One of the first conversations I ever had with Tamika Cosen (circa 2007/2008), before she came on board as Publicity Strategist for AG One, was about the direction of music industry -- how selling music wasn't going to be a standard. We were at Florentines -- in downtown Fullerton -- and in the midst of all the commotion from dancing bodies to a crowded bar, we were sitting behind DJ Roial 1's booth and started talking about how record labels who expect to sustain financially in the next 5 years cannot continue to be reliant on revenue generated from music sales. I told TC that within 5 years iTunes would no longer charge per song download. It would become membership based and for a set fee you'll be able to download X amount of music a month, and so on and so forth with the algorithm.
Approximately 3 years from the day we had the conversation I am writing today to admit that I was wrong. And here's why:
I recently saw a commercial on TV for Rhapsody that said they are now offering unlimited downloads and streaming of music directly to your phone, iPod, computer, etc. for a pretty reasonable monthly fee. I was wrong, iTunes slept on it. Either they missed this new trend or are in the process developing a more efficient means of "selling" music. But this goes to show that the huge decline in music sales is ultimately forcing a change for monetizing music.
It used to cost, or require, a huge budget to make good music. The advancements of technology; mobile/home studios have made it very easy to create a quality record without a major label budget. Which some may argue depreciates the value of recorded music. However, that and the convenience of being able to download music free (legally, and illegally) via the Internet makes it hard to recoup money invested, let alone sustain a career on record sales alone. The quick fix that labels have taken as of recent is to implement a new type of record deal: The 360 Deal.
I have never been a fan of the 360 deal -- not to say they aren't a brilliantly thought out means for both labels and artist to mutually benefit. But artist who are garnering enough attention for labels do want to sign them to a 360 more likely than not don't need the deal. I am not a fan of the 360 deal because of how they are manipulated and leave even the most successful artists struggling at the end of the day. With the hand of the 360 deal in the cookie jar of all streams of income the artist has they have no choice but to tour more (keeping them away from families and studios), rush to finish albums (ultimately hurting the culture of quality musicianship), and leaving our major outlets flooded with singles they hope will chart (because catchy singles generate income, albums don't) ...which ultimately leaves artists in a seemingly treadmill type lifestyle they call a career.
The long haul fix: Branding. 360 deals are an attempt to do this, but I believe there is a better paradigm that will be far more lucrative for artists, musicians and music companies alike. It may or may not mean the end of record labels, or franchising indie labels -- assuming they will be developing talent before artists move onto the major label playing field. I believe that we'll see more similarities in recording artist and professional athletes; think NASCAR racing suits or Soccer club jerseys. More festivals or artist tours sponsored or endorsed by major corporations. Recorded music sales will be replaced with equity garnered from streams and downloads; a reach that large corporations will want to buy into once it becomes a significant amount.
The validity these theories will depend on how the fans force the hand of major labels. Some of these ideas I've put some into practice and have generated the expected results, others have not -- I'm still perfecting those. For now I'm happily building a nice strong foundation for my castle to rest upon. I still strongly believe music sales will not be a lucrative means of income within the next few years. I'm preparing AG One to sustain independently of that revenue -- what about you...will you survive without it?