Tuesday, June 28, 2005

Burn Baby, Burn

Several months ago, I had an opportunity to assist a young man's effort to be admitted to law school. Since his father was CEO of one of the largest PR firms in the world, I thought that was a good idea. Following a firmly-held practice, I instructed the young man to call me so that we could discuss his resume and his motivation to become a lawyer. After all, there really are too many of us, and I don't want to abet lawyer proliferation for no good reason.

Before speaking with him on the phone, I reviewed his resume and discovered that he had spent considerable time in the music business, in the writing, recording and production fields; and he had even attended Berkelee School here in Boston for a time, studying the business end.

So, the question begged to be asked, "why do you want to become a lawyer?" "Because," he said, "I want to play a role in putting the major recording studios out of business unless they begin to treat the artists fairly."

His comment stunned me enough to guarantee my silence as he put forth his perspective on the current state of the music business, focusing on how the quickly-emerging technologies for direct-to-consumer downloading would enable thousands of artists to bring their music quickly and cheaply to the listening public, by-passing the major labels entirely and quadrupling the percentage of revenue earned by the artist.

"You mean," I asked him, "that you foresee a day when musicians without major label support can have their music affordably produced and presented to the public efficiently and cheaply, and they'll actually be fairly paid for their work?"

"And they'll own their songs too," he said.

"Dreamer," I said to myself -- and rapidly agreed to write him a letter of support, which, I should say, was the most effusive and enthusiastic letter I had written in years.

Clearly, the young man knew something I didn't, as this Boston Globe story reveals:

A new kind of online music store has arrived, singing a different tune: No major labels allowed!

Launched in the shadow of large digital distribution empires such as Apple's iTunes and Napster, these independents-only music stores are designed to serve musicians who find themselves buried beneath the major labels' artists. Even on the Internet, where inventory isn't limited by real-world display space, unsigned artists don't stand a chance unless they have a record deal.

But the tables are starting to turn, with the emergence of indie-only online music stores that not only give exposure to musicians on independent labels but to unsigned musicians.

Businesses like and are changing the way fans download music.

Audio Lunchbox, in Los Angeles, has become the largest indie-only online digital distribution store since it was launched in 2003. It has acquired the digital rights to 750,000 to 1 million tracks, 4,000 independent labels, and close to 50,000 musicians. Its a la carte downloading service is similar in cost to Apple's iTunes and to Napster, with singles selling at 99 cents and most albums at $9.99.....

....As more online businesses begin to pop up in support of independent music, it's clear that musicians can get a good deal. While artists get more direct revenue, usually 50 percent or higher, most companies like Audio Lunchbox and Magnatune are nonexclusive, allowing musicians to distribute their music anywhere.

Most independent music stores will take on nearly every musician who applies; Magnatune, which is based on a music label model, is the exception. Buckman said that out of the 400 CDs sent to Magnatune each month, 10 are picked. All of the online stores let musicians keep the rights to their music.

This is a dramatic and potentially explosive development that has the potential to reshape the music industry landscape. As digital downloading and satellite radio expand in popularity, major labels should begin to see their market share shrink, unless they reevaluate their practices. As popular indie labels attract more and more artists to their stable, they will develop the market power to drive radio programming. And the artists will be encouraged to go to the indies for the benefit of the longer-term payout of a fair profit on their sales.

Closer to home, this development better enables performers of less popular genres, like blues, to reach a wider audience. Over the past few years, I have been introduced to some fabulous blues artists via internet-based streaming audio; and I am then able to purchase a CD with a click. Want to try it? Check out Anthony Paule's "Hiding In Plain Sight." One of the best blues CD's you'll ever own. This development will only increase the listener's exposure to new artists.

My young friend was admitted to Tulane University Law School. I hope he is able to ride the crest of the wave before it gets too crowded.

And let's hope he's right about the major record labels.

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