This week's theme is the future of the music industry. A major impetus is David Kusek and Gerd Leonhard's The Future of Music: Manifesto for the Digital Music Revolution.
I've been considering Endstates that are alternative visions to the one proposed by Leonhard and Kusek, Music Like Water, which I call, the Music Utility. The second installment of this series outlined the 10,000 Maniac MTV Channels Endstate, an oversimplification of which is that music videos become far more important than simple audio.
The Music Utility Endstate is mainly about the evolution of the supporting technology infrastructure and business models, principally wireless and audio-enabled devices and subscription based streaming music rather than file downloads. In the Kusek and Leonhard version, Music Like Water, artists have much more power and leverage compared with other actors in the industry, such as the major music labels.
The Music Utility Endstate does not depend, in my view, on this fundamental change in the structure of the music industry. The majors, viewed as dinosaurs by some) could very well morph their service and business models and by doing so, avoid extinction. More on this point tomorrow.
What about artists?
The Return of the Artist Endstate entails a fundamental shift in industry structure and therefore, of the power and economic relationships among the players. In this world, the majors are disintermediated, a perhaps fancy term for what otherwise might be stated as "cut out of the loop."
Kusek and Leonhard make exactly these points in the book, that in their view, artists are empowered and gain a larger share of the pie. The drivers for this change include wide availability of inexpensive and high quality tools for making and editing digital recordings. Another driver is the death rattle of optical media as the primary way in which high quality music is distributed to consumers.
More central to the Return of the Artist Endstate is increasingly direct relationship between artists and their audiences. Regardless of whether the distribution of music is streaming or file based, artists market direct to consumers. Within and across genres there is intense competition for attention. Artists employ marketing and public relations companies to create awareness, to create "buzz".
Online distribution companies compete to distribute the music of those artists seen has having the most buzz or who are high in future buzzability. Artists typically get nearly half of retail revenue; they are expected to pay production and marketing costs out of their share.
The major music companies are focused on music videos and on collections of music from their catalogs published on DVD.