaming service of their own. Over the last ten years labels have not changed anything and in turn they have not managed to prevent any technologies from evolving. Why were they not implementing these features themselves? They clearly should have embraced change rather than try to stop it.
What new technologies on the horizon have the potential to induce more chaos the traditional record industry can withstand?
Lee Parsons: There is nothing stopping iTunes or Google wiping the floor with the traditional record industry. They have their own delivery systems, their own promo tools with the widest reaching worldwide platform.
"The only thing they do not currently do is actually sign artists."
There is nothing stopping them doing this but why should they? It will only occur once they partner with a forward thinking revolutionary with a passion to build new structure. Hopefully they will have learned from the mistakes of Myspace records.
Once delivery, sales and social media are entwined we will move into an up to date model. In my opinion, in 10 years time Google and iTunes and companies like myself will own most of the recording industry as we know it.
I would rethink the argument that free music instantly wins. Frankly, there’s too much free music today that it’s diluted the market to the point free doesn’t excite. And if you’re not Kanye West’s G.O.O.D. Fridays, there is not much incentive to download your free music when everyone else is giving it away. Ask the dozens of unknown artists that tried giving away their music for free online, but have yet to break through that recognition barrier that exists.
This confuses me. He says “Free music is always going to win,” but it doesn’t sound like he’s talking about free music, as Ditto Music seems to be about letting lesser-known bands sell their music digitally, and the Ditto Music web site talks about bands earning “110% royalties on sales” (somehow). I may be misunderstanding something, but it sounds to me as if a lot of folks attempting to carve a space for themselves in the digital music marketplace try to have it both ways, pushing the “revolutionary” idea that music is “now free” and then also assuring bands they will be making money from their music. And of course the distributors etc themselves are hardly in it for free.
Also, I think we’ve had enough of the trope about “major label fat cats.” Not that they don’t exist, but it’s a reductive and misleading meme when used to stand for the entire universe of record labels. I’d venture to say there are far more earnest, hard-working, well-intentioned folks working at independent labels providing valuable support to their artists then there are “big label fat cats” in the world.
I don’t think free music wins in the long run. Several studies have shown that when people get something for free they value it accordingly. Therefore, you’re not going to get a real fan, someone you can sell merch and tickets to, and develop a long term relationship with if you’re giving it away. Give away a track or two, and make them pay for everything else, even if it’s inexpensive. They’ll value it more.
I dont think his argument here is that artists should just give away all music for free , more that its pointless trying to fight the piracy aspect. Its interesting that labels have still done nothing to react to things like torrent sites apart from try to shut them down.
Your fans will always ( hopefully ) pay for your music and yes, give them a free track and keep them interested, but then to the other people who download your music without paying, embrace it, find their details, get them to a show, make the revenues out of them another way
Lee Parsons talks a lot of rubbish. He has been bragging about 7 top 40 hits since 2008 when he was at midem….that means he has not had a hit since with his aggregating service. Good music is still selling, look at Paolo Nutini and Mumford and Sons, there albums ahve been doing 15000 paltic units a week for yonks….Plan B has sold 600,000 plastic units. There is still huge amounts of money to be made, they just need a smaller workforce. Look at Sony its so cash rich due to Michael Jackson dying. Syco made about £40,000,000 profit, from Susan Boyle first album and is going to do something similar with her second album. This is plastic sales, she sold 6,000,000 copies in one month! A month!….outsold Lady Gaga album sales in a month. Yet doesn’t get put forward even for a brit award as she is not cool. Epic UK have a policy of signing two acts a year, how can you fail???
The big boys, have been re-developing their model…..but their is still plenty of cash to be made, succesful businesses reduce overhead its called creating an efficient business.
So ‘Ray’, seem to have a vendetta eh?
How’s about sticking to the subject and maybe tell us about YOUR Top 40 hits???
If you were at Midem in 2008 i presume you are in the music industry?
I am a musician not a rock n roll secretary but it often feels like it these days! I also dont believe that Lee is being wholly literal with this free music controversy. I will give away the occasional demo song. I have also been given free music and if its good I certainly wont trash it. F**K YES I wanna make money for my talents but a ‘struggling musician needs recognition’. From my new song ‘Skullduggery’… i never miss a trick 😉
To achieve recognition you need to either have big cash for promo, literally sleep with big industry devil (ooh, controversial)OR grow a pair of your own horns! So while I would appreciate big industry funding I would need to be firstly recognised, then secondly recognised as an autonomous indiviual on my own terms (isty compromise considered, ha!. I release on Ditto Music and this is in no way me kissing bum cheeks! Hell, I could be digging my own grave for not walking a straight line if a music bigwigger reads this. Just as well I’m a fan of Tim Burton’s Corpse Bride then, which strangely, now I think of it has some parallels to an artists struggle in the industry…I digress.
Ok, This is how i see it. Hegel. Without getting too DEEP. Wot he said was. In Human relationships there are Master/Slave dynamics. In order to become a fully conscious human you needed to be recognised first. The only way to be recognised is for one to submit to the other. Hence, the battle begins. The battle starts off as a fight to the death. PROBLEM! (ala destiny’s child, stay with me it gets good ;). Trouble is, if one dies, the other won’t have anyone to recognise them…SO ultimately to become truly fully conscious, one must submit to the other. One becomes the Master, The other a Slave…
But here’s the bit I love. While the Master is sitting in his dominion the slave goes on to create and build the world. The Slave eventually becomes more fully conscious than the master in doing so.
This is merely a paradigmn shift in musical Industry enlightenment guys … *Cheshire Cat Grin*…
Watch me dissappear and reappear dancing like no-ones watching…cos no matter how soul destroying this industry can be…i can still dance, sing, create.