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Hot on the Web

The continually evolving music business

This column originally ran in ComputorEdge on August 13, 2004
(Issue 2233, Pretty Is as Pretty Does)

While the recording industry tries to strong-arm the U.S. Senate into passing a bill to outlaw any technology that might, possibly, just maybe be used to violate copyright law, the Internet continues to erode the entire foundation of the business model record companies rely on for their survival.

Record companies arose early last century in response to Thomas Edison's new talking machines. Edison himself sold the very first recordings, but other labels soon arose to fill the demand this new technology created.

Over the next ninety years, the labels created an entire industry around delivering recorded music – and occasionally spoken-word projects – to consumers.

Before Edison, of course, musicians' abilities to generate income from their work was tied directly to their ability to find customers to pay them to perform live. Edison's invention allowed musicians to perform for people who would never see them in person – providing the artists much greater financial potential for their work.

The catch was the artists could only find new customers if they worked with a label. It was the record labels that had the distribution deals with the retail stores where customers purchased music recordings. Whether the old foil rolls, 78s, LPs, 45s, reel to reel tapes, cassettes, 8-tracks, CDs or mini-discs, artists could only sell to customers if their records were in stores, and you could only get in stores if you signed a contract with a label.

And the labels took a big chunk of any money customers paid for a record.

It was a deal with the devil.

The only alternative was to make your own records and sell them to customers at your concerts. But your reach was much less this way, even if your per-item profit was much higher.

A new model

As we've mentioned before in this space, the 'Net is changing the equation. Because with the World Wide Web, anyone can reach any customer. True, you need money or very savvy marketing to let folks know about your site, but you don't have to sign over the rights to your creative work in order to sell your music.

Now, a site called artistShare is offering a further twist on the music delivery business model.

The artistShare Web site is set up to allow artists to sell their next recording before its made – as a way to raise the cash to make the record. The site is also built around the philosophy of letting the fans have input into the new project, as a way of building closer bonds between musician and fans.

It's not just no-name bands using artistShare, either. Maria Schneider, the well-known and highly regarded jazz arranger/band leader, uses artistShare as a sort of quasi private fan club. You can buy into various 'plans" and get otherwise unavailable CDs, unreleased clips, Schneider's own annotations. At the very top are 'Gold Participants" who, for $1,000, get their names listed on her next CD as an underwriter.

Non-profit theater companies, public radio/television stations, museums and other artistic organizations have been using similar funding methods for years, of course. But this Web site lets individual musicians take advantage of this fund-raising model – and in so doing, potentially bypass the traditional record label cabal.

Still another model

Another online alternative to record labels is Unlike other online music promotions sites, like the old, Myspace doesn't seem interested in becoming a new delivery method as in selling space to bands to reach new listeners/customers.

The main business model for Myspace seems to be as a kind of hip, youth-culture-oriented portal, where you can blog, post a personals ad and post on forums. I suppose before paying to list your band, you'd want to browse around a bit and check out the demographics of the users, and see if the user base is large enough to make it worth your while.

Still, anything that takes some of the power away from the record companies and gives it back to the musicians can't be all bad.