Music Business

Who Will Save The Music Industry This Week?

6Things have certainly been looking grim for the music industry in many areas, and what exactly is needed to turn things around has a been a subject of constant debate among those in the business. This article examines several different ideas for how to save the industry, and why they may or (more likely) may not work.


Guest Post by Dave Brooks on Amplify

Remember when the music industry used to work by album and tour cycles? These days, we seem to work in cycles of crisis, looking longingly for a savior to come in and teach us how to get rich again. The problems ahead for recorded music are many — lack of money in streaming, disappearing physical album sales and shrinking dollars for everything from touring revenues to sync deals.

We can all agree the music industry is in trouble — what we can’t agree on is who can fix it. This week, the job has been given to Adele — the British singer’s album “25” will drop next month and Fortune magazine is ready to declare it both a smashing success and a beacon of hope.

“In the world of Spotify, YouTube, and Apple Music, artists who can actually convince the public to pay money for music are few and far between,” the article declares. “Adele is one such rare moneymaker.”

Does the music industry need saving, or is the media latching on to the latest music business meme? Below we look at nine other moments this year when the media has flirted with a new messiah for to resurrect album revenues.

9. Human curation might save the music industry

In March, a panel at the South by Southwest conference in Austin explained, quite bluntly, that “Curation Will Save the Music Industry,” publicly positing that society still needs “human editorial guidance in times of algorithms and automated recommendations.” Panelists like Tim Stickelbrucks from St. Elmo’s Entertainment, Raveonettes and Dum Dum Girls manager Scott Cohen and Rdio’s SVP of Product Chris Becherer came together to warn that there are two many choices for consumers and not enough music discovery pathways to connect new artists with fans. The solution? More tastemakers to help music lovers wade through the content.

Why this makes sense: There’s no doubt we’re inundated with new music, and music listenership is more crowded than ever. As the streaming world finally begins to consolidate, it makes sense that a new generation of tastemakers, blogger, and internet personalities could help fans discover previously unknown talent.

Why it won’t work: While building audiences for an act is a great long-term strategy, the music industry is set up to capitalize on hit songs and albums, which curation doesn’t address. And sure, while there are plenty of people looking for the hot new band, there’s a much larger subsection of fans that don’t care about new music and just want to hear their favorite songs over and over.


8. Will the boob tube solve our problems?

Earlier this month the International Business Times asked “Can Television Save The Music Industry?” What they wanted to know was, “Will fans listen to more music on TV?” The obvious answer is “probably not,” but that didn’t stop the paper from serving up a 1,000-word feature on the Electric Jukebox, a plug-in device that’s part Google Chromecast and part Spotify.

As the article explains, the $229 device includes “a 12-month subscription to Electric Jukebox’s premium streaming service, which includes ‘millions of songs’ as well as curated playlists that will be ad-free. The interface is very stripped-down and easy to navigate, and with its references to mixtapes and icons that look like CDs, it is clear this product’s target market is definitely middle America.”

Why this makes sense: According to the company’s own research, the majority of people listen to music at home. About half (52%) rely mostly on terrestrial radio (Editor’s note: WTF?!?), while 42% still rely on CDs and physical units (who are these people??). Company CEO Rob Lewis believes Electric Jukebox has a huge opportunity to convert millions of people to streaming.

Why it won’t work: It’s not portable and has no mobile app, and because it needs to be configured to a home WiFi network, it can’t be easily moved around from house to house (or TV to TV). Want to listen to you favorite new Taylor Swift song in the car? That’s a problem — despite its large catalog, Electric Jukebox won’t have access to some of the big hit song makers of the year, including Swift. And even if it did, it can’t plug into your car stereo.

7. Spotify will save the industry, according to Spotify

So the Guardian in the UK decided to give Swedish Spotify founder Daniel Ek his own platform to explain how he’s trying to help (as opposed to trying to destroy) the business with a June 6 piece called  “Spotify and free music will save the industry, not kill it.” In a rare interview, Ek said he will help music industry revenues grow tenfold and noted that his company has already paid out $3 billion in royalty payments to artists.

“The old-world paradigms we used to have are no longer true. When I think about music in the future, I don’t make a distinction between what’s radio, what used to be the music library, and so on,” Ek said. “It’s only going to be listening – and, as that goes forward, this old notion of these different industries or different competitors will collapse and merge together.”

Why this makes sense: Total music industry sales worldwide hover around $14 billion to $15 billion annually, while the radio industry in the US alone is around $16 billion in revenue and $80 billion worldwide. “That’s four times the size of the music industry,” said Ek. “If we’re able to transition the traditional radio behavior online, you’re looking at a music industry that’s much larger than it’s ever been. If you do that, and also add subscription to the mix, especially at Spotify’s conversion rate, you’d be looking at a music industry that would be $100 billion to $160 billion in size. That’s the key argument that I think gets lost here.”

Why it won’t work: Taylor Swift, Apple’s $200 billion and a lack of a patience and strategic vision from major players like Universal. If Ek’s master plan to grow revenues is more radio-style advertising, then big labels won’t buy in.


6. The guys in Cupertino will have to save music

You’ve got to hand it to Apple for saving recorded music while also destroying the record store’s retail network. But even Apple’s iTunes platform seems dated in this age of streaming, and on June 9, the Washington Post announced, “In turmoil again, music industry once more looks to Apple to save it.” Apple’s new Beats Music service aims to reverse the trend of ad-supported music by requiring all users to pay $10 a month and not offering a “freemium” option funded by commercials.

“We are at an important inflection point of the evolution of music,” according to Larry Miller, a professor of music business at New York University’s Steinhardt School. “After more than 15 years in digital music transition . . . only Apple has the potential to push streaming — paid streaming — into mainstream adoption.”

Why this makes sense: Streaming subscription services pay seven to one compared with ad-supported systems, and many of the world’s largest superstar artists are embracing the Apple platform.

Why it won’t work: Apple Music sucks. It’s clunky, it’s difficult to personalize and configure and now no one wants to use it.


5. Taylor Swift, if you’re available, please save us

Before Taylor Swift can teach us how to save ourselves, she needs to teach us how to love … ourselves. In an op-ed in the Wall Street titled “For Taylor Swift, the Future of Music Is a Love Story,” the singer writes, “In my opinion, the value of an album is, and will continue to be, based on the amount of heart and soul an artist has bled into a body of work, and the financial value that artists (and their labels) place on their music when it goes out into the marketplace.

“The way I see it, fans view music the way they view their relationships. Some music is just for fun, a passing fling (the ones they dance to at clubs and parties for a month while the song is a huge radio hit, that they will soon forget they ever danced to). Some songs and albums represent seasons of our lives, like relationships that we hold dear in our memories but had their time and place in the past. However, some artists will be like finding ‘the one.'”

Why this makes sense: Taylor’s “1989” album has sold 5 million times, and she’s made untold millions on a massive world tour that included a five-night run at Staples Center, where she holds the all-time record with 16 sellout concerts.

Why it won’t work: There’s only one Taylor Swift. And we need about 50 to get ourselves out of this mess.

4. Can door-to-door sales save the music industry?

Dublin artist Daniel Anderson spent all his money producing his album “Patterns.” Without a label or distribution deal, he decided to go door to door around Ireland and try to sell his new album to his neighbors (followed by a camera crew).

Why this makes sense: While Anderson faced plenty of rejection, he also connected with folks who seemed intrigued by their chance meeting with a musical artist. Although they knew virtually nothing about Anderson, they were willing to give the young man a chance because of the personal contact he made.

Why it won’t work: Try going door to door in LA … you’d get chased out of my neighborhood in about five seconds. But one-on-one street sales still happen every day —  visit Hollywood and Vine, or Times Square, or Haight and Ashbury. Every day there are folks on the corner trying to sell mixtapes and CDs, especially in the hip-hop community. Is it a path to riches? No. But it certainly is an honest hustle and a good way for artists to get out and talk to people (and hit on girls).


3. Kim Dotcom once had a crazy plan to save the music business

It’s a little surprising Kim Dotcom was even able to get a meeting with the folks at Universal Music in 2012. Dotcom was the creator of Megaupload, one of the world’s largest file sharing sites and a frequent target of record industry executives who accused the site of making millions of songs available for illegal download.

But in 2012, Dotcom had a rare phone meeting with Universal’s former global digital business president Rob Wells to discuss Megabox, his answer to the woes of declining earnings in the music industry. According to a Sept. 7 article titled “This Was Kim Dotcom’s Crazy Plan to Save the Music Business,” the German-Finnish entrepreneur wanted to require Megabox users to utilize a program called “Megakey” that would have prompted users to install a small program on their computers. The software would then monitor the computer’s entire network traffic, intercept advertising from third-party websites and swap out 10 percent of all ads for advertising from Dotcom’s own ad network. ‘We are basically using the principle of an ad blocker, but instead of making it blank, we replace the ads,’ Dotcom said during the call.”

Why this makes sense: Even though Megaupload was reviled by the music industry, Dotcom knew he could deflect the industry’s pettiness onto an even bigger mark: Google. Major label executives have long decried the search engine for linking to pirated material, and Dotcom’s plan was to target Google for ad blocking. “If we were to do a partnership with UMG, we would advise to only, for example, in the start replace ads that are being served by Google,” he can be heard saying, arguing that Google had been a big beneficiary of piracy. “Replacing ads from Google would be a fair thing,” Dotcom said in the meeting. “You are basically charging a little tax for all the benefits that they have with your content.”

According to Variety: “That line of thought apparently went over well with the people on the other end of the call. ‘I completely agree,’ Universal’s former global digital business president Rob Wells can be heard saying. Later in the conversation, Universal’s executives muse that it would be good to have a ‘white list’ of sites that aren’t targeted for ad replacement. ‘But Google will not be on that list,’ Wells can be heard saying, followed by laughter.”

Why it won’t work: A few days after the call, Megaupload was raided, and Dotcom was arrested by New Zealand authorities. He is currently fighting extradition back to the United States to face charges of racketeering, copyright infringement, and money laundering. Megaupload was shut down and the company’s music service was eventually renamed Baboom. It has given up on its ad injection plans and ended its affiliation with Dotcom.


2. What about weed?

The problem with record stores is that they sell mostly sell records. People don’t want to buy physical music anymore. But you know what they do want to buy? Weed.

Yes, pot — and what better place to sell weed than at a record store? According to the East Bay Express article “Can Legal Weed Save the Music Industry?” Amoeba Records is one of five applicants for a permit from Berkeley to open a medical marijuana dispensary in the East Bay city. If the famous record store brand with shops in San Francisco and LA wins the permit, it will open a dispensary inside its Telegraph Avenue flagship store. Amoeba rents out space to a dispensary in its Haight Street store in San Francisco, but having its own dispensary inside the Bay Area store would enable Amoeba to sell marijuana, edibles and all sorts of in-demand pot products.

Why this makes sense: Selling weed at a record store seems pretty surefire to me. Californians are likely to vote on recreational legalization in 2016 and many pot entrepreneurs are jockeying to make millions if the initiative passes. Bring them in for the weed, get them super stoned, and then sell them all kinds of stuff. Not just records, but sneakers and headphones and limited edition bobbleheads from the third season of Big Bang Theory.

Why it won’t work: Slippery slope, bro. The jazz section is being moved to make way for the dispensary. What’s next, Americana? Why the hell would you sell records when you could be moving mass quantities of the sticky-icky? First it’s jazz, then classical music, then doo-wop and blues will all eventually be replaced with weed cookies and hash vaporizers. Eventually the only albums you will be able to buy will be Snoop Lion’s LP and the box set with Widespread Panic.


1. Save us, France!

French is the international language of diplomacy, so it’s only appropriate that France’s Minister of Culture and Communication Fleur Pellerin would introduce an official Code of Conduct for the music industry.

Signed by major and independent French labels, publishers, streaming services, and artist managers and agents, the code calls for “the creation of greater transparency” and “fair distribution of value created by musical recordings.”

In his article “7 Ways To Fix A Broken Music Business – By The French Government,” Music Business Worldwide writer Tim Ingham analyzed the seven key objectives of the code, like supporting the “development of legal music offerings” and promoting best practices for contracts and payment advances.

On Objective 5’s goal to “ensure fair remuneration for artists,” Ingham writes “one big development is that labels appear to have agreed to give artists a minimum revenue guarantee ‘in consideration for the digital usage of their recordings.'” He later adds, “And there’s also big news when it comes to royalty statements. Labels have agreed to report royalties to artists in a form that is ‘transparent, understandable and can easily be used by artists and their managers.'”

Why this makes sense: The pact encourages all stakeholders to stop fighting each other and work together to grow the pie. By signing transparent deals with artists and good-faith agreements to collaborate and share, the music industry can usher in a new era of cooperation that will allow it to unite against its common adversaries.

Why it won’t work: Who are we trying to kid here? This isn’t a summer camp, this is the music business!


Dave Brooks has over 15 years experience as a writer, including eight years as the Managing Editor of Venues Today. He started Amplify in 2014 to give the industry its own voice and turn up the volume on live entertainment.

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