Ryan Sprute dot com

So I’m starting this blog back up again, this time focusing pretty much exclusively on the music industry. Also, this is going to be a lot rougher this time around - I rarely posted because I shelved most of my posts or left them in “to-edit” purgatory. This will just be a place to showcase my ideas about the future of the music industry and how to take advantage of this great upheaval.

So what will the industry look like in a few years?

-  There will be no majors

WMG and EMI (especially EMI) are NOT doing well. At all. They are ripe to merge and eventually the toxic DNA that both of these companies hold will be the end of them. I can’t say I’m too sad - I was at a music conference where a WMG rep was talking, every other word was “merch” or corporate-babble about demographics. I’m no dummy, I believe in the power of metrics, but if you are focused more on the method than the art you’ve got a big problem.

The big question is what will happen to “indies” like Sub Pop? WMG has a 50% holding share in Sub Pop, which makes them essentially a major-label subsidiary. I would be sad to see such a prestigious and important label go under, but my gut tells me they will land on their feet. After all, Sub Pop’s motto is “going out of business for the last 20 years”. Megan Jasper is a smart cookie, I’m assuming she’s not the only one. However, if they keep talking about “legacy” like it means anything to anyone besides other industry professionals and young bands wanting to get signed (ahem), it’s gonna hurt them.

- Artists will regain control over IP

The centuries-long injustice of corporations owning intellectual property will soon coming to an end. In Britain they’ve recently started a label that allows artists to own their own copyrights. This IS the future of record labels, I am absolutely certain of it. There are simply too many options for artists for them to foolishly let go of their most valuable card. Actually, it’s not even foolishness, there simply hasn’t been any other way before now.

The internet has allowed artists to directly connect with fans in a way unlike any other time in history. This has allowed the rise of the musical middle-class, who may never be rockstar-rich, they will be able to live comfortably while making their art on their terms.

That’s it for right now, but stay tuned for more.

My music industry predictions for 2009, hopefully at least one will come true so I don’t get totally embarrassed and feel so STUPID. Gawd. Anyway:

- Cloud-based music services will grow in popularity, and Songbird will rise as a serious contender to iTunes. Subscription services will also rise, hopefully in concert venues as well. However, major labels will fail to innovate and see their margins shrink even more. Apple will also lose the near-monopoly they have on digitized music sales.

- Sub Pop will gain a boost thanks to the popularity of Fleet Foxes, but unfortunately Portland will become even more competitive and maybe even surpass the Seattle music scene. Fuck Portland. Thanks a lot, Greg Nickels.

- Ticketmaster emerges as a competitor to Live Nation, with 360 deals and major artists on board.

- Two majors will merge to become one even shittier company, my guess is EMI and WMG.

- Grizzly Bear will blow up, and the indie/art rock scene in New York and similar bands will steadily gain more mainstream exposure. My band will not.

I reread two exceptional pieces by Umair Haque about the music industry, and it made some of the stuff from the GrammyTech conference make more sense. There’s no doubt the music business is in dire straits, but the music industry has an opportunity to do great things for fans, yet that seems to be the last thing on every executive’s mind. Ironically, a lot of the tactics major labels are using do nothing but accelerate their losses.

The business model of all the majors is to go for the short-term and easy money instead of fostering a fan base. They target an audience that will buy the single, then never listen to the band/artist again. They go for the quick cash.

This stems from the problem of being a publicly traded company. The scenario goes like this: majors will project their quarterly earnings for the shareholders, but one of the hardest things in the world is to predict when art will be ready. Then Clive Davis and the like come in. He is the master at taking soulful, great music, removing all of its character, then taking the base elements of what works and applying it to a TON of songs. This is how you get boy bands, pop stars, any manufactured acts. They take music and try to put it in a formula, but unfortunately, music is not inherently formulaic. Majors love hip-hop, because it’s one of the easiest genres to make (note - I said make, not make WELL. Good hip-hop is as difficult to make as any other genre).

This isn’t the only problem with the major’s business model. For as long as the music industry has been around, records have all cost about the same amount. Bob Dylan’s greatest hits and Katy Perry’s new album cost the exact same on Amazon. Gee, which album is going to be a better deal? It’s like having a broken bicycle cost the same amount as a Rolls Royce.

Umair talked about how file-sharing is not only about saving money, but about risk-sharing. So much of mainstream music is terrible, fans don’t usually want to take the risk of spending money on something that could be awful. Majors don’t understand that when they screw the fans, they only screw themselves.

Ultimately, the jobs of labels isn’t to serve the artist, but to serve the fan. Priority one should be giving fans great music to listen to. How do they do this? They foster the artist, making sure they have reached their full potential as a band. They stop indulging on things that don’t matter, like private jets, and invest in making themselves the best possible label they can be.

Labels should be thought of aggregates, people who do the dirty work of finding all the good bands, so the listener doesn’t have to. Unfortunately, the labels have not done their jobs. The myopia at the conference about “legacy” is even more apparent, because what labels don’t get is that they failed completely at being the aggregate. They failed at being THE place to get good music. Labels have fallen so far that people use their most expensive resource, time, to get good music

So, how do labels get people to stop stealing music? Focus not only on making better music, but insuring the fans. The answer is subscriptions. People should pay a base amount to download any type of music, that way they can compensate themselves for lost money and time of terrible music, by gaining great music they might have not spent the money on otherwise.

The answer isn’t to cut costs until profits are so marginalized the business doesn’t work, but to give listeners some sort of insurance that their money won’t be wasted. With a $15 album, if you don’t like it you’re gonna be pissed off. With a $15 subscription each month, you won’t care because you can download as many songs as you want. If the labels give the consumer a certain guarantee their money won’t go to waste, why wouldn’t they spend the money?

I could go on longer, but this post is long enough. In short, the major labels need to wake up and realize that it’s about the fan, even though they forgot that decades ago. I don’t have high hopes for the future of the big guys, but if the indies start turning around and fostering great music, the industry will be just fine.

Here’s an idea, why don’t we get EVERY label to jump on this label-sponsored P2P file-sharing music program (w/ subscription-pricing)? To get the label bickering to stop, put them on 2-year metric-related costs that are based on merit. Everyone wins.

Alternate idea: create an authoritative, industry approved third party rating service that directly correlates with price.

Will expound on this later.