Cayocosta
What everyone seems to be overlooking of late, is the important fact that major labels provide the access to capital required to support artists beyond their initial phases - many times for much longer. In other words, major record companies can be considered venture capitalist entities that specialize in the music industry.
Therefore, if majors go away; how would artists source the capital they require to make records, tour, and promote their work? If music is free, how would any investor recoup?
This is the point where things get very fuzzy - for there's plenty of rhetoric available but no viable business plans; no feasibility studies being put forth.
The consensus is, that music should be free and monetized via advertising; but there remain issues with this concept, including:
What everyone seems to be overlooking of late, is the important fact that major labels provide the access to capital required to support artists beyond their initial phases - many times for much longer. In other words, major record companies can be considered venture capitalist entities that specialize in the music industry.
Therefore, if majors go away; how would artists source the capital they require to make records, tour, and promote their work? If music is free, how would any investor recoup?
This is the point where things get very fuzzy - for there's plenty of rhetoric available but no viable business plans; no feasibility studies being put forth.
The consensus is, that music should be free and monetized via advertising; but there remain issues with this concept, including:
- What's to stop the further use of P2P file sharing to avoid the advertising?
- What are the repercussions as to performance and mechanical royalties once a free-music precedent has been set?
- Majors partnering with portals like MySpace or Facebook means that revenue must be shared with new third parties. How would this change the ROI?
- How is the advertising delivered with music downloads?
- What are the consequences should artists "sell-out" and write songs intended for specific sponsors and/or products in an effort to increase the likelihood of being signed?
Further consider:
- An "Acme Corporation" executive's son or daughter is an artist, and their sponsorship offer stipulates that he or she be signed.
- A&R Reps routinely compel artists to change lyrics to include for example: Viagra.
- A very popular Facebook user is not an artist, yet is signed to a recording contract in an effort to capitalize on his or her recognition.
Moreover, according to the punditry; not only do the majors need to downsize, but also acquire and consolidate management, touring, merchandising, as well as continue to provide traditional captive services such as artist development, production, distribution, legal, promotion, art, etc.; while partnering with corporate sponsors as well as web portals - all the while underwriting the entire speculative endeavor internally.
An extremely risky proposition - and if it doesn't fly, recovery may be totally beyond reach.
Under this paradigm, majors must become much more complex organizations - with a potential situation whereby multiple signatories could be required to release capital; for all divisions (and possibly some partners) would likely be required to assent to artist contracts - thereby increasing corporate bureaucracy as well as the potential for partisanship among key players, departments, and/or entities.
(Naturally, the majors would then gain revenue streams generated across all new captive sectors, while their share of any remaining traditional sources would likely increase to accommodate the loss of hard-copy and digital sales income; thereby provoking further criticism for being greedy - not too mention nascent accusations of monopolistic practices.)
Lastly, what is the potential advertising revenue per track? If it's $.50 every time someone downloads (or shares) a tune, that might appear to be reasonable; however, what would sponsors actually be willing to pay - and would that be enough to support the industry under such a model?
An extremely risky proposition - and if it doesn't fly, recovery may be totally beyond reach.
Under this paradigm, majors must become much more complex organizations - with a potential situation whereby multiple signatories could be required to release capital; for all divisions (and possibly some partners) would likely be required to assent to artist contracts - thereby increasing corporate bureaucracy as well as the potential for partisanship among key players, departments, and/or entities.
(Naturally, the majors would then gain revenue streams generated across all new captive sectors, while their share of any remaining traditional sources would likely increase to accommodate the loss of hard-copy and digital sales income; thereby provoking further criticism for being greedy - not too mention nascent accusations of monopolistic practices.)
Lastly, what is the potential advertising revenue per track? If it's $.50 every time someone downloads (or shares) a tune, that might appear to be reasonable; however, what would sponsors actually be willing to pay - and would that be enough to support the industry under such a model?
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