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Looper's Delight
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Dear Rick,
There is no doubt a shift going on resulting in declining CD sales.
Here are some factors I have considered.
Speaking for myself, I do not buy CDs like I used to for a number of
reasons. Being older, a father (of a teenager now)divorced and on a fixed
income, I do not have the financial resources to explore and buy CDs.
Those that I choose to buy must be of a proven commodity. I'm just
not willing to shell out for what may be interesting, in some case marginal, may
be really good, may be really great or may be really bad. I get a lot of
references for good CDs to buy from friends that are still single and still have
more disposable income. I do try and buy CDs to support artists I like and
not accept burned copies from friends. However burning copies of CDs is
certainly one factor now that the technology is affordable in mass.
Also, there are not that many outlets that have a large markdown area of
used CDs. It is not like the old days where one could get vinyl for .99
cents to $3 and one would discover the wonderful disgards from someone else's
collection (artists that one could then go on to support through actual CD
sales) or even potential source material for looping. I'd say this is
mostly due to the mass retailing of music via the corporations. There is
no room for the littles stores and little folks anymore.
As an artist and musician, I also rarely listen to that much outside music,
even if it is music by friends. Projects take up my time and when
mastering, I usually am involved in what I'm working on, not outside
music. For me it is a case of being focused on my work and not able to
focus on works by others. I do realize this is a bit elitist on my part
and not very supportive of the community. As independent artists, we need
to be able to reach outside our community for sustained sales growth.
These are factors to be considered.
The biggest factor is the Internet with free file sharing etc.
It is creating a paradigm shift.
Consider that the music industry as a business model has worked on the
80/20 principle common in retail. Eighty percent of your sales comes from
just twenty percent of your products. There are studies that show the
music industry works closer to a 90/10 model. This means that the major
labels are accepting that ninety percent of what they put out will not make
money or drive sales. They are focused on that ten percent of "big hits"
to drive sales and profits that can then help them find via AR find the next big
thing. They know they are not going to make money on ninety percent of
what they put out. I'd say that while some good independent labels may be
closer to a 70/30 model, it still comes down to retail sales to drive growth and
profits that can be put back into more product. Then comes the Internet
and free file sharing that undercuts the sales, growth and profits.
Margins even for independents become even thinner thus even with independents,
narrowing their visions to those artists they know they can sale. What
happens then is that more and more niche market music gets driven underground to
the Internet where artists have to be able to offer free downloads just to get
people to hear or view their work. Truly a downward spiral is taking
place.
As an artist, I support any technology that will allow artists from the
most extreme fringe to the most commercial to protect their work from being able
to be shared for free. Our art is what we have, who we are and deserves
copyright protection. As someone on the fringe, I realize that I will have
to offer my music for free if I am going to have any chance of getting people to
listen to my work. Such technology will come in time and the hackers will
work to find a way around it.
So what are we as artists to do? We must embrace the paradigm
shift. With downloadable music, now the business model shifts to better
help niche or fringe music. Studies have shown that with the Internet, a
reasonable business model is 10/90. Just ten percent of your sales and
profit can come from across ninety percent of your product as an artist or
company. This could generate a lot of revenue if one has a lot of product
out there available. This means it can pay and profit to explore and offer
niche or fringe artists for labels even if they are only popular in certain
areas. Cost to distribute a song via the Internet for download for pay is
under twenty cents per. One could offer fringe or other extreme music for
under forty cents and even if that song sold just 2,000 downloads in Moscow,
Idaho because there was some hotbed of activity for a band or artist there, an
artist or label would profit from having that artist or band available for
download. Please, no one take offense to the referenced use of Moscow,
Idaho. For labels, they could offer their music in a tiered structure
depending on popularity. As independent artists, we must seize on this
paradigm shift now before the major labels do. I believe the major labels
are so entrenched in their old business model that they are way behind the curve
of this trend. This means the opportunity for independents is open and the
field is wide open. ITunes is not even realizing the potential for profit
from offering the fringe.
Kenny
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