The Rebirth of the Music Industry
Philip Cacayorin
Director and Producer of Advanced Media
November 02, 2007
© P. Cacayorin 2007
www.3dvinyl.com
We learn from history repeating itself. Everyone knows there is a problem in the music industry; it doesn’t take a genius to figure that out. Bashing the major labels is an old song and reiterating the obvious doesn’t make anyone an expert. Here forward is the history, the problem and once and for all, a solution to the future industry of music and art.
Before the New Media, radio played an integral role in the music industry. Without standardized play lists, radio offered statistics that fueled industry decisions for sales, distribution and even what records were made. Once a week the radio stations would provide the sales and marketing teams of major labels with logical representations of who was listening to what, where and how much, these were known as "stats". A logical distribution of product would then be manufactured and shipped to sustainable markets in a supply and demand arena in accordance with these stats.
Artist and Repertoire (A&R) departments would have an educated guess as to what product to produce for distribution to the record stores as the primary point of sales. The marketing teams worked closely with the radio stations and sales points to sustain the markets. Without this critical information, teamwork, huge roster of artists or the ability to manufacture quantities of product on demand the independent labels didn't stand much of a chance for success. The record chains were not willing to risk their relationship with the major label distributors since they were integral to their livelihood. Historically, it was a good system that worked, so nobody tried to fix it.
In 1958 RCA developed an audio cartridge system known simply as the Sound Tape Cartridge. By 1960 it made its way into homes as an early mono cartridge format for recording family history and recordings. By 1970 it became the predominant consumer tape format and would dominate the industry for the next 20 years. In 1980, there was a surge in record sales that revitalized the record store marketplace. Although we were able to copy our vinyl discs to cassette tapes so that we could listen to them on alternative media, share them with our friends and listen to them in our automobiles as an alternative to radio, the music industry survived.
It became common knowledge in the recording industry that we were actually going to run out of vinyl and an alternative medium was on the horizon. It wouldn't be an issue of quality since most engineers knew that the new digital medium at that time didn't sound compatible to the record, and the cassette tapes were sounding great. Similar to date, we have the .mp3 medium, although it doesn't sound at all compatible to the CD master medium, the general public finds it as an acceptable medium to share and distribute among themselves.
As we entered the millennium, the government enabled large corporations to create monopolistic multimedia economic powers. With the monopolized radio stations, they disabled the record companies and empowered the corporations in the process. The corporations’ created standardized play lists to increase control, and it immediately disabled the radio stations ability to relay personalized demographic information to the major labels. When the labels lost their personalized connection with their audiences, they no longer had any idea who was listening to what, where and how much. The hope became that the general public would simply buy what they produced, so they signed just about anything and everything. Subsequently the major label business became dysfunctional as a whole and the record business logistics became obsolete.
To revitalize the industry with CD product, the .mp3 medium was originally created and envisioned as a marketing tool. It was to be used much like airplay on the radio broadcasts to entice the audiences to buy the quality CD product. Companies successful in building a personalized marketing utility with the .mp3 medium outperformed the major labels due to the exponential growth of the Internet. The corporations became disenfranchised by this success to capture what had previously been their own critical mass audiences. This new corporate generation was unable to recognize that these distribution platforms were critical to their own survival, or that they could provide invaluable personalization of their customers that would increase the sales of their CD products.
Just as we can never stop a person from holding a microphone in front of a pair of speakers to duplicate a recording, the corporations cannot stop the movement of .mp3 distribution. While .mp3 media is still not compatible to the quality of the CD format, the corporations are still unable to find their own way to captivate audiences to purchase their CD products.
The ability for artists to develop their own demographic of direct sales via .mp3 provides a profitable environment. The artist that is able to acquire critical mass, as an independent, will experience extreme wealth as an independent. Utilizing the .mp3 platform to market their product online, they can achieve an understanding of their audiences similar to the knowledge acquired via radio stats by the major labels.
The value product and marketplace for the artist today is in live performance. With the demise of what we considered to be the major label deal, the artists have inherited their own industry. No differently than standing in front of an original painting in an art gallery, a replication or print does not provide the true experience of the original art form. A recording does not replace seeing a live performance. In giving the CD studio recordings away with the price of a concert ticket, their audiences will have a tangible product as a representation of the live artist experience.
Artists of today should also recognize that the major labels were only a delivery system of an attribute of their talent, a recording. For several decades the major labels were able to create their own industry from these products that represented the artists. With this success they were able to create bigger than life representations of artists while expanding their own products into what were actually false representations of the original work, insuring that it only benefited them as a label. Notwithstanding, they couldn't do this without the artists to instigate the process.
A perfect example of the Status Quo, in November 2001, Mick Jagger's solo album sold 9554 copies on its first day in England and EMI was devastated by these sales, exemplary of the weakness of the major label process. Now in 2007, the last "A Bigger Bang" tour of the Rolling Stones grossed over five hundred million dollars in sales, contradicting the theory that people will not want to pay for an experience. Although there were several complaints that the band was quite elderly, people still came to see the performances to have the real experience. This is also contradictory to the statements that the music business is a business of youth, only pertaining to the multi-media business, which was also fabricated by the major labels in their effort to survive.
Although attractive studio recordings are a business to themselves, the most sustainable product will inevitably come down to raw talent. Musicians and performers will prevail with their ability to actually perform their work. Records, tapes and digital media are intellectual properties that are only attributes of artists, they aren't the artists themselves. We need to continue to celebrate the ability to create private enterprise with these intellectual properties as a marketing utility.
There is a new logical process for acquiring market research data
1. Continue to distribute .mp3 media as a marketing tool over the Internet and peer networks. In exchange for the free media, the audience will provide their area code to the content creator as the critical demographic. This information will provide the creators with who is demanding the media where, and how many times. A fair and equal trade for free music.
2. Using this critical demographic information, we will sell CD media that includes an incentive to the customer to purchase at the point of sale. Each CD will have a unique bar code, similar to national currency. Upon purchasing the uniquely coded CD, the customers will provide their own unique pin number establishing a personal connection with the product. Similar to an ATM machine, this pin will be unique to the customer and its relationship with the bar code will insure its personalization.
3. The bar coded CD will offer a refund to the customer upon the purchase of a maximum of two concert tickets. This model will represent a free CD with every two-concert tickets sold to the customer. As well, this will insure that an average of every two-audience members have purchased a CD. Adding value to the concert ticket and CD/Ticket model, an additional incentive of a DVD of the live concert performance can be added.
The cost of a disc and replicating it is conservative as a marketing tool and it can be recouped in this logical process. There are several layers of incentive to the customer and audience member to purchase a CD. Additionally, and profoundly this will circumvent the concert ticket scalpers and increase the revenue stream directly to the artists. By putting the focus back on the content creators, the advertising medium is no longer the end product.
In conclusion, it is possible to effectively market and distribute content in the new media format in a way that returns the lion’s share of the sales revenue to the artist, while still offering great opportunities for advertisers.
Go to Phillip Cacayorin's website now!
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Ojn April 19th, 2007, BluePower released this CD review of Watermelon Slim and The Workers. We believed in the CD then and time has proved our point. The Wheel Man just took top honors for best Album of The Year and Band of The Year at 2008's Blues Music Awards in Memphis, Tennessee.
