Another Trend? Music industry on verge of collapse

[AxelM]

Radiohead frontman Thom Yorke is warning the music industry is on the brink of collapse, insisting young musicians should resist signing record deals because the major labels will "completely fold" within months...In an interview for a new high school textbook called The Rax Active Citizen Toolkit, which aims to inspire youngsters to become more politically literate, Yorke claims the music industry is on the verge of a major crisis and could collapse completely within "months"...He says, "It will be only a matter of time - months rather than years - before the music business establishment completely folds. (It will be) no great loss to the world."http://blogs.chron.com/celebritybuzz/2010/06/radiohead_frontman_music_indus.html

Should this come to pass, I guess every music station would be doing an OLDIES format.

 

[landtuna]

I'm assuming the writer means pop music only because the other genre's don't show many signs of collapse.

As it is, most pop is in the form of videos anyway as the music sounds pretty much vanilla. I would guess the "music" won't be missed except by teeny-boppers and twenty-somethings.

 

[TheBigA]

I'm assuming the writer means pop music only because the other genre's don't show many signs of collapse.

He's talking about the business. We've all known the labels are struggling. People have stopped buying CDs. They share music files with each other, and so a large amount of music is shared rather than bought.

Everyone loves music. Lots of genres are very popular. They just don't want to pay for it. And now the concert business is heading into the toilet. People are quite content to skip concerts, and watch TV. I agree with his assessment. Unfortunately, the labels believe the solution is to charge radio stations 15% of their revenues for the use of music. Why would radio stations pay money for something their listeners don't want to pay for? How does that work?

 

[ironman]

The labels need to reduce the price of CD's and people would still purchase them...
No one wants to lay out $9 - $11 dollars...

 

[TheBigA]

The labels need to reduce the price of CD's and people would still purchase them...
No one wants to lay out $9 - $11 dollars...

I've been to seminars where this has been discussed. The problem is that their hard costs add up to more than $9 per CD.

 

[landtuna]

The problem is that their hard costs add up to more than $9 per CD.

I'd love to see a breakdown of those "costs". My guess is that the hard costs are not that high but rather the soft costs of contracts, promotion and the like drive up the cost.

For must of music history recordings have been advertisement for the musician's live performances. Then everybody got greedy and prices for albums/CD's went through the roof and the music (pop anyway) got really lousy. Along came the Internet, peer-to-peer file sharing, digital downloads (with the ability to create music in your own home) and *poof* the exclusivity vanished. The genie is out of the bottle and isn't going back inside. If the labels want to remain in business they need to find a way to price their product in line with what people want to pay. Pure and simple.

A few years ago I bought a New Age CD from a popular artist - about $22. The music was great. The A&R sucked big time. I thought I might have gotten a bad CD so purchased another from a different source. Guess what - same exact poor A&R. I wrote the label asking what was wrong with their product. Never got an answer. Do you think I will drop another $22 anytime soon?

 

[TheBigA]

For must of music history recordings have been advertisement for the musician's live performances.

The problem there is the record label doesn't share in the profits from live performances. The only thing the record label makes money on is the physical recording. There have been moves by some labels to attempt to share in the concert money, but artists have been hesitant to let that go.

The labels know very well that their price is too high, but they're powerless to get all the various people involved to cut their prices.

 

[w9wi]

He's talking about the business. We've all known the labels are struggling. People have stopped buying CDs. They share music files with each other, and so a large amount of music is shared rather than bought.

Everyone loves music. Lots of genres are very popular. They just don't want to pay for it. And now the concert business is heading into the toilet. People are quite content to skip concerts, and watch TV. I agree with his assessment. Unfortunately, the labels believe the solution is to charge radio stations 15% of their revenues for the use of music. Why would radio stations pay money for something their listeners don't want to pay for? How does that work?

It begs this question though... if the labels *do* fail, what is radio going to do about music?

IMHO the radio industry needs to start thinking about getting into the music business. Not completely replacing the labels (we've already proven that's not financially viable) but recording enough to ensure there's something decent to play -- and then hopefully making a few $$ selling recordings. Since radio doesn't have the distribution overhead the music industry does, there should be a better chance of at least breaking even on the music side. And since performance fees will be somewhere between reasonable and non-existent, the radio side becomes more profitable as well.

Radio has done it before, with "battle of the bands" competitions & releasing compilations of the competitors. It's even made a few $$ for some of the larger campus stations. It ought to work for the commercial side.

 

[TheBigA]

It begs this question though... if the labels *do* fail, what is radio going to do about music?

To start, there's 100 years of recordings available now. They're not going any where. Then, there always will be music...it just might not be managed by major recording companies. It might be on MySpace or YouTube or artist pages. We're simply talking about alternative distribution.

IMHO the radio industry needs to start thinking about getting into the music business.

It's not something the "industry" would do, but some companies are looking at it right now. CBS has already revived CBS Records, which used to own Columbia and Epic record labels.

There is great history of broadcasting and recording, going back to 1910. CBS, NBC, and ABC all were parts of companies that also owned record labels. It was a natural connection. But owning a label is very expensive. The other problem is getting widespread recognition of artists on specific corporate labels. Would Citadel play music from Clear Channel's record label? Would CC let them? Music is non-exclusive, while corporate content is exclusive. So for the time being, it's easier to have music managed by outside companies. But it could be done, and could solve a lot of potential problems radio companies might have at some point.

 

[w9wi]

It begs this question though... if the labels *do* fail, what is radio going to do about music?

To start, there's 100 years of recordings available now. They're not going any where. Then, there always will be music...it just might not be managed by major recording companies. It might be on MySpace or YouTube or artist pages. We're simply talking about alternative distribution.

That being my point, that there will be *some* alternative means of distribution. We're already seeing some amount of self-distribution -- of course generally not with anything popular, but I can see that changing.

It's not something the "industry" would do, but some companies are looking at it right now. CBS has already revived CBS Records, which used to own Columbia and Epic record labels.

There is great history of broadcasting and recording, going back to 1910. CBS, NBC, and ABC all were parts of companies that also owned record labels. It was a natural connection. But owning a label is very expensive. The other problem is getting widespread recognition of artists on specific corporate labels. Would Citadel play music from Clear Channel's record label? Would CC let them? Music is non-exclusive, while corporate content is exclusive. So for the time being, it's easier to have music managed by outside companies. But it could be done, and could solve a lot of potential problems radio companies might have at some point.

Absolutely, it's nothing new... It seems to me there's a LOT of room for running a less-expensive label.

While a CC-run record label isn't going to make money hand-over-fist the way the big labels did 30 years ago, if it's managed properly it will make *some* money. It will make *more* money if the records are promoted -- by radio -- in every market, not just the markets where CC runs the station in the appropriate format. Allowing Citadel to air records on the CC label -- at least in markets where CC doesn't have a station in the same format -- would be mutually beneficial to both companies.

Of course, it wouldn't be the first time a business couldn't figure out how to act in their own interest

 

[gr8oldies]

During the waning days of Beautiful Music, there were songs "recorded exclusively for WEZV" that were recordf in England. Al Ham had his Music of Your Life records as well.

 

[TheBigA]

The legendary Marlin Taylor was directly involved in the recording of Beautiful Music performances that aired exclusively on stations that carried the 24/7 Bonneville format.

It will make *more* money if the records are promoted -- by radio -- in every market, not just the markets where CC runs the station in the appropriate format.

I think that would be the challenge, for these companies to operate their music divisions independently of their radio operations, the way CBS, NBC, and ABC did earlier, so there are no competitive issues, and that music is allowed to succeed on its merits instead of simply being part of the corporate agenda.

Clearly media companies bring a lot to the table here. Consider American Idol. Consider how different things might have been if Fox had held on to the music rights instead of turning them over to Sony.

 

[landtuna]

But owning a label is very expensive.

Not if the label paid the artist(s) percentages of the sales instead of writing the big contract check up front before money is made.

 

[Mothership]

Lots of valid points made here.

However, Thom Yorke is almost certainly....wrong.