7 Things Record Labels Can Do to Stay in Business (a little longer)

Posted on 30. Mar, 2009 by refe in MUSIC INDUSTRY

1. Diversify your product offerings -The value of recorded music now rests largely in its effectiveness in promoting a complete experience. What people want today is to experience their favorite artists’ music in a much fuller way than was previously available. To capitalize on this, find a way to package and monetize different elements of that experience. The wheel doesn’t need to be completely reinvented here: think music videos, creative merchandise, unreleased tracks, private and semi-private concerts, extended album artwork, unreleased copies of notebooks and practice tapes used during the songwriting process, etc.

2. Innovate – It is abundantly clear by now that business as usual is no longer working. It is time for you to clear your cache of models and practices that worked in the past and come up with something that will allow you to survive the future – or the present, for that matter. Take Canadian label Nettwerk for example. Nettwerk is probably the furthest ahead of the pack as far as innovation is concerned, and others would do well to pay attention. They have been coming up with some very creative ideas to add value to the music they release, including offering what they are calling ‘Pre-mixes.’ Before an album is even officially released, Nettwerk is releasing unfinished studio tracks for any and all to remix. The best of these will be compiled and released as a companion to the official version of the album. This is a great example of adding to the overall experience of a band or album in a way that engages listeners and can be easily monetized.

3. Stop the Greed – If you want to succeed, stop exploiting your rosters and start supporting them. As recording, promotion and distribution of music gets cheaper and cheaper you are beginning to lose the upper hand you once enjoyed. Artists don’t need you quite as much anymore, so you had better find away of increasing the value you can add to their careers. No more dropping bands the moment they appear to hit a rough patch. Treat you’re the acts in your roster more like partners and less like commodities or they will find ways to be successful – with or without your help.

4. Stop Suing Your Customers – If you treat your customers like criminals, they will spend their money elsewhere. The recording industry has apparently decided that instead of finding ways to offer value to their customers, they will simply use the legal system to bully them into paying for something that is being offered for free by just about everyone else. This is not a sustainable business model. Also – drop the ‘we’re just looking out for the artist’ rhetoric. Everyone knows that the interests you are protecting are just about exclusively your own.

5. Shake Up the Talent – I’m not talking about your rosters here – I’m talking about you. If you want to compete in the New industry it will mean shedding old ideas and coming up with new ones – and getting rid of anyone who is unwilling to do that. There was some promising news a while back that EMI hired Douglas Merrill, formerly VP of Engineering of Google as the head of EMI Digital. It appeared that EMI had realized that it needed someone with a fresh perspective to shake things up. Unfortunately, news broke recently that EMI and Merrill have already severed ties after only a year. The reasons are unclear, but it would seem that EMI was never fully committed to investing in Merrill’s ideas, or in embracing new ideas.

6. Embrace - Don’t Fear – Technology - Finding and listening to new music is easier than ever before thanks to online music streaming, MySpace, blogs, and a host of other technologies. So far, you have spent most of your time and energy trying to shut these new technologies and services down, rather than partnering or competing with them. Imagine if you had embraced Napster and used it to promote your artists! The exposure that file-sharing could have brought to those artists with the resources that you had available is almost limitless. Now the opportunity has passed because you were unwilling to let go of the status quo.

7. Give Rid of DRM – No one likes DRM. People want to be able to listen to their music wherever they want, whenever they want. Most households now have many different devices that they use to listen to music, and they don’t want to be limited as to how many of those devices they can upload their tracks. Just get rid of it.

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