Newsletter #79 May 2011
We’re very proud to have this morning published our fourth industry report, about the changing face of record labels. Entitled Remake, Remodel: The Evolution of the Record Label, the report has been written by BPI Chairman and former Chairman and CEO of EMI, Tony Wadsworth, with Music Week’s Dr. Eamonn Forde.
Drawing from the quarter-century Tony has spent on the frontline of the record business, it takes stock of one of the sector’s most tumultuous periods in the face of game-changing technology.
The broad overview is counter to the view often pushed by outsiders – that labels have been unwilling or unable to adapt to changing and challenging times over the last decade. While a few years ago that might still have been the case, the report reveals “a renewed focus, hunger and energy within labels to radically evolve, to experiment and to lead from the front.”(Eamonn Forde)
What emerges through conversations with some of the industry’s top executives is a slimmed-down yet diversified recordings business, with broader skill sets, able to better manage costs. Half the staff of ten years ago are doing twice the work. They effectively have to run two businesses in parallel, the first maximising physical sales and the second building a brand new digital model.
On the subject of digital, the report recommends greater innovation in licensing to derive value from today’s palpable appetite for music. Tony believes greater revenues will be derived from high levels of low-value transactions and that the business should be looking at overall digital income rather than getting too hung-up on low unit prices.
The report also recommends increased transparency in the digital business to ensure all stakeholders feel rewarded by its dividends. One of its key themes is a spirit of partnership with artists, managers and the wider industry, and a willingness to experiment with new formats, rights, media and investment models.
So multiple-rights deals, where a record company will benefit from ancillary rights such as merchandise, touring revenues, TV or media properties, are growing. Leading the field in this area is Warners, which is moving to a business model closer to overall artist partnership, with a full range of services, including label services, access to market and access to capital. From an estimated 5 per cent of acts signed to some form of multiple-rights deal in 2006, Warner now works with 60 per cent of its active global artist roster through multiple-rights partnerships. It believes this model is better business for both artist and label, and is willing to walk away from some artist deals if they aren’t prepared to play ball on ancillary rights.
The report also explores some of the new investment models, via Ingenious, Power Amp, SellaBand and the like. The report notes the financial sector remains reluctant on the whole to invest in new music, preferring to back those with a proven track record and clear revenue history, which rules out most new bands.
This all makes the new tie-up between the Icebreaker VC Fund and Cooking Vinyl, particularly interesting. The indie label has effectively been handed the keys to a big pot of venture capital money, which it has been trusted to invest in the artists it signs. The deal, which was agreed after the two companies had already worked together on successful projects (including a joint venture with Marilyn Manson to set up his label, Hell, etc.), gives Icebreaker the assurance of backing artists filtered through the experience of an established label, and gives Cooking Vinyl the financial means to make big projects happen. Innovative.
Editorial by Sam Shemtob
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MUSICTANK LOUNGE: Wadsworth report
MusicTank Report – Remake, Remodel: The Evolution Of The Record Label
‘This report comes at a dynamic and exciting time for the music industry, with labels having gone through an unprecedented period of change in the last decade. Tony Wadsworth is perfectly placed to undertake a project like this, having been at the forefront of many of these changes throughout this period, both at label and industry level.’ – David Joseph, Chairman and CEO, Universal Music UK.
‘The document is definitely worth reading for anyone in this business…’ – Emmanuel Legrand
This report is FREE to all MusicTank members. Annual Membership is £45. Individuals can sign up then log into this website with their username and password to then download the report. Corporations and Institutions (education and charites) can find out about membership here, meanwhile, the report is on sale to businesses, corporations and institutions at rates starting from £199. Further details are available here.
Remake, Remodel…will be the subject of a MusicTank conference scheduled for Thu 14th July featuring Tony Wadsworth and a raft of industry commentators, innovators and executives from across the business. MusicTank members will be eligible for a discounted conference rate of just £45 (full price £65). Further details to follow, here.
Supported by: Robertson Taylor
Robertson Taylor is one of the leading insurance brokers for the music and live event industry. The company was set up in 1977 and provides cover for artists, bands, festivals, theatre productions and film. Whilst providing insurance to the top ten highest grossing tours of all time they are also able to provide an equally dedicated and professional service to new and aspiring acts and bands.
Live Music Industry Course
This innovative short course sold out way before the first session started back in April, however those unfortunate enough to miss out this time round should head over to the MusicTank blog to read course leader Andy Inglis’ posts here…meanwhile preparation of an entire course summary for MusicTank members is underway and will be posted onsite shortly.
Paddington Development Trust’s Creative Futures programme is a London-based support and innovations network for businesses working in the creative sector and for which University of Westminster is a leading delivery partner.
Costing only your time, membership is FREE and includes complimentary access to consultancy, seminars and workshops spanning everything from social networking to product development and technology, through to opportunities to participate in pitch camps designed to attract investors and angels, specialist business advisors, customised business planning support and opportunities to develop growth potential. Creative Futures is funded by the European Regional Development Fund. More…
INDUSTRY DIARY: Other music industry events
MAY 18 – CLASP (Pro Tools) Demonstration
Taking place at Air Studios, this free demonstration of Clasp – a new digital interface designed by Endless Analog – enables easy recording into Pro Tools via a multi-track tape machine and will be presented by Endless Analog president, founder, inventor Chris Estes. the demonstration is ‘in-situ’ and will feature a live band. Register here if you’d like to attend.
MAY 26 – Future Hit DNA with Jay Frank
JUN 22 – The Death Of Collective Licensing?
An investigative debate: Are the UK and Europe moving towards a US model? Are we seeing a dismantling of the PRS for Music monopoly in the UK? Are the record labels helping the dismantling of collective licensing? What is the true role vs. stated position of the publishers?
If a dismantling is taking place, what would the consequences be in a world without the songwriters’ cheque + the dole that has often been seen as the key reason for the UK’s prolific music scene. What is done to stimulate digital business – are licensors supporting and stimulating digital business? If so, how? Only the PRS for Music are pioneering new rates and making them public – what else can and should be done, by whom?
In view of the draft directive on Collective Licensing, where would we like to go, what is needed by the industry, including new startups, established businesses, labels, publishers, technology companies and artists?
DIARY – Wed 22 Jun | 14.00 – 17.30 hrs | venue tba | from £105 +VAT | booking
That's all for this issue - 'til next time...
If you have any queries regarding any of our events or activities, please call us on +44 (0) 20 8357 7317, or email: email@example.com
The views and opinions expressed are those of the author and are not necessarily condoned or shared by MusicTank. MusicTank is a non-profit organisation owned and operated by University of Westminster. University of Westminster is a charity and a company limited by guarantee. Reg Number: 977818, England. Registered Office: 309 Regent Street, London, W1. MusicTank is based at University of Westminster, Watford Road, Harrow, Middlesex HA1 3TP
Sections Below:MUSICTANK LOUNGE: Wadsworth report
INDUSTRY DIARY: Other music industry events
That's all for this issue - 'til next time...
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