#81 Newsletter Editorial - Remake, Remodel: Review
29 Jun 2011
So a late afternoon spent in the Boardroom of PRS discussing five key themes to emerge from Tony Wadsworth’s recent label report. Artist development, changing media, the health of the label, digital vs. physical and the alternatives for artists – what did we learn?
The first theme are financial pressures making labels less able to develop tomorrow’s superstars? was straightforward, with both Muff Winwood and Robert Horsfall agreeing that artists should put the hours – Malcolm Gladwell’s 10,000 hours – into honing and perfecting their craft. The Beatles toured and played clubs in Liverpool and Hamburg for several years before they got their first record deal, which hardly saw them becoming a priority act.
Leaving artists to develop longer before signing would enable them to hone their craft and enable labels to take them forwards at the right point in their career. Horsfall pointed out that, with people increasingly able to initiate their careers by DIY, a booking agent and digital PR were the first two specialisms an artist or their manager would need, ahead of signing any record deal.
The second theme, on the changing media landscape, was fascinating, with perhaps the most interesting analysis made by Music Week’s fittingly titled ‘Director of Content’ Mike Gubbins, who introduced each of the five topics with a statistical and qualitative analysis.
Mike questioned whether all media is in fact fragmenting – juxtaposing the success of the Daily Mail and the X Factor against the failure of MySpace. He argued that we are inherently community-minded – pointing out that the coming together of people for a gig is itself the antithesis of fragmentation. While technology is enabling us to exercise a lot more individuality and choice than we could in the analogue world, people still like to come together. Rather than fragmenting ad infinitum, technology would simply create new aggregated powerbases – iTunes, Facebook, Spotify – that would sit alongside, and occasionally usurp, existing ones.
CMU’s Chris Cooke argued that media brands, such as the NME, that are successfully navigating new technology are simply expanding their reach online. University of Westminster’s Paul Dwyer meanwhile argued that as long as people could tell a story there would be TV and as long as DJs could find new talent there would be Radio 1. Readers who attended our ‘how to spawn a viral hit’ think tank will know that social media analytics have become a vital tool for media gatekeepers, and that social media can break hits in and of themselves.
Part three, on the health of the business, was developed on the premise that media fragmentation and financial pressures on labels would hamper their ability to develop superstar acts. But by the time this session had come round, these premises had already been jettisoned. Malcolm Gerrie summed it up with “We’re going to end up with superstars whatever happens’’, arguing there would always be superstar talent and that as long as we had the likes of Chris Blackwell and Richard Russell investing in talent and prepared to take risks, that talent would realise its potential.
Unsurprisingly, the speakers on the digital vs physical discussion felt that ditching the physical product in its entirety may not be wise. Apart from the fact that over three quarters of all albums sold are CDs, the loss of the music retailer’s skills in maximising sales, as well as “poster effect” of shop windows was felt to remain very valuable.
On the future of physical, Universal’s Paul Smernicki felt that the iTunes LP digital format was well on its way to being gazumped by new App-based formats, and separately suggested that VEVO had the potential to become a gamechanger, turning a promotional tool into a revenue generator. Alice Enders argued that the recently-announced Virgin deal with Spotify could prove to be a watershed moment for digital music consumption, as it finally introduced the wage earning family as the core music-buying unit.
With report author Tony Wadsworth noting the importance of development over deal points in the first panel (Horsfall pointed out that artists seldom receive anything above their advance anyway), the final topic discussed some of the alternative deals available.
These varied from service deals for established artists to three-album royalty deals for new ones where, according to [PIAS]’s Peter Thompson, the label wouldn’t expect to see any profit at all on the first album. Cooking Vinyl’s Martin Goldschmidt suggested the lower key A&R policy of many independents, with less pressure on recouping, will often lead to better works.
As Goldschmidt commented towards the end though, the importance of radical innovation to the business, developing new formats and the future of recordings, cannot be underestimated.
Record companies might like to look across the waters to a leader in another industry, who not so long ago had been written-off as in terminal decline. Apple, who are nowadays posting record profits year on year, were in serious doldrums, until the release of the iMac in 1998. The iMac was followed by the iPod, iTunes, a retail chain, the MacBook Air, the iPhone (with its app store) and most recently the iPad. Revolutionary ideas, combining high technology, slick design and new business models.
We can’t speculate what the innovations will be that will send the record companies Apple-like back into profit; they haven’t been invented yet. But we’ll know them when we see them. The music industry has much to learn from the likes of Steve Jobs.
Many thanks go to our content partner Music Week, our sponsor Robertson Taylor, and our media partners CMU, Music Ally and Record of the Day, without whom the conference could not have taken place.
Editorial by Sam Shemtob