My view on the music industry

Yesterday I attended a session named “download problem solved” (dutch review). The idea was to discuss what alternative business models are that can help musicians make a living. Of course a topic like this, combined with 20 people from different background leads to… positive chaos. Usually these situation fuel me with ideas but I need a quite moment to put everything in place. That moment was that same night lying in bed. There are 3 things that stuck with me concerning the (future) of the music industry,

1) There is no download problem

The ability to reach a worldwide audience with a click of a button is a blessing and huge opportunity for 99.9% of the people making music. Now that you don’t need a middle-man to help you reach an audience you can have a much stronger connection with your fans and supporters.

The 0.1% of the people that do have a download problem are in the head of the music longtail. Basically all the artist that are played on the radio and making big bucks. I have a spotify premium account for which I gladly pay €12 a month to stream “popular” music without having to buy it. Rumours are that apple is working on the same model in iTunes. Can that 0.1% get the same amount of money they earn now when everyone adopts services like spotify? Probably not and that is a development for the better!

There is no download problem. There is a industry with broken business model problem. A business model that is based on control. To be honest I don’t think outsiders will be able to fix that industry, they will do everything to stick to their model as long as possible.
What most likely will happen is that a very smart someone from the 99.9% group will find a way to monetize all those new opportunities. We should focus our energy on the opportunities instead of trying to fix a broken model.

2) An artist/band that wants to go pro is just a the same as a tech startup

Every time I’m in a group with people that are discussing the music industry I get the feeling that somehow we are franticly trying to find a way so that as many artists as possible can make a living out of making music. Why is that!?

Here in the Netherlands there are millions playing soccer on their free Saturday morning. All of them know that there are just 36 professional teams with each about 20 paid players. So the chances of you becoming someone who can make a living out of kicking a ball are very slim. Still there is no public debate on how we should save soccer by letting more people make a living out of it.

Every artist should make a conscious choice if he wants to make a living out of (making) music or if he wants to do it as a hobby. If you’re like one of those million soccer players and decided that music is a hobby you need to find a way to subsidize it. The most common way is through a day-job that pays the bills.

If you decide that making music should be your profession than you’ve just stepped into a world called business. The moment you decide this you’re starting a company! Yes, thats right you’re no longer a musician, you’re an entrepreneur that has a talent for making music. The challenges you face are exactly the same a any startup company has in it’s early days. You need to be creative on how / where you’re going to find the money to survive in the early days. You have to be smart about how you’re going to reach your audience.

Can’t make a living out of it? Maybe there isn’t a (large enough) target audience, maybe you suck at selling it, maybe you just not good enough. Again, exactly the same issues as any other startup has. If people don’t want (to pay for) your product / service then you should go out of business!

Next to the pro & amateur groups there is a group of musicians that falls in the “art” section. Meaning that the target group they appeal too will always be small to make a profitable business but which consider a valuable asset in our society. It enriches our culture and should therefore be subsidized by our government.

3) The freedom of content (illegal downloading) makes the music “industry” flourish like never before

The most ridiculous argument I hear about the “illegal” spread of music is that it’s killing talent. History has proven this argument wrong time and time over again in different industries. Let’s take the free spread and access of photo’s online through sites like Flickr and iStockphoto. These sites haven’t killed professional photographer industry, on the contrary. Millions of people have been caught be the magic of photography and are buying semi-pro camera’s and exploring this field. The story is the same if you look at journalism and the uprise of blogs. Or even further back like Clay Shirky described: 15th century Scribes didn’t become obsolete because people stopped reading but because everyone got cheap and fast access to books with the invention of the Gutenberg’s printing press.

Imagine this happening with music (it’s already happening). The free spread of music will lead to more and more people getting engaged. Most of them consuming but some of them will want to express them-selfs through this medium. That’s why I believe that unlimited and unrestricted access to music will lead to a bloom of musical talent like we’ve never seen before.

Eh, right to conclude this story… let’s stop talking about a dying industry that doesn’t want to be helped. Let’s start keep talking about all the new creative ways artists will be able to express them-self in the 21st century.

Marc Fonteijn

Marc Fonteijn

Als medeoprichter van 31Volts houdt Marc zich bezig met het verleggen van grenzen binnen service innovatie. Marc helpt organisaties om waarde te creëren voor hun klanten door middel van design.

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8 reacties

  • Comment by Marc Fonteijn

    A supplement to my own post. A crucial thing to keep in mind is that there is no ultimate or perfect (business) model. There are only less bad ones.

    I’d also like to reference just some of the work that has inspired my thinking over the last years on this topic:
    * Kevin Kelly – Better then free
    * Gerd Leonhard – The future of mobile content (video)
    * Clay Shirky – Here comes everyone (book)

  • Comment by Bas

    I’ve been coming to the same conclusions for a while now… And I keep seeing evidence that supports this truth, like yesterday when I saw this article:
    http://arstechnica.com/tech-policy/news/2010/04/piracy-problems-music-industry-grew-in-13-markets-in-2009.ars

    I hope I’ll be able to go into more detail in the comments here at some point, but too busy at the moment.

  • Comment by Marc Fonteijn

    The final nail in the coffin for the 0.1% discussion is made in this presentation by the founder of the swedish pirate party. It’s not about making or losing money, it’s about fundamental civil liberties. http://video.reboot.dk/video/510337/pirates-go-to-parliament-by

  • Comment by Bas

    Seen this one too? http://www.youtube.com/watch?v=08gfh_6sbQI

  • Comment by Alexander Mooij

    Interesting thoughts.

    1. There is no problem
    This one is clear. How do the advantages of the internet way up to the disadvantages? I think it’s pretty good. We need a new way to work with this thought. But step one is to embrace this era, instead of calling it a problem. That’s why I call my project Download Problem Solved.

    2. A band startup is the same as a tech startup
    Agreed, if you want your music to go somewhere, you have to work for it. I still think you are going to need some help, just as starting entrepreneurs do. And as your band becomes more successful, you will be able (and need) to outsource some of your work. The difference between now and the old days will be that it’s the bands choice.

    The new music world will not be about ‘who’s got the most expensive equipment’ but rather about ‘who delivers the best service’. And there is an important change, one towards a real free market.

    3. Freedom of content is good
    Just look at wikipedia. The amount of knowledge we have in our pocket these days is astounding. It is worth more than any sum of cash we could ever come up with. Let’s not forget that.

    As Tim Ferriss, author of the 4 Hour Workweek pointed out in a question to how he uses his blog to make money: “You’re probably going to use that money to improve your lifestyle. So what I do is cut out the money part and go straight to lifestyle improvement part.”

    For us in the music industry the most important question I think will be: “How can we add value to the life of a musician in any part of his or her career?”

    Thanks for your view on the matter!

  • Comment by Bram

    Hi Marc. Good piece on this topic. In 2005 I wrote a paper that goes into the topic from an equally constructive point of view: create a way for the mass of musicians (the 99,9% you refer to) which stimulates the music industry and the diversity it contains. You can find it on this site: http://www.c3.hu/~bram.

    The music industry is not going to come up with a new model all by itself. Instead, they are stalling this process by both protecting music (bringing people to court, encrypting music) and by searching for added value. That latter is actually a good thing, and should probably be the only thing that music labels should do: select the best artists, and offer their services (and a part of the profit) in promoting and plugging. Just like really awesome startup (Twitter) that gets bought/sponsored by a larger company which gives it money to improve further. If you’re not one of those artists, you’re not in trouble: you just got to work harder for yourself. At least, that’s how I see it. Creative Commons should already offer sufficient ways for that crowd to gain a living (which goes for all kinds of culture production: photography, film, literature, music, etc.).

    Cheers. Bram

  • Comment by anderS

    Quite a few goods points, but I have 3 issues with your view:

    1) You name the Art section as valuable but not in a position to makemoney commercially due to .. too small numbers yet enriching our culture. What is the difference between those and the general (amateur) long tail, who decides (Politics i.e. lobby?)

    2) One of the groups that are already finding it hard to make a living are people learning to play classical instruments as higher vocational training. Their skills are not easily amassed in hours in between and their brilliance often is revealed at a much later date (versus your soccer example). If they stop choosing it due to lack of carreer opportunities, society will loose these traits / skills. Without viable commercial options they are indeed slave to the subsidy-circuit or sugar daddies. No options for them
    2b) This is the same issue as your (imo false) argument on camera’s. Yes Canon et al are selling more and more camera’s, but the ‘art’ of taking pictures professionally is fastly eroding as commercial enterprises will not pay for HQ pictures (not what they cost anyway).
    Not saying it’s good or bad, but my point is there is still sh*tloads of money being made on Photography. It’s just more and more generic hardware and/or media players reaping the rewards instead of the creators/performers. I’m not sure the next James Nachtwey or classic pianist will stand up in this new culture; people/business will make money on them regardless of how we download the question is how they make a living on it.

    3) brings me to the main ‘mistake’: Your artist is only the performer. Depending on your definition of musical art that is only part of the equation: Composer – Songwriter – Performer(s) . People who are great composers generally suck I think in business. According to your logic that means they should stay amateur. I’d say WE need to find them a business model as it is a waste of good artist souls

    IN general I agree with your point that industry incumbents and back-catalogue majors should basically give up and start a new, but by defining all artists as entrepreneurs first you’re seriously daming the talent pool imo. There needs to be some standard valuation model where any commercial activity that is visibly aided (valued higher) due to their use of (third party) music and as such making extra rents due to the music should pay of some tiny % off (to the 3 parties mentioned before, non-transferable perhaps) just to keep the creatives running around and making sure they keep creating new stuff

  • Comment by Marc Fonteijn

    @alexandermooij @bram it’s gets so boring when everyone agree with eachother ;)

    @anderS
    1) Good question. The difference would be that true Artists have (way) more talent over the general amateur. I’m not quite sure if this make sense in a practical way, so I’m very much interested in your opinion. And who decides. Well, in the end we as society decide through politics who gets funded and who doesn’t.

    2a) Is this diffent from the situation we currently have? Didn’t those people have a hard time making a living even before the internet arrived?

    2b) I would state the conterary. I think the ‘art’ of taking picture is flourishing as never before, and I’m not talking about camera sales. Compared to 10 years ago there is a multitude of people around me that have found their passion in photography. Some of them are just passionate amateurs, but some are dedicated and getting better and better every day. I dare to say that these dedicated amateurs are reinventing the art. The same is going on in the music industry, just take a look at what happening in the dutch hiphop/rap scene. Just hurds and hurds of passionate young people that are making music together. A lot of them suck but sometimes a kyteman arises.

    3) I’m not sure where I made that claim but being an entrepreneur doesn’t mean you have to be good in business. It means you have be smart and creative to make the most of the opportunities there are in the world. A lot of the times you need to create those opportunity by yourself. If you know you suck in business you need to find someone who’s good at it. If you’re not able to do that then you should find a regular job that matches your artistic soul. Just like talented graphic designers, chefs and athletes, etc do.

    Gerd Leonhard recently poste an interesting article on how music could me monetized in the future: http://www.mediafuturist.com/2010/02/sharing-20-content-protection-is-in-the-business-model.html

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