Friday, June 20, 2008

Record Labels Struggle While Artists Thrive

A new report from IBISWorld paints an interesting picture about the future of the music industry. It points out that, while record labels are struggling in light of the increase in digital downloading and Internet consumption, artists are actually thriving. And why wouldn't they be? They now have a clear line of communication between them and essentially an entire world of music lovers.

"Having initially fought downloading, rather than looking at ways of legally exploiting and profiting from it, record labels are now finding themselves playing catch up," said George Van Horn, Senior Analyst at IBISWorld.

Indeed, what's happening is that new and emerging artists are harnessing the power of the Web to promote their music, and in turn, profiting directly from their own music distribution, since they own the rights to it.

"Digital technology makes it easier to artists to dispense with record labels and publishers," Van Horn frankly stated.

While this may be true, artists will still need someone with good business sense that can steer them toward the right avenues of distribution, whether it be via ad-supported Websites, pay download online stores, or yes, even the creation and distribution of physical CDs. Eventually, the mass craziness that is music all over the 'net will require some proper management. Whether it's a record company, an independent label, or just simply an agent, remains to be seen.

Related to this, IBIS has an interesting perspective on how digital downloading can actually help the music industry, rather than harm it. "Overall demand for music may actually increase as more fans access music by artists they were previously unaware of, creating opportunities and possibly increasing the value of assets held by the industry."

I never understood how record companies could frown upon mass exposure of an artist via the 'net. Isn't that what you're attempting to accomplish in the first place? To get this artist's name "out there"?

Another interesting tidbit of information: reportedly mobile phone ringtone licensing has the potential to become one of the biggest money-making ventures for the music industry. Who knew that the invention of the polyphonic ring tone could pay the rent on that mansion that the latest pop sensation just paid millions for?

The reality is that the entire music landscape is changing, and the sooner all involved realize this, the sooner everyone can profit from the changes instead of trying to prevent them.

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2 comments:

Dan said...

Finally, the industry is catching up to the consumer. I have aid for years that I would gladly pay the artist the $2. they make...it's the $12. that the others make or spend that I object to!
The internet has resulted in me listening to more music and new artists than ever!!
Danno

Dan said...

Finally, the industry is catching up to the consumer. I have aid for years that I would gladly pay the artist the $2. they make...it's the $12. that the others make or spend that I object to!
The internet has resulted in me listening to more music and new artists than ever!!
Danno