Monday, March 3, 2008

Music, Business and Capital

Seth Godin has blogged his "the live music talk," and it's must read stuff for those who follow or have a particular interest in the continuing deterioration of the recorded music business. He talks about the music business as it used to be: radio promotion, limited competition, physical albums (vs. digital distribution), top 40 stardom and star power, magazines that were focused entirely on promoting new artists, songs, albums. And he talks about what has changed. Basically, everything.

Yesterday I tossed out a tweet in Twitterland to ask whether the major record labels had become their own worst enemies. Actually, I don't think there's any doubt about it. Steve Jobs is their nemesis. Or so they suppose. But their problems are not nearly so simple as that.

When the engine of growth for your industry, the enthusiasm of the 13-24 year-olds for the latest music, no longer contributes to your bottom line, you have a serious problem. It's even worse for those in the 18-24 year-old age group. I spoke on Saturday to the owner of an independent record store in Boulder, Colorado. He has operated that store for many, many years. When I suggested that 18-24 year-olds aren't paying for recorded music any more, I expected at least a little push back. Instead, he vigorously affirmed my suggestion. "Tom," he said, "we saw signs of trouble years ago, but it became absolutely obvious that over the past two years what you say is true. Eighteen to twenty four year-olds aren't buying recorded music."

So here are my questions:

(1) does that matter?
(2) if it does matter, can anything be done about it?
(3) and if something can be done, can it be done in time to make any real difference?

My answers to these questions will be developed in subsequent posts to this blog.

Meanwhile, Trent Reznor of NIN fame has taken his cue from Radiohead and raised the bar a bit. In addition to offering some of the latest mp3 content for free, he has assembled multiple packages at various price points - offering content at $5, $10 and even $300. How is it going?

Trent seems pretty pleased so far!

Music, Business and Capital