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- mickronson
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Re: Duffs Playboy Blog #16
The Dirty Side of the Music Business
By Duff McKagan
Up to this point in this column, I’ve been writing almost strictly about financial vehicles or wading into the economic muck that we as a nation have gotten ourselves into and trying to bring some clarity to the situation. If I may be permitted, I would like this week to go on a little rant about some things that have been going on in my business and also how the business model for music has pretty much been flipped upside down over the last 10 to 15 years.
Back when I was in GN'R, bands like us could pretty much operate at a break-even point on the road because acts were selling more records than is even imaginable these days. The reason for the dramatic downturn in record sales, of course, was the digitizing of music. Putting music on CDs meant it had to be in digital form; eventually this led to the situation where digital files like the MP3 were divorced from any physical product, making the Internet and home computers the prime means of distributing music. A rock tour back then, at the dawn of the digital era, was really just a huge commercial to sell your record. Because a larger portion of people get their music for free via piracy these days, touring, “merch” sales (mostly t-shirts, but also stickers and pins and anything else you can slap your band’s logo onto), and licensing of one’s music for ads and ringtones must support the average music act these days.
The major record labels missed the only real opportunity to get paid from illegal downloading back in 1997 or so. We all remember the Napster conundrum when Metallica sued them, right? Hey, as far as I’m concerned, Metallica had every right to demand payment for their hard-wrought recordings. But there was another deal on the table then from Napster that was never really publicized—and this where the “major labels” fucked up in my opinion.
Napster was making truckloads of dough off banner ads back then. It seemed the site was the most looked-at space on the Web and therefore a hot property. Car companies, cola bottlers, movie companies, and many others were paying top-dollar to get access to those Napster-glued eyeballs back then. Napster offered to share this ad revenue with the major labels so that artists would get paid for the downloading of songs that Napster made available for free. It now seems like the perfect business model for what was then a largely unanticipated future of digitized music. The majors balked and a huge opportunity was missed.
Again, in 2005 or so, the remaining major labels tried a lawsuit against pirate music source Kazaa. And again, the company under attack offered to share its ad revenues but were turned down. Actually one major peeled off from the lawsuit and did a deal with the Kazaa; the rest just simply dug their heels in and are still in the same spot to this day, left in limbo with neither them or their artists getting paid.
Nowadays, if a band wants an even remote shot at getting a deal with a major label, they must yield to the new business paradigm of giving up a portion of their publishing, their merch sales, and even concert receipts to the label in return for the release and marketing of the band’s music. This all seems dirty to me, but it’s the way things are now done—at least in the old corporate music world.
Back in the mid-to-late 1970s, there was a grassroots revolt against the then-bloated music industry (read the book Hit Men to get an idea of just how extreme the business had gotten). Independent record labels like IRS, Slash, SST, and Beggars Banquet began to spring up, giving new and different bands a chance to succeed and reach a national audience. The same thing has happened again in recent years as a result of Internet distribution. But right now, there’s almost too much information out there. A club booker now books bands based on how many views they get on their MySpace page. Bands have to hustle—maybe even more than in the pre-MySpace era—just to get a gig at a shitty bar. What seemed like a revolution fueled by the Web now looks somewhat tenuous.
But maybe the rest of the dominoes are ready to fall—and by that, I mean the ancillary parts of the music industry. I hope there is a true music revolution bubbling right beneath the surface of the underground that will hopefully surprise us all and get us away from, for instance, the vanilla agenda rock radio feels it has to follow these days in order to sell ads. Music blogs, internet radio, mashup sites—there’s a lot of things out there, of course. But with the possible exception of iTunes, the world is still waiting for the next wave of tools and institutions that will allow new acts to ingrain themselves into the popular consciousness the way bands like GNR were able to do—to create generational anthems, to mark moments in time for an entire nation, to unite our culture through music. Here’s hoping their arrival is right around the corner
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