March 26, 2003
A Viable Alternative to Slavery: Have Fanbase, Will Travel

Viral, direct marketing is nothing new, but for the music business and musicians, putting more and more of their work out onto the Internet, it's different. Madonna is selling her latest single, "American Life", available for download with a $1.49 payment via Paypal. Simply Red has released their eighth album, HOME, on their own label, simplyred.com, including lyrics and samples of the music. They apparently hope to make 300-400 percent higher returns than on standard record company contracts. Mick Hucknell refered to these contracts as "immoral" in a series of articles at FT.com about the music business and ditching the major labels. These marketing scenarios turn old models upside down, and while this isn't really new for the audience, who've downloaded directly for years, it is new from the business end. Madonna is doing this through her label, Warner Bros., but Simply Red is on their own. While Simply Red may be the game to watch these days, there are some other smaller artists out there giving this a try, like Eleni Mitchell. But the theory is that having an established fan base and quality music are the only way to make the direct model succeed.

Hucknell says he will never go back: "No, this is how I will make records for the rest of my career," he insists. "There's not a chance I'd go back to a major -- not a chance. I'll do distribution deals with people, but nothing beyond that."

On the other hand, Max Hole, at Universal, where he has licensed the Simply Red album for some territories, says that, "It's an option for a successful financially secure artist, but it's risky and expensive. At least with a major you are going to be paid. Generally, artists are better off with a major."

Posted by Mary Hodder at March 26, 2003 09:01 AM
Comments

"At least with a major you are going to be paid."

Having recently had the truth of this statement examined by the L.A. Times (http://www.latimes.com/business/la-fi-incubus18mar18,1,2452375.story?coll=la-headlines-business-manual)
we can see that yes, you are going to be paid, but not fairly.

As the story indicates, a 33% royalty on a $12 wholesale price totals $1.82. Additionally, if the record labels do the math, 7 million times $1.82 adds up to less than $4.25 million.

So thanks, Max, but some of us think that the recording industry, which was designed to help artists reach their fans, is now set on preventing them from hearing music and has become our greatest obstacle.

WE feel that we, and the world of music, would be much "better off" if we took any other available route to sell our music EXCEPT a major label affiliation.

Will it be easy? Of course not. But as anyone will tell you, only a select few will ever "make it" to the so-called big time anyway.

It's time to let the consumer decide who that select few is, instead of five guys in suits.

We'll ALL be better off, except for the outdated industry which, much like the Tin Man in the Wizard of Oz, did not come equipped with a heart.

It should no longer be oiled, but left to stand motionless and become a monument to what could have been.

Posted by: George Ziemann on April 1, 2003 12:24 PM
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