While there are very few hard facts in the article to support his claims, I tend to agree. The current business models for music start-ups do not work.
That being said, music industry executives are not as dumb as we see them. The music industry has a hold on America that is not going to fall soon. The industry is pushing artists to sign 360 degree contracts so that record labels do not rely solely on record sales. This will encourage distribution of free music in order to increase tour sales which record companies are mostly cut out of. This will make the ultimate surrender date a change of model, not a killing of the industry.
The venture industry is out now because they realized that the record companies control the market and aren't too eager to give others control of their product.
I think the music industry is (understandably) clinging to their last straws these days. Piracy and the total loss of their prior, insane profit margins on physical media are draining them fast.
Nonetheless their current "parasite" model can prevail as long as they control the broadcast channels. But technical progress should mostly do away with that, too. It just takes time.
Eventually car-radios will begin to support recommendation-based IP streams (ala last.fm) in addition to the current pre-select. I expect that to become the tipping point from where the consumers will gradually reverse the mainstream (from top-down to bottom-up).
Why would anyone want to start a music startup when the bulk of the most popular music is controlled by a few very unpleasant companies?
Let's you say to started up a company tomorrow that looked ready to put the labels out of business and make a zillion trillion dollars giving everyone exactly the music that they wanted, no less and no more. Ask yourself, would the labels go to Congress to get a law passed that made your company illegal? And the answer you get to that question is "yes". And then the second question is, would Congress give them that law? And the answer to that question is also "yes".
Unless your startup can be fully successful without ever touching a single commercial song, it's doomed before it starts. Only an idiot would throw money or time down that rabbithole.
It's an ill wind that blows no good. The fact that the labels are killing the startups trying to stream their music could be the best thing that ever happened to indie music. TheSixtyOne is happily profitable streaming that.
I don't envy the position that sites like Pandora and imeem are in. Getting a fair shake with the major labels is tough.
However, there is plenty of room to do interesting things without touching music tainted by the Big 4 labels. We are doing it with Mugasha in regards to electronic dance music and TheSixtyOne is doing it with indie music. The niche is your friend, the major labels are probably not.
Also, I think it's time to realize that basing your business model on advertising isn't working. These services are going to need to start getting creative with their business models and start making money on things people want and not things people hate (ads).
I can't see the coments, so I don't understand why I got upvoted. If someone else can see the comments, I expect I made no sense, else they can't see my comment.
The streaming music companies will indeed lose money until they are willing to charge the consumer. Several of these companies provide easily as much value as satellite radio and could charge equivalent fees.
Apart from the labels issue, online music startups are one of the most thriving and diverse online ecosystems. There's a huge range of music startups, far more than movie, tv, newspapers-related enterprises. It's an area that's adapted to the realities of online really quite quickly. If the labels don't adapt to this (and they have started to, in the form of ensuring they take a cut of tour and merchandise sales of artists) then independents will thrive because it's the only place people can get music from.
Music startups are mostly focused on the consumer right now. The real opportunity I think lies in empowering the artists. Give the artists the tools to do things without the labels and the consumers will benefit better. Without the artists on board (most likely without the label), the experience will never be there.
Correct me if i'm wrong, but it seems thesixtyone is a play for the artists ie- upload your tracks here. In turn, by empowering the artists, the consumers have an awesome experience.
18 comments
[ 3.6 ms ] story [ 57.7 ms ] threadThat being said, music industry executives are not as dumb as we see them. The music industry has a hold on America that is not going to fall soon. The industry is pushing artists to sign 360 degree contracts so that record labels do not rely solely on record sales. This will encourage distribution of free music in order to increase tour sales which record companies are mostly cut out of. This will make the ultimate surrender date a change of model, not a killing of the industry.
The venture industry is out now because they realized that the record companies control the market and aren't too eager to give others control of their product.
Nonetheless their current "parasite" model can prevail as long as they control the broadcast channels. But technical progress should mostly do away with that, too. It just takes time.
Eventually car-radios will begin to support recommendation-based IP streams (ala last.fm) in addition to the current pre-select. I expect that to become the tipping point from where the consumers will gradually reverse the mainstream (from top-down to bottom-up).
Let's you say to started up a company tomorrow that looked ready to put the labels out of business and make a zillion trillion dollars giving everyone exactly the music that they wanted, no less and no more. Ask yourself, would the labels go to Congress to get a law passed that made your company illegal? And the answer you get to that question is "yes". And then the second question is, would Congress give them that law? And the answer to that question is also "yes".
Unless your startup can be fully successful without ever touching a single commercial song, it's doomed before it starts. Only an idiot would throw money or time down that rabbithole.
http://thesixtyone.com
However, there is plenty of room to do interesting things without touching music tainted by the Big 4 labels. We are doing it with Mugasha in regards to electronic dance music and TheSixtyOne is doing it with indie music. The niche is your friend, the major labels are probably not.
Also, I think it's time to realize that basing your business model on advertising isn't working. These services are going to need to start getting creative with their business models and start making money on things people want and not things people hate (ads).
http://mixtape.me
The sooner musicians get rid of them the better...
Correct me if i'm wrong, but it seems thesixtyone is a play for the artists ie- upload your tracks here. In turn, by empowering the artists, the consumers have an awesome experience.